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
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
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
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
A report jointly released Wednesday by the US and the EU finds
that a transatlantic trade deal would boost the EUs economy by about