TRADE: 2015 Target for EU-US Free Trade Deal

During his State of the Union inaugural speech for his 2nd term as US President, Barrack Obama announced that the US and the EU would begin high-level negotiations for a trans-Atlantic free trade agreement.  EU Trade Commissioner Karl de Gucht stated that the bilateral pact is planned to be finalised in couple of years.  European Commission head Jose Manuel Barroso described the accord as “groundbreaking” and “a game changer”.  In a joint statement, Obama, Barroso, and European Council President Herman Von Rompuy announced that de Gucht and the US Trade Representative Ambassador Ron Kirk will launch the negotiations for the trade partnership.   Barroso stated that this pact would be a boost to the US and EU economies that doesn’t “cost a cent.”  In 2012, the two-way trade was worth €480 billion.

The broad free-trade agreement would fundamentally redraw the map of worldwide trade.  Presently, goods and services traded between the EU and the US constitute the largest bilateral economic partnership in the world, amounting to more than €1.8 billion daily.  The combined GDPs of the US and EU account for approximately half of the worldwide economic output and one-third of the global flow of goods.  Given the economic downturn that has lingered within the US and the EU and the global economic threat from Asian economies, including China and Russia, this pact is considered to be a reaction to this economic threat.  Discussions about such a global free trade area between the US and EU has been discussed several times over the generations and political consensus has always been lacking.  The economic challenges from other global regions and the prolonged economic downturn are slowly gaining support throughout EU member states.  German Chancellor Angela Merkel and British PM David Cameron have publicly supported the idea.  Barroso noted that after previous obstacles and objections, both sides were now ready for a deal.

In view of Croatian exporters’ expected loss of trade in the region, due to being excluded from the Central European Free Trade Agreement after EU membership, future access to US markets could partially compensate for the loss in trade, especially if they are able to resolve the cost of transport through advantageous partnerships with other EU partners…

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