EU to start trade talks with US despite scandal

Published: 03rd July 2013 10:09 AM  |   Last Updated: 03rd July 2013 10:09 AM   |  A+A-

The European Union confirmed Tuesday that free-trade negotiations with the United States should kick off as planned next week, despite widespread concerns over the alleged eavesdropping of EU diplomats.

The Commission, the EU's executive branch that leads the negotiations on behalf of its 28 members, said the planned start of talks in Washington next Monday "should not be affected" by the surveillance scandal that has emerged in recent days.

However, it insisted that the trans-Atlantic atmosphere needed to clear up for the talks to be successful.

"For such a comprehensive and ambitious negotiation to succeed, there needs to be confidence, transparency and clarity among the negotiating partners," it said in a statement.

The talks are likely to take at least a few years.

The first week of technical negotiations start in Washington on Monday but political outrage over the U.S. eavesdropping allegations had raised questions over whether they would go ahead.

On Sunday, an apparent leak from former U.S. intelligence systems analyst Edward in Germany's Der Spiegel magazine allegedly showed that the National Security Agency bugged the EU's diplomatic offices in Washington and infiltrated its computer network.

The magazine said the NSA took similar measures to listen in on the EU's mission to the United Nations in New York, and also used its secure facilities at NATO headquarters in Brussels to dial into telephone maintenance systems that would have allowed it to intercept senior EU officials' calls and Internet traffic.

French President Francois Hollande on Monday suggested that the scandal could derail the free-trade negotiations. He insisted that the U.S. clarify the situation and end any possible eavesdropping immediately. There could be no negotiations unless Washington provided such guarantees, he insisted.

France had been reluctant to start the talks as it insisted on keeping the movie and television business out of the negotiations to shield Europe's audiovisual industry from Hollywood.

Yet EU Trade Commissioner Karel De Gucht said hinging the start of talks on such political issues as the eavesdropping scandal would amount to the EU shooting itself in the foot. The EU, he said, was entering talks out of self-interest, not to be subservient to the United States.

Any far-reaching EU-US trade deal could provide a big boost to growth and jobs by eliminating tariffs and other barriers that have long plagued economic relations — a free trade pact would create a market with common standards and regulations across countries that together account for nearly half the global economy.

A recent EU-commissioned study showed that a trade pact could boost the EU's output by 119 billion euro ($159 billion) a year and the U.S. economy's by 95 billion euros ($127 billion).

Another estimate showed eliminating tariffs alone would add $180 billion to U.S. and EU gross domestic product in five years' time while boosting exports on both sides by about 17 percent. That could add about 0.5 percent annually to the EU's GDP and 1 percent to the U.S.

For Europe in particular, that extra growth could be crucial to help pay high public debt and bring down unemployment, which is at record highs.

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