LONDON (Reuters) - Failing to agree a transatlantic free trade deal would be damaging for the European Union and send a message that the bloc has waning international importance, Britain's Minister for Europe said on Thursday.
This year is crucial in making progress on the Transatlantic Trade and Investment Partnership (TTIP) before U.S. President Barack Obama leaves office, but so far nothing has been agreed. Each side has accused the other of trying to protect specific industry interests.
"If the TTIP project fails I think that will send a really dismaying message about Europe's waning importance in world affairs," David Lidington, Britain's Minister for Europe, told an event on EU reform.
"We should not pretend that that will have anything other than a damaging impact both economically and diplomatically."
Free-trade advocates say the agreement, which seeks to reduce trade barriers and harmonise regulations, will create a market of 800 million people, generate millions of jobs and serve as a counterbalance to Russian and Chinese power.
Those opposed say it will undermine European laws and allow U.S. multinationals to bully EU governments into doing their bidding. In Britain, protecting the National Health Service from privatisation has been a key concern of many opponents.
Lidington said he believed this could be overcome and warned that without the pact, "the alternative ... is that we wake up in a few years time and we find that the Pacific and Asian countries have set their own global benchmarked standards and Europe will be in the somewhat humiliating position of having to run after and copy what has been decided," he said.
Prime Minister David Cameron has promised to renegotiate Britain's ties with the EU before holding a membership referendum by the end of 2017 if his Conservatives win a May 7 election.
Speaking alongside German lawmaker Stephan Mayer, Lidington said Germany and Britain had a shared agenda for EU reform, including in areas such as boosting competitiveness and generating growth and jobs.
Mayer also said more needed to be done to tackle EU migrant abuse of social welfare systems, a key campaign issue for Cameron, but said this should be done through secondary legislation because it wouldn't be possible to make changes to the EU treaties by 2017.
"We have much more in common on this topic of immigration that we differ," he said.