EU Economics

EU Details Labor, Environmental Proposals for Transatlantic Trade Talks

Two sides are pushing for a deal before President Obama leaves office in early 2017

European Commissioner for Trade Cecilia Malmstrom giving a press briefing at the European Commission in Brussels on Oct. 14.

European Commissioner for Trade Cecilia Malmstrom giving a press briefing at the European Commission in Brussels on Oct. 14. PHOTO:EUROPEAN PRESSPHOTO AGENCY

BRUSSELS—The European Union published details of tough labor and environmental standards it wants included in a putative trans-Atlantic free-trade pact, amid fears from labor leaders and politicians on both sides of the Atlantic that the deal could bolster multinational corporations at the expense of consumers and workers.

The EU’s proposal, presented to U.S. negotiators at the latest round of trade talks in Miami last month, “offers the most ambitious provisions ever put forward on these issues to any trading partner,” according to a statement from the European Commission, the bloc’s executive arm. It includes “an obligation not to relax domestic labor or environmental protection laws as a means to attract trade or investment,” the commission said.

The world’s two biggest economic blocs have been discussing a so-called Transatlantic Trade and Investment Partnership since 2013. The deal would lower tariffs close to zero and sweep away or streamline a host of regulations that hinder trade in goods ranging from cars to chemicals.

In last month’s talks, EU and U.S. negotiators said they exchanged tariff offers covering 97% of goods and discussed public procurement and regulatory barriers to trade. The two sides are pushing for a deal before President Barack Obama leaves office in early 2017, but officials have indicated that timeline is challenging.

Thousands of protesters have marched in Berlin and other European cities in recent weeks to express their objections to a deal they fear could undermine wages, public health and environmental standards.

In the U.S., critics of a sweeping Pacific trade agreement with 11 other nations, known as the Trans-Pacific Partnership, registered similar concerns after the pact’s details were released Thursday. Many unions worry opening up trade with Southeast Asia will shift some manufacturing jobs, and labor leaders say the TPP doesn’t do enough to improve working conditions in Mexico.

At a news conference on Friday, the EU’s trade commissioner, Cecilia Malmstrom, said trade “is not just about our economic interests, but also about values.”

“Child labor, insufficient workers’ rights or irresponsible corporate behavior are global scourges that I want trade policy to help us deal with,” Ms. Malmstrom said.

The EU’s proposals include measures to prevent harm caused by the trade of chemicals, protect health and safety at work and promote responsible behavior by businesses.

If successful, the trade talks would likely result in both sides accepting one another’s regulations in areas such as auto safety, saving millions for car companies that would no longer have to build different versions to meet two sets of safety rules. U.S. and EU regulators also hope to end duplicative inspections of each other’s pharmaceutical plants.

However, a host of potential stumbling blocks still stand in the way of a deal, including the EU’s insistence that local producers be granted exclusivity over the names of regional products, from Champagne to feta cheese.

These so-called geographical indications are “a key EU priority in TTIP,” according to an EU report on the status of the negotiations published on Friday. The EU has “renewed its call to the U.S. to move to negotiating mode on this topic,” in an effort “to stop other producers misusing [geographical indications] and [enforce] those rules effectively,” according to the report

The EU also “expressed strong concerns” to its U.S. counterparts last month about recent special duties on butter, and cautioned on U.S. inspection requirements for table olives and tax breaks for small wine and beer producers, the report said.

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