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NAM president calls for study of a transatlantic free trade area

National Association Of Manufacturers (US) | October 21, 2008

NAM President Calls For Study Of A Transatlantic Free Trade Area


Calls For In-Depth Study Of New Pact

LEUVEN, Belgium, October 21, 2008 — National Association of Manufacturers (NAM) President John Engler today called for in-depth study of a "Transatlantic Free Trade Area" between either the European Union (EU) and the United States or the EU and the North American Free Trade Agreement (NAFTA) nations.

In an address today to Voka, the Flanders Chamber of Commerce and Industry, Engler said that despite the rise of China, India and other emerging economies, the U.S. and EU together account for 56 percent of Gross World Product. "This gives us tremendous clout, but also tremendous responsibility," he said. "The time has come when we should give serious thought to the Transatlantic Free Trade Area.

"If we were to have such a huge free trade area, a real integrated transatlantic marketplace, it could well be a magnet for other countries wanting to join," Engler said. "We could set a high standard for totally free and open trade and invite others if they agree to our high standard."

Engler pointed out that one third of tariffs on U.S. exports to the world are paid to the EU, even though most rates are low. "A Transatlantic Free Trade Area could make a lot of sense," Engler said. "In the U.S., we already have free trade with Canada and Mexico, and the EU already has a free trade agreement with Mexico. And, I understand the EU and Canada agreed at their Summit meeting last week in Montreal to launch negotiations on a Canada/EU free trade agreement."

Engler emphasized that the NAM continues to actively pursue an "ambitious, market-opening Doha round agreement," but acknowledged little chance it will be achieved this year. "The reluctance of countries like India, China and to a lesser extent, Brazil, to contribute to a comprehensive, market-opening trade deal concerns me because they themselves are very substantial markets, and they are also increasingly substantial exporters."

Engler said that "it has become more difficult for countries like the United States to accept this growing flow of products without reciprocity. We continue to feel that the (Doha) negotiations must achieve sufficient ambition in terms of improving market access for manufactured goods, especially in the fast-growing advanced developing countries." He said it is still possible to overcome resistance through use of sectorals — negotiations focused on specific industrial sectors — "but we must get past agriculture."

Engler said the NAM does not regard last summer’s failure of the July World Trade Organization (WTO) Ministerial to be the end of the Doha Round or the death of the WTO. "The Kennedy Round of the General Agreement on Tariffs and Trade in the 1960s took four years," he said. "The Tokyo round took six years. The Uruguay Round of the 80s and 90s took eight years. No one should be surprised if the Doha Round — the most difficult yet — would take 10 years."

"Rather than spell the WTO’s doom, as some might warn, a U.S. - EU agreement could jog the rest of the world into realizing that they will be left behind unless they adopt a pro-liberalization attitude and press for quicker negotiations in the WTO," Engler said.

As a first step to a possible Transatlantic FTR, Engler vowed to work with NAM’s European counterpart BUSINESSEUROPE and business leaders on both sides of the Atlantic to review the concept carefully. He said NAM would also press European and U.S. business leaders to actively consider negotiation of a Transatlantic Free Trade Area. "We must not allow a financial crisis or unfounded political accusations to frighten us into inaction," he said. "Let’s instead find what benefit we can in these difficulties, including a renewed appreciation of manufacturing’s role in creating prosperity for our citizens."

The full text of Engler’s address can be accessed at:

The National Association of Manufacturers is the nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in Washington, D.C., the NAM has 11 additional offices across the country.