In State of the Union, Obama Calls for Free-Trade Pacts of Historic Scope
LaFranchi, Howard, The Christian Science Monitor
Cheaper Italian pasta in US supermarkets? More Mustangs prowling the byways of Provence?
President Obamas announcement in his State of the Union address Tuesday night that the United States and European Union will begin negotiating creation of the largest free-trade area in history may have visions of cheaper imports from the other side of the Atlantic dancing in consumers heads.
But perhaps the most significant impact of a trade partnership between two mammoth economies that already make up half of all global output and a third of global trade would be the streamlined investment rules and product standards and elimination of trade barriers that would become the model for international trade.
This really is more global than it is bilateral, says a senior European official.
For both US and EU officials, a transatlantic free-trade deal with global ramifications would be a way of getting around global trade talks launched in 2001, called the Doha Round, which have gone nowhere.
Negotiating a US-EU trade partnership, even as the US is negotiating a Trans-Pacific Partnership (TPP) envisioned as a prototype for a vast Asia-Pacific free-trade area, could mean that before the end of Mr. Obamas presidency two major pillars of a globalized trading system would be in place.
With two of the worlds dominant economic powers trading based on streamlined and common rules and standards, other economies seeking to take part in the expanding global trading system would find it in their interest to adopt the same or at last similar rules and standards, trade experts say.
"The transatlantic relationship is so intertwined with the global economy that any amount of streamlining of standards and regulatory convergence is going to increase economic growth globally, says Charles Dittrich, vice president for regional foreign trade initiatives at the National Foreign Trade Council (NFTC) in Washington. Such a high level of cooperation and convergence between the US and the EU has the potential to serve as a basis for a broader adoption of common trade rules and standards with other countries.
Still, what explains the renewed enthusiasm for big trade deals? The answer is in the added economic growth and therefore the new jobs that many economists say the expansion of free trade would produce.
A report jointly released Wednesday by the US and the EU finds that a transatlantic trade deal would boost the EUs economy by about 0. …