Connect to share and comment
The United States and Europe will launch talks on what would be the world's largest free trade zone, US President Barack Obama declared Tuesday in his State of the Union address.
The move answered mounting calls from Europe to pursue a grand trade pact to spur growth on both sides of the Atlantic -- covering a region where two-way trade hit $646 billion last year.
"Tonight, I am announcing 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," Obama said in his signature annual speech.
Proposed years ago, the US-EU trade pact idea has been revived recently as both sides of the Atlantic seek avenues for growth and job creation for their weak economies.
On February 1, German Chancellor Angela Merkel greeted Vice President Joe Biden in Berlin with a call for movement on free trade talks.
And last week EU Trade Commissioner Karel De Gucht was in Washington to press the case.
Analysts have said the White House wants to fast-track talks as a bookend to the drawn-out Trans-Pacific Partnership, another free trade project Obama has pushed but which missed the end-2012 target for completion.
Obama added Tuesday that he would continue to pursue completion of the TPP, saying it was important "to boost American exports, support American jobs and level the playing field in the growing markets of Asia."
Both come amid frustration over the stalled Doha round of World Trade Organization talks, said Andras Simonyi, managing director of the Center for Transatlantic Relations at Washington's Johns Hopkins School of Advanced International Studies.
With the TPP still struggling to gain real traction, a transatlantic free trade agreement "is what will set the standards for trade, investment and regulations globally," Simonyi told AFP.
But Simonyi said it could serve a higher purpose, replacing the NATO defense treaty as the glue holding the two sides together.
"There are drivers that go beyond the immediate economic considerations and trade considerations," he told AFP.
A European diplomat said that the idea could push emerging economic giants like China to be more open.
"It is based on the idea that, in launching an ambitious accord between the two regions that dominate global commerce, they will push the emerging countries to open up more than they were willing to in WTO negotiations," the diplomat said.
"That could be a way of relaunching the frozen WTO negotiations on trade liberalization."