EU and U.S. seek trade deal this year, knowing large hurdles remain

By Philip Blenkinsop

BRUSSELS (Reuters) - EU and U.S. negotiators said on Friday that they still needed to overcome large differences for a transatlantic free trade deal to be sealed this year, and factor in the impending exit from the European Union of Britain, one of the United States' biggest export markets.

The two sides are trying to agree on the Transatlantic Trade and Investment Partnership (TTIP), which supporters say could boost each economy by some $100 billion at a time when growth in China and emerging markets is slowing.

Chief EU negotiator Ignacio Garcia Bercero and U.S. counterpart Dan Mullaney told a news conference after a 14th round of talks that both sides were committed to sealing a deal before U.S. President Barack Obama leaves office at the turn of the year.

The partners have made progress on tariff elimination and on regulatory cooperation.

However, they are stuck over EU demands including greater access to public sector tenders; Garcia Bercero described the U.S. offer as a serious cause of concern.

Likewise, Washington is unhappy with the EU offer on services.

"Given the importance of this sector to both of our economies ... progress here has been noticeably and painfully slow," said Mullaney.

He also said that, while the economic rationale for TTIP remained strong, Britain's exit from the European Union would force a rethink as it was the largest market anywhere for U.S. services, and took 25 percent of U.S. exports to the EU.

"Imagine if the United States said, for instance, 'Well, maybe TTIP will not apply to California'. There is a certain reflection that the parties need to have on those kind of developments."

The two sides had previously planned to produce a single consolidated TTIP text by the end of July. Garcia Bercero said that was now more likely to come by the end of September after further meetings between U.S. trade chief Michael Froman and EU commissioner Cecilia Malmstrom.

Garcia Bercero acknowledged that the political environment was becoming more challenging. The environmental group Greenpeace echoed the view of many anti-TTIP campaigners on Friday by saying that it was time to hit the 'Stop' button.

But the EU negotiator said TTIP was instead a positive response to concerns about globalisation.

"If we want to have a shot at shaping globalisation, we need a like-minded partner that shares largely our views," he said.

Mullaney talked of a "unique window of opportunity" to complete TTIP this year that should not be allowed to slip away.

"After this year, with one political transition after another over the next few years, it could be quite a while before we pick up negotiations again."

(Reporting By Philip Blenkinsop; Editing by Kevin Liffey)