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A possible free trade agreement between the 28-member European Union and the USA has been mooted for a number of years, but also mired in disagreements between the two parties. By now, however, at a time when governments are desperate to salvage jobs and get out of recession, there are indications of substantive moves towards negotiating a far-reaching deal covering trade and investment.

At the EU-US Summit in November 2011, a High-Level Working Group on Jobs and Growth was launched as a forum to discuss how they could further integrate their trade relationship, with the option of launching an FTA. Enthusiasm to commence negotiations on such an agreement has seemed higher among EU politicians than in the US, where a response has been somewhat muted.

According to a June 2012 Interim Report to Leaders from the Co-Chairs of the High Level Working Group, such talks should seek to conclude a proposal for a comprehensive transatlantic agreement including chapters on intellectual property, services, investment, procurement, regulatory issues and non-tariff barriers, including an SPS-plus chapter (sanitary and phytosanitary measures) and a TBT-plus chapter (technical barriers to trade), and tariffs.

In November 2012, the TransAtlantic Business Dialogue (now TransAtlantic Business Council), a coalition of CEOs from US and European businesses, mainly transnational corporations, co-signed a letter to EU and US leaders urging a “quick launch of negotiations toward an ambitious and comprehensive transatlantic trade and investment agreement”.

In December 2012, a coalition of 60 US food and agricultural organisations sent a letter to the office of the US Trade Representative urging that agriculture be included in the agreement and pushing back at EU regulatory measures on genetically modified crop approval and labels, and the use of pesticides, for example.

As of early 2013, European leaders are getting more and more vocal about the need to get negotiations started.

If concluded, the Transatlantic Trade and Investment Partnership would be the world’s biggest FTA. According to the European Commission, the EU and US economies account together for around half the entire world GDP and for nearly a third of world trade flows. Total US investment in the EU is three times higher than in all of Asia. EU investment in the US is around eight times the amount of EU investment in India and China together. Approximately a third of transatlantic trade is estimated to consist of intra-company transfers.

January 2013

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