Europe pressed to hasten U.S. trade deal after Pacific accord

By Philip Blenkinsop

BRUSSELS (Reuters) - A newly forged Pacific Rim trade deal opens the door for Europe to seal its own free trade partnership with the United States but also increases pressure on Brussels to accelerate stalled talks to avoid being left behind.

Twelve countries, including the United States, on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world's economy.

The European Union is pursuing its own trade accord with the United States, called the Transatlantic Trade and Investment Partnership (TTIP), that would encompass a third of world trade and nearly half of global GDP. Talks to date appear stalled.

Washington had been expected to want the Trans-Pacific Partnership (TPP) concluded before moving on to TTIP.

European Trade Commissioner Cecilia Malmstrom described the end of Pacific Rim trade talks as good news.

Marietje Schaake, trade expert of the Liberals group of European lawmakers, said the United States should be able to free up time and political capital for TTIP, leaving no excuse not to discuss challenging topics.

"The conclusion of TPP should also remind Europe that we will either be driving rules and standards for global trade, or other countries will set their own standards," she said.

Hosuk Lee-Makiyama, director of the European Centre for International Political Economy, said TPP would divert trade, driving up U.S. gross domestic product at the expense of Europe.

"We need TTIP to get back to zero," he said.

TPP, which still needs backing from sceptical U.S. lawmakers, will eliminate or cut tariffs on almost 18,000 categories of goods.

TTIP is envisaged to go far beyond removing already low import duties and is seen as a new form of trade agreement, more concerned with agreeing on regulation and common standards to cut business costs, providing a model for others to follow.

EU TALKS WITH U.S., JAPAN STALLED

The more ambitious TTIP is the logical next step, with an estimated gain of more than $100 billion (£66 billion) for both economies, each searching for growth in the face of a slowdown in China.

However, EU officials have complained in trade rounds to date of inflexibility from U.S. negotiators and a lack of ambition over the extent to which tariffs could be cut.

French trade minister Matthias Fekl said last week that the United States had failed to make a serious offer.

"France will look at all the options. If there is not a total change of attitude, we will look at all our options, including simply breaking off these negotiations," he said.

But EU officials also say some of the EU's 28 members profess in Brussels to want TTIP, but then appear far cooler when speaking to a sceptical public at home.

EU trade ambitions also go beyond just the United States.

Of the 12 TPP parties, the European Union already has bilateral trade deals in place with Mexico, Chile, Peru and Singapore, has reached provisional deals with Canada and Vietnam and is in talks with the United States, Japan and Malaysia.

Australia and New Zealand are also pushing to open trade talks with the European Union.

EU officials have said they sensed Japan might also have been stalling until TPP was done. It too may find its negotiating position strengthened.

Peter van Ham of Dutch think tank the Clingendael Institute said that may not be a bad thing. "TPP puts pressure on, but sometimes you need that pressure, that brinkmanship to get things done," he added.

(Editing by Catherine Evans)