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US shutdown puts free trade talks with EU at impasse

us-eu-flags_siThe United States has no choice but to delay negotiations over a major free trade deal with countries in the European Union because of the partial federal government shutdown, the Obama administration has said.

Michael Froman, a US trade representative working within an  agency of the same name (USTR), phoned European Union Trade  Commissioner Karel Del Gucht Friday to inform the Belgian  politician that US officials would not be taking a scheduled trip  to Brussels next week to discuss future plans.

Washington and the EU were expected to meet for the second time  on the Transatlantic Trade and Investment Partnership, according  to Reuters. The agreement will become the world’s largest  free-trade deal if it is signed when the shutdown is  lifted.

Over 800,000 US government workers are temporarily out of work  after negotiations over the federal budget ground to a halt in  Washington earlier this week. More employees are likely to be  placed on unpaid leave as the conflict drags on. Major government  contractors, including Lockheed Martin, have begun announcing  their own furloughs as the impact reverberates.

USTR will work with the [European] Commission to craft an  alternative plan that can begin once the US government shutdown  ends,” the USTR said in a statement.

Framers of the agreement have promised that the deal would  stimulate employment in both the United States and Europe, where  the jobless rate stood at 12 percent through August and September  according to Eurostat, the statistical agency of the European  Union.

Karel De Gucht, who has been the European commissioner for trade  since 2010, said in a statement that the cancellation of the  meetings “in no way distracts us from our overall aim of  achieving an ambitious trade and investment deal.”

US President Barack Obama announced the first round of  negotiations with the EU Trade Commission on the first day of the  G8 Summit in June. Meeting with trade representatives and leaders  from some of the 17 countries represented in the EU, Obama  proposed that a settlement between the two entities could  eliminate all trade tariffs, strengthen rules-based investment,  and determine improved market access on trade-in services, among  other possibilities.

“America and Europe have done extraordinary things  before,” Obama said in Northern Ireland, going on to say that  he hopes they will create “an economic alliance as strong as  our diplomatic and security alliance.”

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