A MAJOR trade deal, which could boost the UK economy by £100bn over the next decade, has been put in jeopardy by the shutdown of the US federal government.
Discussions with the aim of constructing an enormous free trade agreement between the EU and US, were stalled over the weekend as funding for American negotiators dried up.
The second round of negotiations over the Transatlantic Trade and Investment Partnership (TTIP) had been due to begin in Brussels today, but US representative Michael Froman has conceded to his EU counterpart that the staffing constraints of the shutdown made American participation impossible.
According to research by the Centre for Economic Policy Research, the agreement had the potential to increase the UK’s national income by £100bn over 10 years, and could increase exports from the EU to the US by as much as 28 per cent. Although the level of tariffs on trade to the US is relatively low, non-tariff barriers make up about 8.5 per cent of the value of exports.
A report from the Atlantic Council and the British embassy in Washington last month also suggested large benefits for US and EU households, predicting that an American family of four stands to gain $865 (£539.7) per year, in comparison to $720 annually for EU families.
The talks have already encountered some issues: earlier in the year, the French government raised objections to a lack of protections for the audiovisual industry, and refused to support the negotiations.
Despite similar roadblocks, Ignacio Garcia-Bercero, the Europe’s chief negotiator on the first round of discussions in July referred to “a very productive week”.
President Barack Obama’s plans to attend the Asia-Pacific Economic Co-operation (Apec) summit in Indonesia have also been scuppered by the ongoing dispute over the US federal budget.