EU pushing for US trade deal

Euro zone10 September 2014, News Wires – The US should commit to exporting oil and natural gas to Europe under a transatlantic trade deal in light of the European Union’s geopolitical situation, the EU trade commissioner said on Tuesday.

Tension between Russia and the West over the future of Ukraine is spurring the European Union to renew efforts to end decades of dependence on Russian gas. One solution would be greater access to abundant US resources, Reuters reported.

Overturning a 40-year US ban on oil exports by agreeing to send oil to Europe could pressure Russian President Vladimir Putin by lowering global crude prices.

“It is important that we come forward with a position on that (energy agreement) as soon as possible, because maybe you may have noticed that some things are going on in Europe,” EU trade chief Karel De Gucht told reporters at a briefing in Washington.

“I cannot imagine that there will ever be a TTIP without such (energy) provisions,” he added, referring to the Transatlantic Trade and Investment Partnership.

De Gucht was in town for meetings with US Trade Representative Michael Froman, ahead of negotiations later this month on the trade pact, which aims to integrate two markets accounting for half the world’s economy.

The rewards of a US-EU energy agreement could be big for the European Union, where natural gas prices are around three times those in the US.

The Europeans want a detailed chapter in the trade pact that lays out US commitments to energy exports, hoping to make supply more secure.

But the politically sensitive subject is likely to complicate trade talks already spanning everything from agriculture to finance.

The US worries more exports could push up the price of fuel at home, potentially costing politicians votes and damaging competitiveness for industries with heavy energy use.

The US ban on exporting crude without a license dates from the 1970s when US lawmakers sought to conserve reserves following an Arab oil embargo.

Washington is now facing growing international pressure to ease the ban, as resource-hungry allies seek a reliable energy trading partner.

De Gucht said even though the trade pact will likely not take effect for more than a year, Washington and Brussels could both benefit from a clear political agreement on energy sooner rather than later, implying that it would send a strong signal to Moscow about the European Union’s reduced energy dependence.

“I mean, an agreement on TTIP, in the best of all worlds, would be (at) the end of next year,” De Gucht said. “I think everybody would agree that energy is a little bit more urgent for the time being, and also, very much geostrategic.”


– Upstream

About the Author