President Barack Obama pledged to pursue a trade agreement with the European Union that would expand the world’s largest economic relationship, while at the same time completing discussions for a Pacific-region accord.
“Trade that is fair and free across the Atlantic supports millions of good-paying American jobs,” Obama said yesterday in his State of the Union speech. It was his strongest commitment to trade negotiations with the EU.
Talks with the 27-nation EU may help Obama meet his goal of doubling exports by the end of 2014 as other global trade negotiations stall and China increases its role internationally. Obama’s administration also plans to wrap up negotiations on the Trans-Pacific Partnership with 10 nations and increase America’s role as a manufacturing center.
U.S. and EU negotiators, led by U.S. Trade Representative Ron Kirk and European Trade Commissioner Karel De Gucht, issued a report today recommending the talks aim to remove all duties on bilateral trade, increase market access on both sides for goods and services and provide greater compatibility between American and European regulations.
U.K. Prime Minister David Cameron, who has said he’ll push for an EU-U.S. accord at the Group of Eight summit in Northern Ireland this year, welcomed Obama’s announcement.
“Breaking down the remaining trade barriers and securing a comprehensive deal will require hard work and bold decisions on both sides,” Cameron said in an e-mailed statement today. “But I am determined to use my chairmanship of the G-8 to help achieve this and to help European and American businesses succeed in the global race.”
While trade and investment between the U.S. and the EU was valued at $4.5 trillion in 2011, the partners have been at odds over issues including farm subsidies, health protections and regulatory standards. Kirk has said he plans to leave office by the end of this month. A replacement hasn’t been named.
“We are committed to making this relationship an even stronger driver of our prosperity,” Obama, EU President Herman Van Rompuy and European Commission President Jose Barroso said in a joint statement today.
Negotiating both accords at the same time is doable because they will be on separate tracks, Ken Monahan, senior trade analyst at Bloomberg Government, said by e-mail. The nations seeking a Pacific trade pact have targeted late 2013 to wrap up those talks, while the U.S. and EU probably won’t reach an agreement until next year at the earliest, he said.
“Negotiations will not be easy, but they have enormous potential to open new opportunities for us to sell our goods and services in the EU,” House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said in a statement.
Congressional support for an EU deal depends on issues including better market access for U.S. agricultural goods, strong intellectual property protections and a means to settle disputes, leaders of the Senate Finance Committee said yesterday in a letter to Kirk.
A free-trade agreement between the U.S. and EU is an “enticing opportunity,” the senators, Max Baucus, a Montana Democrat, and Orrin Hatch, a Utah Republican, wrote.
The EU, reeling from a sovereign-debt crisis, and Washington-based industry groups including the U.S. Chamber of Commerce and the Business Roundtable have urged the Obama administration to pursue a trans-Atlantic accord.
While Vice President Joe Biden said in Munich on Feb. 2 that such as deal is “within our reach,” he cautioned: “The question now is whether the political will exists to resolve those long-standing differences.”
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