US hopes to finish Europe trade deal in two years

Business groups and U.S. trade officials are optimistic that a comprehensive trade agreement with the European Union can be completed within the next two years.

Negotiators on both sides of the Atlantic said the talks would seek the elimination of all duties, greater market access for goods and services and better cohesion on regulations.

{mosads}President Obama joined European Union leaders Wednesday to officially launch talks he announced during his State of the Union address.

“We, the leaders of the United States and the European Union, are pleased to announce that … the United States and the European Union will each initiate the internal procedures necessary to launch negotiations on a Transatlantic Trade and Investment Partnership,” Obama said in a joint statement with European Council President Herman Van Rompuy and European Commission President José Manuel Barroso.

Michael Froman, the White House’s top trade expert, told reporters a U.S.-EU deal would potentially be “very big,” while U.S. Trade Representative Ron Kirk hailed the announcement, which came after more than a year of intense talks, as an ambitious effort to “expand the deepest economic partnership in the world.”

Up until now, there have been issues that have tripped up the trading partners’ ability to even start talks on a trade deal. And many are skeptical about the countries’ ability to complete the talks.

Froman on Wednesday argued the two sides have clearly identified the tough issues, and he insisted “stars could well be aligned” for creating a $5 trillion trans-Atlantic free-trade zone.

Froman and Kirk said there is political will on both sides to hammer out an agreement, and they argued a deal would set new global standards on trade, raising the bar for future deals.

The first set of negotiations will come in June, according to Peter Chase, vice president of the U.S. Chamber of Commerce
’s Europe division.

“There are major obstacles to getting it done … but a lot of those differences can be overcome,” he insisted.

The announcement had been expected after European Union officials visited the White House and U.S. Chamber of Commerce last week; Vice President Biden discussed a deal with British and other European leaders during a four-day trip that finished up in London last week.

The combined U.S. and EU economies are the largest in the world, accounting for 45 percent of the world’s gross domestic product and nearly 40 percent in terms of purchasing power, according to the Business Roundtable.

“Ambitious U.S.-EU negotiations will strengthen transatlantic economic relations and reinforce the open market and rules-based principles of the global trading system,” said Doug Oberhelman, chairman and CEO of Caterpillar and chairman of the Business Roundtable’s International Engagement Committee.

Lawmakers in both parties have expressed support for the talks.

“A strong, comprehensive trade and investment agreement with the EU has the potential to create significant good-paying jobs for American workers,” House Ways and Means Committee Chairman Dave Camp (R-Mich.) said in a statement. “Negotiations will not be easy, but they have enormous potential to open new opportunities for us to sell our goods and services in the EU. I welcome the President’s movement forward on this effort and look forward to consulting closely with the administration.”

House Ways and Means Committee ranking member Sandy Levin (D-Mich.) also backed the push.

“These negotiations provide a rare opportunity to expand U.S. exports of goods and services by eliminating tariff and, especially, non-tariff barriers in Europe, our second largest export market after Canada,” Levin said.

Agriculture will be one of the most sensitive issues in the talks, and Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Sen. Orrin Hatch (R-Utah) on Tuesday told Kirk to push for greater access for U.S. agricultural and services exports.

The two also called for greater protections for U.S. intellectual property, and for a dispute settlement mechanism.

A U.S.-EU deal would help Obama meet his goal, set in 2010, of doubling exports by 2015. That goal is being hampered by financial crises in Europe and slower economic growth in the Asia-Pacific region.

The United States and the EU already maintain a total of nearly $4 trillion in investment in each other’s economies, supporting nearly seven million jobs.