The Opportunity is there for a Transatlantic Trade Agreement

Dec 11, 2012

Photographer: Ken James/Bloomberg.

A transatlantic trade pact between the United States and the European Union is becoming more than a good idea tossed around by trade experts:

After years of battling each other on trade issues, U.S. and European officials are contemplating a dramatic change in direction: joining together in what could be the world's largest free trade pact in an attempt to boost their struggling economies.

Discussions are in the most preliminary of stages and there would be significant obstacles to overcome, including sharp differences on agriculture, food safety and climate change legislation. Still, top EU and U.S. officials have said they want to see it happen. And America's main labor group, often the biggest opponent of U.S. trade pacts, says it wouldn't stand in the way.

Last month, Secretary of State Hillary Rodham Clinton signaled the Obama administration's interest during a speech on trans-Atlantic relations.

"If we get this right, an agreement that opens markets and liberalizes trade would shore up our global competitiveness for the next century, creating jobs and generating hundreds of billions of dollars for our economies," Clinton said.

European officials, including EU Commissioner for Trade Karel De Gucht, have also expressed enthusiasm. Both sides are awaiting a report within weeks by a working group they appointed to study the issue. A positive recommendation could lead to negotiations early next year.

As Myron Brilliant, U.S. Chamber Senior Vice President, International Affairs wrote earlier this year, such an agreement would grow both economies:

In October 2010, a study by the European Centre for International Political Economy demonstrated that simply eliminating tariffs between the United States and European Union would add $180 billion to our economies over five years. This is just the tip of the iceberg. If the United States and European Union can liberalize services even further, enhance investment and address regulatory differences between us, an even greater impact will be felt on both sides of the Atlantic.

"The opportunity is there. It is golden. We should take it," added Peter Chase, the U.S. Chamber's Vice President, Europe.

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