Monday 26 September 2016

Counting the cost of squabbles between America and Europe

Rows over visas and data protection highlight a new strain in EU-US ties, writes Sarah Collins in Brussels

Published 16/04/2016 | 02:30

European Union Competition Commissioner Margrethe Vestager
European Union Competition Commissioner Margrethe Vestager
U.S. President Barack Obama with Treasury secretary Jack Lew
Apple CEO Tim Cook

Trans-Atlantic relations inched dangerously close to the precipice this week after Brussels threatened to reimpose visas for American holidaymakers and business travellers.

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It's unlikely the EU will ever make good on its threat, given the tourism, trade and diplomatic costs, but the incident is just one of several ostensibly isolated issues that are testing diplomatic ties.

The US this week refused to waive visas for citizens of Bulgaria, Romania, Croatia, Cyprus and Poland - despite enjoying visa- free access to those countries. (Canada did the same for Bulgaria and Romania.)

The EU is within its rights to retaliate, but stopped short of doing so on Tuesday over fears it would prompt a tit-for-tat move across the pond, which could cost EU holidaymakers up to €3bn more in visa fees and cost the EU tourist industry at least €1.8bn. Ireland is not affected as it's not part of the EU's visa system.

EU migration chief Dimitris Avramopoulos said the issue would remain "high on the agenda of our bilateral relations" and that he was seeking "a balanced and fair outcome" by 12 July, after consulting EU governments and MEPs.

The visa skirmish is just one of the many flashpoints in EU-US relations that, taken together, could add up to something more serious.

Ireland's deep ties to US business, especially on tax, means this country risk being caught in the cross-fire. A probe by Margrethe Vestager, the Danish competition commissioner, into the taxes paid here by Apple has now been running for two years, with the Irish and US governments pitched on the same side as Apple chief executive Tim Cook in the row with Brussels.

"If the visa issue were to come to a head that would not be good for EU-US relations right now," said Sudha David-Wilp, a senior fellow with the Berlin-based German Marshall Fund. "There are so many things at stake."

One of those is a deal on transatlantic data transfers, known as Privacy Shield.

EU privacy watchdogs refused to sign off on the deal this week, warning that it fails to protect EU citizens from "massive and indiscriminate surveillance" by US national security services.

It leaves EU and US data transfers in legal limbo, with massive implications for tech giants such as Google, Facebook, Amazon and others.

The European Parliament has had a long-running beef with the US over data protection, and has repeatedly refused to sign off on bank transfer agreements (Swift) and airline passenger name records (PNR).

Under pressure to help intelligence services after the Brussels terror attacks, MEPs adopted a new PNR agreement this week, but only alongside strict data protection rules they say will give citizens control over their personal information.

"Transatlantic relations are so multifaceted," said Ms David-Wilp. "In the post-Cold War period there was a tendency to focus on security relations, but we should not forget that commercial relations between the EU and US are also vital."

Trade has been a barometer of EU-US relations as both sides seek to ink a transatlantic trade and investment partnership (TTIP), a vast, 24-chapter deal to reduce tariffs and harmonise standards in sectors as diverse as food, cars and medical devices.

Since the deal was launched three years ago, talks have repeatedly broken down, most recently over the arcane issue of investor protection in disputes with foreign states.

US President Barack Obama is travelling to Germany at the end of April, where he will open the Hannover trade fair, while the 13th round of TTIP talks kicks off in Washington the same week.

But negotiators will have to work hard to ensure the deal does not fall victim to US campaign trail politics, with Republic front-runner Donald Trump and Democratic candidate Bernie Sanders both criticising free trade as anti-American.

German MEP David McCallister, who heads the European Parliament's US delegation, says EU-US relations will be "further tested" by the UK's EU referendum.

President Obama's second and last stop on his European tour is the UK, betraying the significance of the vote for transatlantic relations.

But Heather Conley, director of the Washington-based Centre for Strategic and International Studies, says the US weighing into the debate could do more harm than good.

"It is an enormous risk," she said this week. "I mean, if you can imagine if David Cameron would come to the United States and tell us there's no way we should vote the way we're voting because it's illogical and irrational … We would tell them to get lost, right?"

It wouldn't be the first time President Obama has insulted his European allies.

In a recent interview in 'The Atlantic' magazine, he referred to France and the UK as "free riders" on US defence spending during the 2011 Libya campaign.

He has urged EU countries to boost defence budgets for Syria, to help defeat the Islamic State, author of the recent Paris and Brussels terror attacks and reason for the massive refugee surge into Europe.

Then there is Ukraine, where an EU-brokered ceasefire is once again faltering. The EU will decide by July whether to extend economic sanctions on Russia as a result.

The European Council on Foreign Relations says all of this demonstrates "a dramatic shift in the agenda of EU-US relations", with the US "relatively insulated from the costs of sanctions, refugees, and terrorism, while Europe is in the firing line".

The EU and US are also divided over debt relief for Greece, while the bloc's state aid chief has had to defend herself against US accusations that she is "disproportionately" targeting American multinationals such as Apple, McDonald's, and Starbucks.

With so many different flash points to contend with, it is difficult to see where the endgame is for EU-US relations.

"We have in general a reasonably good relationship," says MEP Marian Harkin. "If we fell out amongst ourselves, it would only benefit the Putins of this world."

Irish Independent

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