* Interest in deal that would encourage banks to stay
* How to regulate derivatives among the tough issues
* Negotiations expected to start in July
By Doug Palmer and Douwe Miedema
WASHINGTON, April 18 The United States and the
UK aim to include financial services in a proposed free-trade
agreement between America and the 27-nation European Union, the
British ambassador to the United States said on Thursday.
The accord would aim to smooth out regulatory differences
that have stunted U.S.-EU trade in areas such as agriculture,
chemicals, pharmaceuticals and autos. The EU is already the
largest U.S. trading partner.
"We are pretty keen, pretty clear, that as the owners of the
two most significant international financial centers, on either
side of the Atlantic ... that we would both like to see
financial services covered by these negotiations," the UK
ambassador to the U.S. Peter Westmacott said.
He was speaking during an event at the National Foreign
Trade Council, a U.S.-based business group.
EU financial services chief Michel Barnier has also come out
in favor of the move, a spokeswoman for the bloc said. U.S.
officials were not immediately available for comment.
Finding common ground on regulatory and market access issues
could encourage banks and insurers to expand across the Atlantic
instead of moving to other parts of the world.
The agreement would likely address issues such as what
percentage of people on the board of a foreign bank need to be
U.S. citizens, and what stake foreign banks can hold in U.S.
financial institutions, another UK diplomat said.
Thornier problems would have to be dealt with separately,
this person said, such as derivatives regulation and the
challenge of "too big to fail" banks.
The White House formally notified Congress in March of its
plan to negotiate a comprehensive trade and investment agreement
with the EU.
That letter outlined the administration's desire to
negotiate new market openings for U.S. services companies and to
improve regulatory cooperation across the Atlantic. It did not
specifically mention financial services sectors such as banking
But working groups from the U.S.-EU business coalition are
already looking at market access barriers and regulatory issues
related to insurers and banks and considering comments from
companies, a U.S. business official said.
Talks on the free-trade pact are expected to begin in July,
although no dates have been announced yet.
Britain hopes the upcoming Group of Eight summit meeting in
Northern Ireland in June could help set the stage.
"We think it might be sensible drawing the world's attention
to the importance of (the trade pact) before, during or after
the G8 summit ... that might be a good time to get it all
going," Westmacott said.