Tuesday

31st May 2016

Obama gives green light to EU-US trade deal

US President Barack Obama has given the green light for comprehensive trade talks between the EU and the US, paving the way for what could become the largest single free trade zone in the world.

Delivering his annual State of the Union address to the US Congress on Tuesday (12 February), he told legislators that "we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union - because trade that is free and fair across the Atlantic supports millions of good-paying American jobs."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Obama (c): 'Trade that is free and fair across the Atlantic supports millions of good-paying American jobs' (Photo: whitehouse.gov)

Although the move does not come as a surprise, it is a coup for EU diplomats who have been working behind the scenes since November 2011 on preparing the ground for the bilateral free trade agreement.

A deal not just on the elimination of tariff barriers but also on harmonising regulatory and technical standards for products could generate 2 percent of GDP.

The US and the EU already have a huge trade relationship, worth $2.7 billion per day in goods and services, but since November 2011, they have been exploring ways to deepen ties amid rising global competition, particularly from China.

Estimates by the European Commission indicate that a transatlantic trade partnership could be worth around €275 billion per year and lead to the creation of 2 million new jobs.

Joao Vale de Ameida, the EU's ambassador in Washington DC said he is "very happy" with the news, adding that "we will have a much greater influence if we are together."

For his part, Finnish Europe minister Alexander Stubb, commented that it was "good news for the world economy, growth and jobs."

Meanwhile, Dutch Liberal MEP Marietje Schaake called on the EU commission to immediately present proposals to the European Parliament for a formal negotiating mandate.

Although tariff barriers between the two sides are already low - under 3 per cent in most cases - some economic sectors such as agriculture and manufacturing are heavily subsidised on both sides of the Atlantic.

US and EU officials are also expected to focus on harmonising regulation and technical standards.

The EU is currently devoting heavy political capital to bilateral trade accords.

A free trade agreement was agreed with Singapore in December, while a deal with Canada is expected to be completed imminently.

Negotiations with Japan are also expected to be launched in Tokyo in April, meaning that the EU will spend the next year brokering trade deals with two of the world's largest economies.

The bilateral deals come after trade talks at the multilateral level stalled following the collapse of the Doha round of World Trade Organisation negotiations in 2005.

The financial crisis and the recession later prompted a series of protectionist measures to safeguard national economies.

The WTO says that only 18 percent of the trade restricting measures adopted by G20 countries since 2008 have been scrapped, amounting to a total loss of 3 percent of world trade - equivalent to some €350 billion.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceSugar-Sweetened Beverage Sales Barometer Unveils Unhealthy Drinking Patterns in Europe
  2. EJCWelcomes EU Commission Code of Conduct on Countering Illegal Hate Speech Online
  3. Access NowEDRi & Access Now Withdraw From the EU Commission IT Forum Discussions
  4. EJCCalls on EU Parliament to Take Action Against MEP who Compared Israelis to "a rash"
  5. EU Sustainable Energy WeekHave Your Say On Europe's Energy Future At Our High-Level Policy Conference.
  6. CESIUpcoming On June 14: CESI@Noon On ‘Labour Market Integration Of Regugees’
  7. ACCAEducation and Training 2020 - Giving Young People the Workplace Skills They Need
  8. EPSUTrade Unions Back New Undeclared Work Platform
  9. European Healthy Lifestyle AllianceCould targeting children’s fitness boost academic performance?
  10. World VisionDeclares the World Humanitarian Summit a Positive Step in a Longer Journey to Ending Need
  11. EJCPresident Dr. Moshe Kantor on Brexit and the Jewish Question
  12. Swedish EnterprisesNew Rules For Posted Workers - Better Protection or the End of Posting ?