U.S.-EU trade deal faces cultural hurdles

Horses stand in the field of a farm in Altrincham, U.K.

The United States and Europe have agreed to talk about a transatlantic free trade deal. It will be the biggest pact of its kind ever negotiated, attempting to liberalize more than $600 billion worth of imports and exports a year. Talks will begin before June, but it could take at least two years before any deal is done. Success is not guaranteed. There are certain cultural hurdles to overcome.

“This is going to be like two elephants trying to mate,” said one European analyst today. “More of a collision than a delicate intertwining.”

Simon Tilford, chief economist with the Centre for European Reform, identifies agriculture as the problem area. He claims the two sides will struggle to open their markets fully to each other’s farm produce.

“When they get down to the nitty-gritty, it’s possible that the negotiations will founder on some of the cultural differences between the EU and the U.S. over things such as genetically modified food,” says Tilford.

GM-food is banned in most of Europe. And there’s stiff resistance to American poultry that's been washed in chlorine and to hormone-treated beef.

On the other hand, U.S. farmers may not be entirely sympathetic to the social aims behind Europe’s vast system of farm subsidies.

“The Common Agricultural Policy was designed by the French, for the French and primarily for the French peasant farmer to keep an idyll of a way of life going -- and it’s suitably subsidized,” argues Justin Urquart Stewart of Seven Investment.

Urquart Stewart describes the long-running culture clash between U.S. and European farming as “bourbon meets Burgundy: they’ll never mix!"

Some find it heartening that an attempt is underway to sink some of these cultural differences. But Gillian Tett of the Financial Times is not reassured.

“It indicates just how desperate the American and European governments are to find something, anything that can reignite growth at a time when many of the other policy options are, frankly, running out of steam,” says Tett.

But even she admits that this is the world’s biggest trading relationship, and therefore worth nurturing.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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