Just as EU and US leaders have agreed to a new transatlantic economic partnership, Barbara Böttcher and Klaus Deutsch of Deutsche Bank provide recommendations on how the two economic giants can deepen economic co-operation.
A new research paper claims that transatlantic political co-operation on economic issues has fallen far behind the reality of economic ties that bind the EU and the US, and that much more economic harmonisation is possible.
The report highlights that trade barriers often still constitute an effective blockade on imports, both in EU member states and individual US states. Though there should be no EU-US free trade area, the report argues that a new regulatory approach is required, involving the harmonisation or mutual recognition of domestic standards on consumer, investor and environmental protection.
Böttcher and Deutsch argue that for bilateral barriers to trade to be removed quickly, trust and mutual recognition of domestic standards are more important than market liberalisation. Thus, they call for a clear timetable for such recognition to be put in place as soon as possible, as well as a reinforcement of the political pillars of transatlantic economic integration, which will require greater parliamentary involvement.
Key areas in which there is enormous potential for deeper EU-US relations include financial services, with a single market a realistic goal, according to the report. Meanwhile, the authors insist that opportunities for joint research abound in many spheres of activity, including the energy industry, particularly in renewables.
The report argues that further convergence of accounting standards, intellectual property rights and patent law is required and that the legal framework for R&D collaboration in SMEs needs improving. Meanwhile, the authors claim regulations on corporate governance, takeovers and merger control are not serious barriers to transatlantic investment.