Could Edward Snowden ruin America’s biggest trade deal with Europe?

Billions are at stake as the EU is wary about entering a free trade deal with the US after claims that the NSA spied on European allies. Photo: Secretary John Kerry and European Commission President José Manuel Barroso (AP/EC Audiovisual Services)

NEW YORK, July 6, 2013 – Edward Snowden’s claim that the National Security Agency spied on European allies is likely to impact the U.S.-EU free trade talks that has the potential to create millions of jobs and add over $280 billion a year across both economies. The former NSA contactor and CIA employee says that the United States conducted covert surveillance on 38 foreign embassies and missions in Washington and New York. France wants to delay talks, Germany is doubtful about doing business with America and EU officials warns that the Snowden’s allegation are likely to have consequences.

On July 8, Washington and 28 countries of the European Union are scheduled to negotiate the trade liberalization deal of the century, the Transatlantic Trade and Investment Partnership (TTIP).   

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Free trade is a means to reduce the regulatory and bureaucratic burdens of conducting transatlantic business, and this would save billions in cost and encourage more business activity. The deal is expected to eliminate $10.5 billion in tariffs and boost output totaling $127 billion from the United States and $159 billion from the EU, according to an EU-commissioned study. The findings also state that the two continents already invested more than $3.5 trillion in each other’s markets. 

Combined, U.S. and EU commercial activities account for 30 percent of the global economy. The size of this potential trade block would offer a competitive advantage over China and other newly industrialized nations. These new economies are seriously challenging America and Europe, costing them their market leadership in technology-intensive manufacturing and related business services. 

Snowden has made an ambitious, but highly beneficial, trade agreement more complicated.

This week Snowden released classified documents to the German magazine Der Spiegel detailing allegations of the U.S. spying on EU institutions and member states such as France, Italy and Greece.

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America’s most trusted ally, Britain, along with Australia, Canada and New Zealand are exempted from the NSA surveillance program.

France called for a two-week delay in the negotiations given Snowden’s claims. Germany said that “Cold War” tactics will not support trade discussions.

Secretary of State John Kerry defended the NSA saying that its activities are ‘not unusual’ for governments, but his diplomatic explanation only offended EU members. 

On Thursday, the EU Parliament voted to launch an in-depth investigation into the activities of the NSA, including the suspected bugging of EU offices and internal computer networks.

“If the allegations prove to be true, it would be an extremely serious matter which will have a severe impact on EU-US relations” said European Parliament President Martin Schulz.

Although the talks will move forward as planned, they will be held in conjunction with privacy and data protection discussions next week. European Commission President Jose Barroso has made it clear that the U.S. intelligence program and a possible trade partnership are interlinked. 

America, regardless of Snowden, is not in the weakest position. The euro zone is in its longest recession ever. Reports indicate that the single currency area shrank for the seventh consecutive quarter. This year, the euro zone is forecasted to decline by .03 percent compared to the U.S. economy that will grow by 1.9 percent, according to the International Monetary Fund. If TTIP is implemented, the EU claims that European households would gain about an extra $700 a year and GDP would increase by 0.5 percent.

Europe will have to choose between its security interests or economic interests, assuming that the actions of the US is a security threat. Since the EU block is America’s top security ally this assumption has to be revised, replacing “security interests” with political image.  Although the outrage of France and other countries is accepted as sincere, under the circumstances, Europe cannot publically appear passive on confronting allegations of espionage.

Snowden has definitely made U.S.-EU trade talks difficult, but the highly beneficial result of the trade agreement suggest that the two sides will pursue an agreement.


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Tiffany Shorter

Tiffany provides foreign and economic analysis for Communities Digital News at The Washington Times. Her column called "EMEA Watch" focuses on events in Europe, the Middle East and Africa.

Tiffany is known for her political commentaries on U.S. issues which have been featured on BBC, CNN, BET, The Sean Hannity Show, CCTV AMERICA, Go Africa TV and Avui (Spain). She was also a regular guest on FOX News Live, a real-time online news program.

Tiffany recently completed her graduate studies at Columbia University's School of International and Public Affairs.



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