American negotiators can’t pay for their trip to Brussels, EU-US trade agreement freezes

Quite unexpectedly, EU Trade Commissioner Karel De Gucht announced yesterday night the cancellation of 2nd Round of Transatlantic Trade and Investment Partnership (TTIP) negotiations in Brussels, due to the US administration shutdown. His counterpart, United States Trade Representative Ambassador Michael Froman informed him that “due to the ongoing furlough, the US Administration will not be able to send to Brussels next week officials from USTR and US Government agencies to maintain the planned second round of negotiations in the Transatlantic Trade and Investment Partnership (TTIP). All negotiation sessions planned for next week (7-11 October 2013) in Brussels are therefore cancelled”. Only some days ago on 30 September, De Gucht and Froman had met to fix the last arrangements for this second round of the TTIP negotiations. After the meeting, the EU Commissioner expressed his contentment that the negotiations are progressing on schedule. He noted, “Our main ambition – beyond simply reducing tariffs across the board – is to make the EU and the US regulatory systems more compatible and to help shape global rules in trade since this is where the economic and political benefits of a deal lie”. Obviously nobody believed then that after three days the Americans will not be able to pay for their trip to Brussels. Can’t pay for their tickets Day after day since the US government was forced on 1 October to start partially shutting down its services due to lack of credits, this issue gains unbelievable dimensions. It is quite astonishing that high-ranking officials of the US Trade Administration and other crucial government services are unable to pay for their trip to Brussels. Even the American President Barack Obama, was obliged to cancel his trip to East Asia. As a consequence he would not participate in the Asia-Pacific Economic Cooperation forum and he will also miss the East Asia summit. This is not the first time though that the Republicans of Washington’s Capitol Hill, bring the US government to its knees. Exactly the same political deadlock occurred 17 years ago, when the GOP forced Bill Clinton’s administration to partially shut the US down. The question is that both the EU and the US were counting a lot on the swift achievement of this tremendous trade agreement. Negotiations on the TTIP were scheduled to be completed before the end of the year, and the agreement to start immediately delivering fruits. Both sides of the Atlantic are actually expecting a strong growth impetus from the application of the TTIP. As things turn out, this unexpected cancellation of negotiations comes as a gift to those who urged the EU to withdraw altogether from it, in response to NSA’s spying on European citizens and institutions. More victims Of course the timely conclusion of the TTIP is not the only victim of this extreme political line followed by the House Republicans. Their fury against President Obama’s health care reform has taken extraordinary dimensions. Behind all that it’s actually only a small group of representatives who pushed the GOP to this direction. These people are behaving like a party within the party. In their constituencies they are the darlings of the Tea Parties, representing the super conservative voters. Their main political characteristic is that they don’t seem willing to negotiate and the question is how far the rest of the party will follow them, in this slippery ground. In any case the cancellation of the second round of negotiations for the TTIP between the EU and the US, is just collateral damage of the Republican’s decision to put the Obama administration in a most difficult position. As De Gucht stressed tough, “The cancellation of next week’s negotiation round in Brussels is clearly unfortunate but let me underline that in no way it distracts us from our overall aim of achieving an ambitious trade and investment deal between Europe and the US”. Last time, 17 years ago when the GOP followed the same strategy against Bill Clinton, the government shutdown lasted for 21 days. This time it’s difficult to predict how far it will go. However a benchmark date is 17 October, when the US government would need a raise its legal borrowing limit, in order to continue being able to pay its bills. If the Republican majority of the House of Representatives continues in its present hard-line and rejects the law to increase the borrowing ceiling, then even an US government default may be plausible.