Tax-News.com, New York | 24 May 2012
Kirk looks at future of US-EU trade relations
by Leroy Baker
After, earlier this month, the European Commissioner for Trade Karel De Gucht had foreseen the possibility of a comprehensive free trade agreement (FTA) between the United States and the European Union in 2014, the US Trade Representative Ron Kirk provided his view on US-EU trade policy during a recent speech in London.
He started his remarks to the London School of Economics and Political Science by reminding his audience of the “unprecedented" scale of the US-EU trade relationship. "In fact, transatlantic trade in goods and services totalled nearly one trillion dollars last year, while US foreign direct investment in the EU was worth nearly two trillion dollars in 2010, and similarly, one and a half trillion dollars flowed from the EU (to the US)," he said.
Kirk pointed out that a recognition of the US-EU trading relationship prompted President Obama and European Presidents Barroso and Van Rompuy, to create the High Level Working Group on Jobs and Growth last November. "Our leaders tasked De Gucht and myself to examine, with an unprecedented degree of rigour and cooperation, all of the available options for increasing our economic growth, jobs, and international competitiveness,” he noted.
“Right now,” he confirmed, “American and European teams are working together to examine a wide range of possibilities, including: eliminating conventional barriers to trade in goods, such as tariffs and tariff-rate quotas; reducing barriers to trade in services, and to transatlantic investment; promoting regulatory approaches that facilitate trade; reducing, eliminating, or preventing in the first place behind-the-border barriers to trade in all categories; and developing rules and principles on other global issues that are of common concern.”
“In each of these areas,” he added, “US and EU teams are assessing the potential economic value, the feasibility, as well as the international implications of further liberalization. We have agreed to be both ambitious and realistic as we establish our negotiating parameters and goals.”
“From the US perspective, an ambitious transatlantic negotiation – were we to pursue that course – would need to achieve full liberalization of market access for all categories of goods, and expand transatlantic flows of services and investment. The US also believes an ambitious approach should identify new approaches to non-tariff barriers.”
However, he concluded, the US understands the need for "realism" in any comprehensive negotiation. "Many in Europe have already voiced support for a comprehensive FTA pursued as a single undertaking," he observed. "While the US agrees that this approach presents many exciting opportunities, we want to ensure that its outcomes could be at least as broad and ambitious as those contained in existing US FTAs.”
“Neither the US nor the EU can afford to leap into open-ended negotiations on faith alone," he added. "Our mutual, urgent needs to enhance growth and employment compel us to identify a reasonably short path to success before we launch negotiations. If the Working Group’s analysis determines that the most ambitious outcomes are not likely to be achieved through full-fledged trade negotiations at this time, then the US will be ready to explore how the US and the EU could reach agreements in areas where we have shared ambitions.”