The European Union and the US intend to commence negotiations on a bilateral trade deal by June, paving the way for the creation of the world’s largest ever free trade alliance.
Confirmation of the proposed deal followed US president Barack Obama’s State of the Union address on Tuesday night, in which he confirmed plans to pursue trade talks with Europe.
European Commission head José Manuel Barroso described the move to open negotiations as “groundbreaking”.
“A future deal between the world’s two most important economic powers will be a game-changer, giving a strong boost to our economies on both sides of the Atlantic,” he said.
The announcement of the agreement was also welcomed by the Irish Government, who will now play a key role in negotiating consensus between European member states on the EU’s position regarding the trade deal.
Negotiating plans
While the talks could take up to two years to conclude, the European Commission plans to present its negotiating plans to the European Council next month. The issue will be discussed at an informal meeting of trade ministers in Dublin in April, while agreement on a negotiating mandate is hoped to be reached by all EU member states at a meeting of EU ministers in June. Both meetings will be chaired by Minister for Trade and Employment Richard Bruton.
The report gave a green light for the opening of discussions, calling for a “comprehensive, ambitious agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and contributes to the development of global rules.” The announcement was also welcomed by British prime minister David Cameron.
The prospect of deepening trade ties between Europe and the US is seen by Britain as one of the key advantages of EU membership as the country considers its future relationship with the Union.
Europe and the US already account for 30 per cent of world trade, and about half of global GDP. However, talks on deepening this economic relationship have intensified in recent years, not least as a response to the strengthening economic power of countries in the East.
Mr Obama’s commitment to pursue the trade deal comes after lengthy delays to the completion of the working group report, and speculation in recent weeks of foot-dragging on the part of the US.
Despite the political will to pursue negotiations, some aspects of the EU-US trade deal are contentious. These include tackling non-tariff barriers, such as disparities in regulations and standards, and the import and export of agricultural products, with the US looking for better market access for US agricultural goods.
Mr Barroso said yesterday the negotiations would “not be easy”.
“For these negotiations to succeed, we need – above all – political will: a desire to make our rules and regulations compatible, and to cut tariffs whenever it makes sense and is possible.”
EU trade commissioner Karel De Gucht, who has been leading the talks, said the deal would need to remove any remaining traditional tariffs between the two blocs.
