In a joint statement, President Barack Obama and the European Commission and European Council presidents said that they were encouraged by the interim report of the High-Level Working Group on Growth and Jobs set up last November at the EU-US summit.
“A strong outcome can enhance not only Transatlantic economic ties, but also address shared market access challenges in third countries and encourage a forward-looking multilateral trade liberalisation agenda,” reads the statement.
The exercise undertaken by the High-Level Working Group outlined the benefits of an ambitious and comprehensive market-opening arrangement for agricultural and manufactured goods, services and investment.
The preliminary talks also underlined that an ambitious deal could address the challenges of modernising trade rules and promoting a forward-looking agenda for trade liberalisation, finding a way to break the deadlocked Doha round negotiations.
The economic relationship between the US and the 27-country bloc generates around €4 trillion in commercial sales annually, which constitutes one-third of global trade. Some 15 million jobs are directly linked to the trade relationship. Around 60% of US foreign direct investment flows into Europe – equal to €1.5 trillion - with more than €1.2 trillion invested in the US.
With these numbers in mind, nobody seems to contest that a trade agreement is necessary, urgent and achievable.
Remaining tariffs on goods are low (5% to 7% on average), but bringing them down to zero would increase EU-US trade by more than $120 billion (€94 billion) within five years and generate combined GDP gains of about $180 billion (€141 billion), according to a study by the US Chamber of Commerce.
Eliminating non–tariffs barriers will also make a significant contribution to boost trade and competitiveness on both sides of the Atlantic. A study by ECORYS that was commissioned by the European Commission showed that removing barriers could increase GDP by 0.7% in the EU and by 0.3% in the US.
Areas still in dispute are only about 1% to 2% of the total trade in goods and services, according to sources, but that small percentage on such a big trade volume remains a considerable amount.
These include EU restrictions on genetically modified food and US-produced chicken washed in chlorine; subsidies to the aircraft manufacturers Boeing and Airbus; US laws limiting maritime freight and airline ownership; restrictions on investment; and bidding for public procurement contracts.
Harmonising rules on emerging new technologies like cloud computing, nanotech, electric vehicles, ICT and internet services, green energy solutions, smart grids, data privacy and cyber security are at top of the agenda.
“Still, there is more to be done to deepen and broaden our ties. Particularly at this time, a bold initiative to expand trade and investment could make a significant contribution to our strategy to strengthen growth and create jobs,” EU and US leaders said in the statement.
After this first exploratory phase the negotiators are now supposed to invite stakeholders to present before the end of the year concrete proposals to address the impact on trade of regulatory differences.
"We are now entering the last leg of mapping out how we should tackle any eventual negotiation to boost growth and jobs through our trade partnership," said EU Trade Commissioner Karel De Gucht, who worked with US Trade Representative Ron Kirk in the High-Level working group.
"I look forward to continue working with my US counterpart to complete the final stage allowing us to present both leaders with the final report as quickly as possible.”