State of the Union: Obama Backs Trans-Atlantic Trade Deal with EU

By in Washington D.C.

US President Barack Obama backed a trans-Atlantic free trade agreement during his State of the Union address on Tuesday. Zoom
REUTERS

US President Barack Obama backed a trans-Atlantic free trade agreement during his State of the Union address on Tuesday.

Both Chancellor Angela Merkel and British Prime Minister David Cameron have long favored a potential trans-Atlantic free trade agreement. Though US President Barack Obama backed the idea in his State of the Union address on Tuesday evening, wrangling over the details could prove problematic.

When the most powerful man in the world holds a State of the Union address, as President Barack Obama did on Tuesday evening in Washington, political stakeholders listen closely. They comb through the text, looking for messages in the lines and between them.

This year, however, some of the most attentive listeners were not sitting in the joint Congressional session on Capitol Hill, or even in the US at all. Rather, they were sitting in capital cities across Europe. European Union leaders, Chancellor Angela Merkel and British Prime Minister David Cameron chief among them, were hoping for a clear commitment to the pursuit of a trans-Atlantic free-trade zone. It is an idea the Europeans threw their support behind at the last EU summit in Brussels.

And Obama didn't disappoint. "Tonight, I'm announcing that we will launch talks on a comprehensive trans-Atlantic trade and investment partnership with the European Union," he said. "Because trade that is fair and free across the Atlantic supports millions of good-paying American jobs."

Finally, the project that has long been cause for euphoria among trans-Atlanticists has received an official seal of approval from the highest level. America and Europe, in different weight classes when it comes to foreign and military policy, are to fight the economic battle in a class of their very own: Super heavyweight.

'Limitless Fruits of Success'

Trade between the two regions already accounts for more than 50 percent of the global gross domestic product and secures an estimated 15 million jobs. US investments in France and Belgium alone in 2010 were as high as in India and China combined, says Dan Hamilton from the Center for Transatlantic Relations at Johns Hopkins University.

Should this trade become easier due to the elimination of tariffs and, in particular, cumbersome regulations, it could generate economic growth of up to 1.5 percent on both sides of the Atlantic, according to estimates by the US Chamber of Commerce. Vice President Joe Biden says that if such a deal goes through, "the fruits of success would be almost limitless." Those involved in trans-Atlantic issues refer to the agreement as "an economic NATO."

Still, Obama's support does not mean the agreement is a done deal. The devil is in the details. Whether it has to do with the length of car bumpers, the permissibility of genetically modified corn or the correct method to be used when slaughtering beef, trade talks are often just as complicated as nuclear non-proliferation negotiations. By their very nature, they touch on issues that are often vital to the cultural identities of certain countries or regions. Already, small armies of officials have failed to find adequate answers to such questions. Most recently, the Trans-Atlantic Economic Council created by Merkel in 2007 became bogged down in the bureaucratic brambles.

Some interest groups have refused to budge. The powerful US agrarian lobby, for example, insists on unlimited access to European markets, including such products as genetically modified produce, which is controversial on the Continent. European companies, for their part, refuse to accept the diktats of US regulatory authorities regarding whether and how they can pursue state contracts.

Crash-Test Dummies

"The question is whether independent US authorities will accept European standards, and vice versa," says Daniel Gros from the Center for European Policy Studies in Brussels. In previous efforts to reach agreement, officials from the two sides couldn't even agree on a joint model for crash-test dummies.

Furthermore, US Congress must ultimately approve a free-trade agreement, whatever the final result might be. Many conservative lawmakers, however, have little faith in European unity, noting for example that French President François Hollande does not share the enthusiasm for expanded free trade exhibited by Merkel and Cameron. The applause for Obama's free-trade comments during his State of the Union address was notably unenthusiastic.

Still, the timing of his push is propitious. Hope for a worldwide free-trade agreement, first proposed in the Doha Round a decade ago, has essentially evaporated. At the same time, both Europeans and Americans know that their economies badly need stimulus, yet neither side has money for a far-reaching program. Growth through the reduction of trade barriers is an attractive prospect.

Furthermore, promoting a trans-Atlantic agreement would allow Obama -- on the eve of his planned visit to Berlin in June -- to address European concerns that the US has turned away from the Continent in favor of Asia. "A trans-Atlantic agreement would be a signal that America and Europe want to mutually strengthen their economic capabilities and thus gain renewed political momentum," says Constanze Stelzenmüller from the German Marshall Fund in Berlin. But in his Tuesday evening speech, Obama still lauded the benefits of a trans-Pacific trade agreement with Australia and Asian countries before he mentioned the trans-Atlantic deal.

From the European perspective, an "economic NATO" would be a sign of European unity and would open up the possibility for cooperation from countries with similar market philosophies from other regions, says Kristen Silverberg, the former US ambassador to the European Union.

Skeptics, on the other hand, see the possibility of a trans-Atlantic agreement as little more than a defense against the new economic superpower of China and an attempt to cement "Western values."

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1. Feet & Inches
thorpeman@sky.com 02/13/2013
Zitat von sysopBoth Chancellor Angela Merkel and British Prime Minister David Cameron have long favored a potential trans-Atlantic free trade agreement. Though US President Barack Obama backed the idea in his State of the Union address on Tuesday evening, wrangling over the details could prove problematic. http://www.spiegel.de/international/world/us-president-obama-backs-trans-atlantic-free-trade-agreement-with-eu-a-883104.html
Nothing on earth is going to entice the Americans to stop using feet & inches, Pints & Gallons, Fahrenheit & Miles. The tree huggers in Europe wont accept American GM food which is better & cheaper than French & Italian produce & you certainly wont find any horses in a beefburger but that wont matter to the protectionist subsidy junkies that live off CAP to produce over priced food that adds nothing to peoples lives except shopping basket inflation
2. The new order to wait for the world to validation…..
cdq-sky 02/14/2013
“ Every Civilization of the birth is an annotation to the Common structure of Civilizations; Every Country of the birth is a promise to the Common structure of Civilizations; Every Life of the birth has Connotation of the Common structure of Civilizations ”——The new order to wait for the world to validation…..Which one of the space can be the first to put it into the Constitution? http://cn.linkedin.com/in/caodaqing
3.
victor_o 02/16/2013
European leaders are very warm to the idea regarding Trans-Atlantic free trade (http://www.cardealexpert.com/news-information/auto-news/obama-free-trade-zone-eu/), but sources suggest that an actual deal is most likely years away. According to President Obama, instituting a more efficient Trans-Atlantic free trade policy would lead to “millions of good-paying American careers.” The senators, who have not yet been identified, expressed concern that this would weaken U.S. regulatory standards and place intellectual property rights in danger.
4. Free trade is not trade
ray.tapajna 04/22/2015
The Cleveland Plain Dealer has the audacity do ask its readers this question:Do foreign trade deals help or hurt U.S. workers? We have miles of streets with empty stores and empty factories. Millions of workers have lost their jobs and businesses due to free trade. Free trade came and caused the most massive dislocation of workers in history. The Social Gospel was ripped apart. The trade deficit has broken records for years. More than a million lost their jobs in the computer industry. OUR ECONOMY BASED ON MONEY ON MONEY INSTEAD OF MAKING THINGS IS BURNING AWAY Even former Federal Reserve Chairman Ben Bernanke said the best way to stimulate the economy is to "buy domestically produced goods." Free trade is an economic nightmare. Our own federal government sponsored the moving of factories outside of the U.S. starting in 1956. It was suppose to be a temporary program but it never ended. Somewhere along the way, the program was labeled free trade although it was not about trading products but moving production anywhere in the world for the sake of cheaper labor for the sake of investments. The value of workers and labor was degraded and deflated. This alone represents trillions of dollars in value lost forever. This value is a real asset. It is the best way to grow value. It is a better money standard than all the funny money created out of nothing by the Federal Reserve. The more values that remain local, the more money there is. With free trade economics, all the money spent at the retail or end user level quickly fans out to where the products are made. It does not stay in place to recycle our economy. And cheaper imports cost jobs. Our middle class production worker class was smashed by free trade. Many of the working poor need government assistance and private charity to survive. In 1995, President Clinton had to bail out the free trade process by rushing billions of dollars to Mexico to save the peso and the Mexican economy. This happened even though more than 4,000 U.S. factories were moved to Mexico. The flood of Mexican workers coming to America seeking economic survival continued. Free trade was a failure. The headlines in the 1990s were about major companies and businesses closing down or firing workers. Free trade has produced the most massive dislocation of jobs in U.S. history including the Great Depression. Millions of workers lost their jobs including those in the computer industry And so it goes. The globalist free traders have been bailed out and the Plain Dealer has the nerve to ask us if free trade economics is good or bad. God help us now. Just think what all the lost values and money could have accomplished for out country and for that matter the whole world. We could have had many humanitarian programs instead of war. The value of workers and labor has been degraded and deflated, the trade deficit and President Obama's bail of free trade economics represents trillions of dollars lost forever.
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