US UK free trade policy key priority for Cameron
David Cameron is prioritising a free trade agreement between Europe and the US as the UK takes over the presidency of the G8 group of richest nations this year.
In a letter to other G8 leaders the UK prime minister said expanding free trade was one of three areas he wanted them to focus on.
Cameron has already made good progress in discussions ahead of trade agreements with Canada, Japan and Russia, but his heart is set on a treaty, if only in principle, with the US. The hope is that such a deal could reduce excise on goods traded between EU countries and the US, or at least work on non-tariff barriers, such as leveling standards for certain goods.
The UK prime minister is also pushing for a crackdown on tax evasion and more transparency from emerging economies which receive aid.
Low-cost issues
Cameron, who will host the main G8 summit in Northern Ireland in June, is choosing to focus on issues which do not require costly commitments from member states at a time when governments are keen to reduce spending.
Cameron wrote: “This G8 will not be the kind of summit where we simply whip out a chequebook at the eleventh hour, pledge some money and call it a success. What we are talking about are long-term changes in our countries and the rules that govern the relationships between them. With ambition on this scale, I am convinced that success depends on us starting a debate on these changes now.”
A trade agreement between the EU and US has been bandied about for some time, but Capitol Hill has not jumped at it. It is problematic that the deal is not purely a G8 issue, and that Cameron’s influence in the EU is not guaranteed because the UK cannot decide whether it wants to remain a member of the organisation.
Whitehall is however optimistic and points to existing EU support, including a speech by the trade commissioner, Karel De Gucht, in November, which says the aim is to end 2013 discussing how, not if, such a deal can be made. Benefits to EU members of an “ambitious” deal are estimated at around €65bn (£53bn).
“With Europe and America together accounting for a third of global trade, perhaps the single biggest prize of all would be the beginning of negotiations on an EU-US trade agreement,” writes Cameron.
“These are vital opportunities for global growth, and I hope that we in the G8 can offer leadership – in particular by working with businesses in every sector of our economies to mobilise support for these deals and by using the openness of our direct engagement as leaders to address the sticking points frankly and to fix them.”
Warnings
There are also likely to be warnings from development groups that more G8 deals which exclude developing nations from expanding trade or tie them to unaffordable commitments could harm those nations’ growth.
Nick Dearden, a spokesman for the Jubilee Debt Campaign, said Cameron’s focus on trade deals could harm developing nations. He sees this happening in three ways: by excluding them from the benefits of such deals, by tying them to unaffordable commitments, and by strengthening the international power of the financial sector.
“Given the financial crisis we have seen, given the role of the City of London in creating that crisis, and the ongoing trade system, what Cameron should be doing is trying to rein in the financial and new-liberal free trade agenda, not go full steam ahead with extending it,” said Dearden.
The US has seen considerable opposition to the North American Free Trade Agreement between the US, Canada and Mexico, which has been in force for nearly 20 years. Republicans and trade unionists are particularly critical, blaming it for the loss of jobs.
However, there is less hostility towards an agreement with Europe.
Working together
Cameron wrote to fellow leaders about tax: “No one country can, on its own, effectively tackle tax evasion and aggressive avoidance. But as a group of eight major economies together we have an opportunity to galvanise collective international action.
“We can lead the way in sharing the information to tackle abuses of the system, including in developing countries, so that governments can collect the taxes due to them. We can work together to sign more countries up to the international standards. And we can examine the case for strengthening those standards themselves – whether by improving existing standards or looking at new ones.”
The UK presidency last for one year and rotates with the other seven core G8 members Canada, France, Germany, Italy, Japan, Russia and the US. As well as the headline meeting in June, there will also be a number of preparatory summits
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