From: The Telegraph
The European Union is to push for an agreement on banking and financial services as a key part of this week’s historic trade talks with the US which could see the introduction of an American-European super-regulator.
By James Quinn, and Katherine Rushton
Sources indicated that the agreement is seen as the major priority for the UK, given the role of the City in the international economy.
It is understood that EU negotiators will push for a core agreement on financial regulation and principles, but also discuss how regulation should be enforced in the future. It is possible that, as a result of the talks, some form of transnational super-regulator could be established, which would take a lead on financial regulation across the two economic super powers.
Some factions within the US trade negotiating team are understood to be resisting the calls, fearing it is a push by the UK to protect the Square Mile.
However, it is known that a number of EU member states have indicated their support for the measure.
The financial crisis highlighted the need for strengthened financial regulation, and has seen the two economic blocs move in different directions. The US drafted in its Dodd-Frank reforms of Wall Street, which included placing trading restrictions on financial institutions.
Meanwhile, the EU continues to wrestle with its post-crisis rules, with a bonus cap for bankers being fought by many parts of the industry.
Quite how any form of transnational regulation would affect domestic regulators is unclear. Other areas of focus for the UK include the removal of certain barriers to allow more trade into the US. Officials suggest British firms could save around £1bn a year if the talks are successful.
Officially called the Transatlantic Trade and Investment Partnership (TTIP), the talks will get under way in Washington DC tomorrow. This set of talks will last for a week, with an agreement expected by the end of 2014.
The talks will be led by Ignacio Garcia-Bercero, the EU’s chief negotiator, and Dan Mullaney, his US counterpart.
“The purpose of this week is to lay the groundwork for these issues. We will develop an approach for each area,” said Hiddo Houben, head of the EU’s trade office in the US.
“I cannot overemphasise its importance,” Danny Lopez, the British consul general in New York, told The Sunday Telegraph.