Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

In trade negotiations the European Commission represents the member states but it works on a mandate provided by the member states. In June the Council of Ministers gave the Commission a mandate to start the negotiations on an EU-US trade agreement. The US is Europe's biggest trading partner. The EU-US corridor represents two thirds of all global trade. It is a significant area of opportunity. The idea behind it is to take the standard step of reducing tariffs and quotas, which is the bread and butter of trade agreements, but also to examine regulatory and non-tariff barriers and seek to reduce unnecessary barriers to trade, not by reducing the regulatory protection but by reducing the administrative burden that accompanies them. This is not about the EU telling the US what food protection measures it should have in place or vice versa but rather it is about making sure that artificial barriers to trade are not being created.

The third element of it is to evolve standards over time. If the EU and US are evolving product standards over time, that sets a standard, helps global competition in terms of the EU and US and encourages the opening of trade generally, as people move to a common standard.

It is a very significant potential agreement. Tariffs are generally low. At European level they are about 3% and in the US they are about half that level. The meat of these negotiations will not be in the tariffs but in reducing the administrative burdens or hurdles that prevent trade. The easiest example to highlight this point can be found in the pharmaceutical sector where there is an FDA test - an American test - for a product to be approved for use.

There is also a European test for the product. A company that wants to enter both markets has to separately comply, produce clinical trials and go through the whole rigmarole in each country. There is not mutual recognition of work that has been done, even if it is being done to a standard everyone agrees is an acceptable standard. To take out such a measure that simply adds a cost will improve the situation. We are not trying to say what the standard should be but that common rules and procedures would be used and people would apply them.

Various estimates have been made on how beneficial the process could be. The Commission believes the potential impact could be 0.5% of GDP per annum. On a pro ratabasis, in an Irish context there would be an approximate €800 million increase in GDP annually and 400,000 new jobs. This country could argue the case that the benefit would be more than pro ratabecause our trade with the US is about 6% of the EU trade which is significantly above where we are in terms of population but the figures are based on models that have been developed.

In terms of the benefits, a number of sectors could be involved such as those that process foods, chemicals, general manufacturing, financial services and insurance. They seem to be the areas where there are big obstacles. Public procurement is another area. There are areas where one could expect to see significant opportunities open up from the agreement. To date, there have been two meetings on the agreement. They have been scoping meetings. The first one covered cross-cutting and institutional provisions on regulatory issues, technical barriers to trade, sanitary and the phyto-sanitary area, which relates to food health, public procurement, raw materials, energy trade and sustainable development. The second meeting focused on maritime, air transport, energy, rules of origin, market access for goods, sectoral regulation, regulatory co-operation in financial services and cross-cutting regulatory and institutional provisions. We are not yet into the hard negotiation. It is more a case of positioning. A third round of meetings will be held on 16 December. We are still at the preliminary stage prior to a package emerging. The Commission announced it intends to set up an advisory group that would comprise representation of all stakeholder interests including agriculture, business, services, consumers, trade unions and NGOs. That will be a sounding board for the Commission as negotiations proceed.