Introduction

Considering the complex relationship between the United States and the European Union (EU) in terms of trade, why a formal US-EU Free Trade Agreement remains elusive despite the mutual interest, is a critical question. This article explores the main reasons behind the lack of such an agreement, with a particular focus on the discrepancies in food safety standards, the role of economic principles, and the broader implications of the current trade dynamics.

1. Discrepancies in Food Safety Standards

One of the primary reasons preventing the establishment of a US-EU Free Trade Agreement is the divergence in food safety standards. The United States (US) and the EU have fundamentally different approaches to ensuring the safety and quality of food products, with significant implications for trade.

1.1 FDA vs. EU Precautionary Principle

The US Food and Drug Administration (FDA) follows a risk management approach, often described as a 'bolt-on' method after addressing issues. In contrast, the EU's system, which is based on the precautionary principle, places a higher emphasis on preventive measures and rigorous testing. This difference in regulatory approaches is a major barrier to a comprehensive trade agreement, as it argues for higher safety standards in the EU, which the US often finds too stringent.

1.2 Import Restrictions and Failed Expectations

There is a significant divide in public perception between the US and the EU regarding the safety of chlorinated chicken, hormone-treated meat, and genetically modified crops (GM crops). While the EU regards these practices as pose risks to public health and environmental safety, the US views these as necessary for efficiency and competitiveness. This mismatch in expectations has fueled concerns and mistrust, further complicating trade negotiations.

2. Structural Imbalance and Harmonization Issues

The formation of too many free trade agreements (FTAs) has led to increasing structural imbalances between small and large countries, as well as between nations with different regulatory frameworks. This situation is often perceived as creating a global mess, particularly when green laws are applied selectively by some countries, leading to unfair advantages and disadvantages for international trade.

3. Misunderstandings and Misplaced Priorities

The question of whether a US-EU FTA is needed has also been muddled by political rhetoric and misunderstandings. For example, during the Trump administration, there was an emphasis on cancelling existing trade agreements but the actual impact of such actions would have been minimal given the ongoing nature of trade without formal agreements. The example of German car manufacturers, such as BMW and Mercedes, illustrates how existing trade dynamics already facilitate significant cross-border business, rendering formal agreements less critical.

Conclusion

While the desire for a comprehensive US-EU Free Trade Agreement is evident, the existing differences in food safety standards, regulatory approaches, and the structural imbalances created by existing FTAs pose significant challenges to its realization. The key to future progress lies in promoting greater harmonization in regulatory frameworks and fostering a shared understanding of the importance of safeguarding public health, environmental sustainability, and economic efficiency. Only then can the US and the EU move forward to establish a truly mutually beneficial trade relationship.