MADRID – With the moribund Doha Round of multilateral free-trade talks awaiting its last rites, a new wave of regional trade negotiations has de facto taken up the mantle of establishing a global trade regime. President Barack Obama’s administration has placed the United States at the center of this shift, embracing two major simultaneous negotiations: the Transatlantic Trade and Investment Partnership (TTIP) with the European Union; and the Trans-Pacific Partnership (TPP) with 11 countries in the Americas and Asia.
As the only party to both initiatives, the US is well placed either to move them forward in harmony or to leverage the progress of one negotiation against the other. Beyond affecting America’s immediate negotiating partners, the latter approach would gravely damage progress in establishing a rule-based global system.
The new strategy of regional negotiations can succeed and provide a foundation upon which an international trading regime can be built only if the TTIP and the TPP are balanced and approachable to the wider international community. Otherwise, there is the danger of creating expensive global imbalances and even fragmentation.
Europe has an important role to play in this regard. Broadening the discussion beyond a focus on the big two agreements – and beyond some of their substantive issues – will create a sense of urgency and purpose, pushing the US to engage actively or risk losing its central role in the global trade agenda. The EU is well placed to foster a conducive atmosphere by parlaying its existing trade partnerships, beginning with TPP members Mexico and Chile, with which it has longstanding free-trade agreements, and Singapore, with which it recently completed free-trade negotiations.