ANN ARBOR – The United States and the European Union have embarked on a new round of trade talks, which holds out the promise of deepening the two sides’ already robust economic relationship. But the talks should not be used to weaken US financial reforms that are just taking root.
The EU’s Commissioner for Internal Market and Services, Michel Barnier, has been barnstorming the US, looking for support to include financial services as part of the talks on the proposed Transatlantic Trade and Investment Partnership. Meanwhile, the financial industry is pushing the talks as a way to overturn the pesky – and highly effective – rules being implemented in the US under the Dodd-Frank Act.
Tough new rules on derivatives, capital requirements, financial structure, consumer and investor protections, and the like could be jeopardized in the trade talks, with the US Congress able to hold only an up-or-down vote on a final agreement, which would encompass a broad range of topics. And other commentators view the talks as another forum for cooperation, hoping that trade negotiations will improve coordination among financial regulators.
The US would be wise to reject that view.