US Government Shutdown Hits Free Trade Pact Talks With EU

on October 05 2013 11:02 PM
U.S. President Barack Obama
U.S. President Barack Obama delivers remarks on the government-funding impasse in Maryland. Reuters

Negotiations for a major free-trade agreement between the European Union and the U.S. have been postponed after Washington expressed its inability to continue them because of the partial government shutdown. Officials from EU member-states and the U.S. were scheduled to meet in Brussels next week to discuss the Transatlantic Trade and Investment Partnership, or TTIP, which upon its successful conclusion would be the world’s largest free-trade pact.

However, U.S. Trade Representative Michael Froman informed EU officials Friday that the federal government shutdown has made it impossible to send a negotiating team to Brussels as scheduled, BBC News reported. Froman said deal talks can continue after the shutdown ends, albeit with an alternate schedule.

The partial government shutdown that began Tuesday has led to a severe staff crunch, as more than 800,000 government employees are temporarily out of work and out of pay. The government was forced to call a halt to all so-called nonessential operations after Congress failed to OK federal spending on either short-term or long-term bases.

Reacting to the U.S. announcement about the negotiations, European Trade Commissioner Karel De Gucht said in a statement that the delay was unfortunate, but the talks would continue once the deadlock ended. “But let me underline that it in no way distracts us from our overall aim of achieving an ambitious trade and investment deal,” he said.

The U.S. and the EU trade representatives were set to meet for the second time to negotiate the provisions of an agreement that is expected to boost bilateral trade and possibly improve employment opportunities in both the U.S. and Europe.

The first round of negotiations on the deal was announced by U.S. President Barack Obama at the Group of 8 Summit in June. The pact could eliminate all trade tariffs, while bolstering investments and market access between the U.S. and EU member-states, which would be covered by the proposed treaty.

Obama was also forced to cancel his trip to Southeast Asian countries this week due to the government shutdown. He was set to visit Brunei, Indonesia, Malaysia and the Philippines during a weeklong tour to boost economic and defense ties, and to participate in two economic summits in the region.

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