(VOVworld) – Negotiations on the Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU began in Washington on Monday with bilateral relations still raw after Edward Snowden’s revelations that the US National Security Agency has been spying on EU offices in Brussels and Washington. The revelations are expected to have a negative impact on the talks. Hong Van comments   

The first round of negotiations will discuss the range and scale of the topics for discussion. The US and the EU produce nearly half of the world’s goods and services and account for 30% of world economic turnover. The US is the EU’s biggest trading partner. Two-way trade value reached 449 billion euros in 2011, which increased to 646 billion euros in 2012 with foreign investment flows worth a total of 1 trillion USD.

If successful, the TTIP could give an additional 119 billion euros a year to the EU and 95 billion Euros a year to the US and generate millions of new jobs. EU automobile manufacturers in the US would likely earn higher revenues and the EU would become less dependent on Russian gas supplies. The US, meanwhile, expects that the TTIP would accelerate its economic recovery. Its GDP growth rate in the first quarter was just 2.5% and its unemployment rate in May increased 0.1% from April.      

British Prime Minister David Cameron calls the TTIP a historic bilateral trade deal. Jose Manual Barroso, President of the European Commission, a key EU negotiator, said he hopes the negotiation process will go smoothly.

Though the importance of the TTIP is obvious, both sides still face differences on a number of issues, including the reduction of tax regulations and other barriers that have hindered trade in agriculture, chemicals, automobile manufacturing, and finance. Resolving the differences is not an easy task as EU and US policies are contradictory. Culture is the biggest hurdle in TTIP negotiations. France has said it will veto any clause on audio-visual products while the US wants to include the liberal trading of cultural products on the agenda. France’s condition was first made in 1993, which put a wrench in the General Agreement on Tariffs and Trade, the predecessor of the WTO.

Although the European Commission has said negotiations should not be affected by the recent spying scandal, it has created some bad blood that will be hard to ignore.