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Largest Bilateral Trade Agreement in History Proposed

posted on June 21, 2013

President Obama traveled to Northern Ireland this week for meetings with leaders of the world’s largest economies.

The goal of the G8 Summit was to encourage cooperation and transparency on trade and taxes. But the president and his Russian Federation counterpart, Vladimir Putin, also found time to discuss what they called “different perspectives” on the conflict in Syria.

In its culminating declaration the G8 said: “Tax authorities across the world should automatically share information to fight the scourge of tax evasion.”

The big news from the summit, however, came early in the week when President Obama called for a significant trade deal with the European Union.

Largest Bilateral Trade Agreement in History Proposed

The largest bilateral trade agreement in history was proposed this week in Enniskillen, Ireland during the G-8 summit. U.S. and European Union members agreed to open negotiations on a broad trade deal that would slash tariffs and other barriers that restrict exports and competition.

President Barack Obama:  “And this potentially ground-breaking partnership would deepen those ties.It would increase exports, decrease barriers to trade and investment.  As part of broader growth strategies in both our economies and support hundreds of thousands of jobs on both sides of the ocean.”

Prime Minister David Cameron, United Kingdom: “We’re talking about what could be the biggest bilateral trade deal in history.”

Known as the Transatlantic Trade and Investment Partnership, or T-TIP, the pact would unite the world’s two mightiest economic regions in an agreement affecting more than 800 million people.

G-8 leaders rejected efforts to protect domestic markets and urged "driving forward free trade" under the central role of the World Trade Organization.

At stake is a vision of boosting the value of trans-Atlantic trade which already accounts for about half of global gross domestic product.

According to the Obama Administration, trade between the two economies already exceeds $1 trillion annually, amounts to $4 trillion in annual investments and is responsible for 13 million jobs on both sides of the Atlantic. If ratified, T-TIP is expected to boost the economies of the United States and the 27-member nations of the European Union by $300 billion annually and create 2 million jobs.

Obama predicted the parties involved would need to overcome sensitivities. While leaders would be giving strong mandates to their negotiators, Obama said he suspected the leaders themselves would need to intervene at certain points to work through hang-ups.

Later in the week, President Obama and Germany’s Chancellor Angela Merkel held a joint press conference to further promote T-TIP.

Chancellor Angela Merkel, Germany: “We will throw our effort behind this fully and squarely because we think that economies on both sides of the Atlantic will very much benefit from it.  It’s going to be a win-win situation and it also is an eloquent testimony to this globalized world where we can work better together, both politically and economically. So this is why I think this is a very, very important free trade agreement.  And I say this on behalf of the federal government as a whole.”

President Barack Obama: "...from our perspective, the relationship with Europe remains the cornerstone of our freedom and our security; that Europe is our partner in almost everything that we do; and that although the nature of the challenges we face have changed, the strength of our relationships, the enduring bonds based on common values and common ideals very much remains.”

Some protestors did gather near the Irish town of 15,000 but far fewer than were expected. No arrests were reported.

According to the White House, the trade proposal was well-received by Congress and the U.S. business community.

In response to the announcement, officials with the American Farm Bureau said they were "cautiously hopeful" that negotiations would yield positive results for U.S. agriculture.  American Farm Bureau President Bob Stallman said the planned talks "hold promise."

And the National Pork Producers Council urged the Obama administration to press the European Union to negotiate a "comprehensive" free trade agreement.

According to the White House EU-U.S. talks could start as early as next month. Both sides hope to reach an agreement by late in 2014.

Tags: Angela Merkel Barack Obama European Union G-8 Ireland news trade Transatlantic Trade and Investment Partnership WTO