By David Lawder

WASHINGTON, June 24 (Reuters) – Britain’s looming exit from the European Union is one other big setback for negotiations on a large U.S.-EU free commerce deal that have been already stalled by deeply entrenched variations and rising anti-trade sentiment on each side of the Atlantic.

The historic divorce launched by Thursday’s vote will virtually actually additional delay substantial progress within the Transatlantic Trade and Investment Partnership (TTIP) talks because the remaining 27 EU states type out their very own new relationship with Britain, commerce consultants mentioned on Friday.

With French and German officers more and more voicing skepticism about TTIP’s probabilities for achievement, the United Kingdom’s departure from the deal may sink hopes of a deal earlier than President Barack Obama leaves workplace in January.

“This is yet another reason why TTIP will likely be postponed,” mentioned Heather Conley, European program director on the Center for Strategic and International Studies, a suppose tank in Washington.

“But to be honest, TTIP isn’t going anywhere, I believe, before 2018 at the earliest,” she mentioned.

U.S. Trade Representative Michael Froman mentioned in a press release on Friday that he was evaluating the UK resolution’s impression on TTIP, however would proceed to have interaction with each European and UK counterparts.

“The importance of trade and investment is indisputable in our relationships with both the European Union and the United Kingdom,” Froman mentioned. “The economic and strategic rationale for T-TIP remains strong.”

TTIP negotiators are nonetheless anticipated to fulfill in Brussels in mid-July as scheduled, however these talks have been geared toward specializing in much less controversial points whereas leaving the thorniest disagreements for U.S. and EU political leaders to resolve. And it’s unclear when Britain will launch formal separation proceedings, which can take a minimum of two years.

But analysts mentioned each side have been reluctant to place their finest presents on the desk with a brand new U.S. president as a result of take workplace in January and French and German chiefship elections nearing in 2017.

The Brexit additionally will preoccupy EU officers in coming months as they launch their very own negotiations with London over the longer term phrases of UK-EU commerce, and type out their post-Brexit priorities, mentioned Hosuk Lee-Makiyama, director of the European Centre for International Political Economy, a Brussels-based suppose tank.

Britain’s departure may go away U.S. negotiators dealing with a European aspect that’s extra dug-in on some points, mentioned Chad Bown, a senior fellow on the Peterson Institute for International Economics, a suppose tank in Washington.

“As the UK is part of the coalition of liberal trading economies in the EU, the U.S. is losing one of the more like-minded countries from the group in Brussels sitting on the other side of the negotiating table,” mentioned Bown, a former World Bank economist.

However, Lee-Makiyama, who additionally sees little likelihood of a deal earlier than 2018, mentioned Britain’s departure may get rid of one supply of disagreement as a result of the UK has insisted on a monetary companies chapter within the commerce deal.

“The only real proponent of banking regulation in TTIP is the UK. Germany and France are probably willing to let it go,” he mentioned. “It still leaves about 20 outstanding issues at nearly the same level of difficulty.”

The TTIP negotiations, which began three years in the past, have unable to settle main variations over agriculture, the place the EU aspect has proven little willingness to change meals security guidelines that prohibit American beef raised with hormones or genetically modified meals, or open its carefully guarded geographical meals naming guidelines, corresponding to for Asiago and feta cheeses.

European negotiators have complained that the United States has supplied too little to open up its huge federal, state and native authorities procurement markets to European distributors with “Buy American” preferences in place.

Europe additionally needs entry to key U.S. sectors corresponding to maritime transport and aviation, whereas American negotiators have been pissed off over lack of entry to some 200 European sectors starting from healthcare to training.

The two sides are also far aside on learn how to resolve disputes. The U.S. aspect favors a conventional binding arbitration method, whereas the Europeans desire a court-like system that enables for appeals.

More progress has been made on harmonizing rules for issues like automobile seat belt anchors, garments labeling and pharmaceutical inspections. (Additional reporting by Phil Blenkinsop in Brussels; Editing by Jonathan Oatis)

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