WASHINGTON - The U.S. hopes negotiations for a free trade deal with the European Union will drive growth-oriented reforms in the EU economy, the top American trade official said Tuesday.
In a similar vein, U.S. Trade Representative Michael Froman said China's recent agreement to negotiate a bilateral investment treaty with the United States is a chance to press for economic reforms in the Asian giant that could level the playing field for American businesses.
Froman told the U.S. Chamber of Commerce in Washington that one key to success in newly launched talks on a Trans-Atlantic trade deal with Europe will be eliminating unnecessary regulatory barriers to trade. And as Europe struggles to pull itself out of recession, Froman cautioned the bloc not to rely too heavily on exports to the U.S. as a way out of its current problems.
The proposed Transatlantic Trade and Investment Partnership has raised great expectations of boosting growth and jobs by eliminating tariffs and other barriers that have long plagued economic relations. It would create a market with common standards and regulations across countries that account for nearly half the global economy.
Froman said both the U.S. and European markets are heavily regulated and have high standards when it comes to health, safety and environmental protection. But he said they must eliminate unnecessary differences and frictions in regulation that prevent a free flow of goods and services across borders.
The two sides are at odds over agricultural and financial services regulation, among other restrictions.
Turning to China, Froman said he saw encouraging signs for bilateral relations as China's new leadership is grappling with a serious set of economic issues ranging to deciding whether it wants to rely so heavily on export-led growth to questions about air pollution and food safety.
"China agreeing to start negotiations on a bilateral investment treaty...is a potentially very important development and could help drive reform in China," Froman said.
China agreed to negotiate the treaty during annual U.S.-China security and economic talks in Washington earlier this month. The U.S. has been pushing for such a treaty for years, saying it would facilitate more protections and market access for American investors in China, where state-owned company enjoy many competitive advantages.
China's new leader, Xi Jinping, who met President Barack Obama last month in California, has signalled he intends to shift toward an economy driven more by domestic consumption and less by exports — changes that would benefit U.S. companies that want to sell products and services to China's fast-growing middle class.
Treasury Secretary Jacob Lew said at the time that the treaty was a priority for the United States and that it would work to level the playing field for American workers and businesses by opening markets for fair competition.