BRUSSELS: The EU and the United States are to negotiate the biggest free trade agreement ever, a global “game-changer,” boosting growth and providing much-needed jobs, European Commission head Jose Manuel Barroso said on Wednesday.
An accord between the world's two largest trading entities would be “ground-breaking ... a game-changer,” which will add 0.5 per cent to the EU economy every year once it is in place, Barroso said.
Better still, “it's a boost to our economies that does not cost a cent,” he said, noting that after previous obstacles and objections, both sides were now ready for a deal.
The EU and US economies account for nearly half of global economic output and about a third of global trade, meaning an agreement will have profound implications for all, especially emerging giants such as China, Brazil and India for whom trade is a key development driver.
The negotiations will hinge on market access, and regulations and non-tariff barriers, both of which are often used to protect domestic markets, with agriculture likely to prove especially difficult as both sides jealously guard their farming interests and exports.
Last week, the EU and Canada failed to resolve problems holding up a free trade pact, with agriculture among “a number of important gaps to be bridged,”according to Brussels.
Barroso hailed President Barack Obama's commitment after he announced the talks overnight in Washington, saying an accord would be “an assurance that we mean business.”
”It shows that the EU and the United States are strategic partners who are ready to go the extra mile to strengthen their economies.”
Barroso said it was important to “get the ball rolling” as soon as possible, hoping that talks could begin in the first half of this year under Ireland's direction as current holder of the EU's six-month rotating presidency.
“The sooner we start, the sooner we can reach a succesful conclusion.”EU Trade Commissioner Karel de Gucht said “ideally, we want to finish this dossier within two years.”
Obama told Congress on Tuesday in his State of the Union address that he had agreed to open the talks “because trade that is free and fair across the Atlantic supports millions of good-paying American jobs.”
British Prime Minister David Cameron welcomed the move, saying a deal would create jobs and boost prosperity.