The United States pledged to keep any new free trade deal from weakening its financial regulations, and said it would press Europe and Asia to match U.S. efforts to make banking and securities trading safer.
Washington is currently discussing potential trade deals with the European Union and with a group of countries in the Asia-Pacific region.
“We will not allow these agreements to serve as an opportunity to water down domestic financial regulatory standards,” Treasury Secretary Jack Lew said in prepared remarks for a speech in Washington.
U.S. and EU negotiators held a second round of talks last month for what would be the world’s largest free trade zone.
One challenge in the negotiations has been the differences in financial regulations between the two countries. The EU wants financial regulation to be a central part of an agreement whereas Washington is resisting, worried this will bog down the already complex talks.
America overhauled its financial regulations following the 2007-09 financial crisis. Lew said the overhaul means any financial firm could now be broken up quickly if it posed a risk to the broader financial system, and he said he supports a rule expected to be finalized next week that would restrict Wall Street firms when they make trades with their own money. The planned regulation is known as the “Volcker Rule” after former Federal Reserve Chairman Paul Volcker.
Lew said he expected other countries to follow America in efforts to make the financial system safer and avoid future crises.
“We will press other jurisdictions to match our robust standards — including in Europe and across Asia,” he said. (Reuters)