WASHINGTON/BRUSSELS The European Union's threat to take access to financial services off the table in a trade deal with the United States is an empty one because it has already signed up to international agreements allowing such access, an official close to the talks said on Wednesday.
The European Union has excluded financial services, such as banking, from a market access offer in services under the Transatlantic Trade and Investment Partnership (TTIP), amid a dispute over financial regulation.
The European Commission has been pushing Washington to work towards harmonizing rules on financial services but said the U.S. refusal to do so meant it was no longer offering greater access to its financial services market.
This could affect how easy it is for a foreign bank to open a branch in another country, for example.
In a document prepared at the end of May setting out its offer for services and investment, the European Commission said its new offer did not contain any commitments on financial services.
"Given the firm U.S. opposition to include regulatory cooperation on financial services in TTIP, it is considered appropriate not to include any commitments on financial services in the EU's market access offer at this stage," the text read.
An official close to the talks said U.S. banks already had access to the European market under international agreements dating back 20 years.
The EU had also made a services offer in a separate multilateral services trade deal, to which the United States is a party, which did include financial services, the official said.
The United States, for its part, had put up a TTIP proposal giving access to almost all services sectors and the official said he hoped that the EU position would not complicate discussions about services, which should be less difficult to negotiate than some other issues.
The EU document said that the situation might change in the future if the U.S. showed a readiness to cooperate on regulation.
U.S. politicians have expressed concern that the TTIP could weaken or even roll back reforms, such as the 2010 Dodd-Frank Act, which is designed to prevent another financial crisis.
Sensitive to these concerns, U.S. officials have said they wish to discuss financial regulation in parallel talks outside those driving towards a comprehensive free trade deal. They also say there are a number of international forums where further reforms are already being discussed.
(Reporting by Krista Hughes and Douwe Miedema in Washington and Phil Blenkinsop in Brussels; Editing by Eric Walsh)