THE EUROPEAN UNION will this summer begin talks with the United States on producing a free-trade agreement that would be the biggest such trade deal in history.
European Commission president Jose Manuel Barroso made the announcement after President Obama backed reducing trade barriers in Tuesday’s State of the Union address.
Under an outline for the deal, the two sides expect it to add 0.5 per cent to the EU economy and 0.4 per cent to the U.S. economy by 2027 – equivalent to €86bn (£55bn) a year for the Europeans and €65bn for the US.
The resulting free trade area could encompass half of world output and a third of all trade. It is hoped that talks – which depend upon the agreement of all EU member states and the US congress – can be completed at a brisk pace with a deal signed by the end of 2014.
“If we want to go down this road, we want to get there on one tank of gas and we don't want to spend 10 years negotiating what are well known issues and not reach a result,” White House adviser Michael Froman said yesterday.
Agriculture is likely to produce most disputes, particularly EU farm subsidies and the use of genetically modified crops in the US. Other issues include battle over state aid for aircraft manufacturers Airbus and Boeing.