The world’s biggest free-trade zone

An “economic NATO” has been proposed before, but President Obama is the first leader to give it such an unequivocal endorsement.

All of Europe is fixated on just one line in Barack Obama’s State of the Union speech, said Martina Kovacova in Sme.sk (Slovakia). “Tonight I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union because trade that is free and fair across the Atlantic supports millions of good-paying American jobs,” the president said. Such an “economic NATO,” which would be the largest free-trade zone on the planet, has been proposed by both sides before, but never before has a leader given it such an unequivocal endorsement. “Translated from diplomatic parlance,” the announcement that negotiations will begin means that they are already underway and “cannot end in anything other than an agreement.” Obama said the pact should be concluded within two years, and European leaders immediately agreed.

What’s not to like here? asked The Economist. Trade between the two economic giants amounts to nearly $1 trillion each year. With that kind of volume, scrapping already low bilateral tariffs could raise Europe’s GDP by around 0.4 percent and that of the U.S. by a percentage point. Just think how much “Europe’s austerity-blighted economies could gain from more demand from abroad.” Sure, it’s going to be tough to persuade some of the entrenched lobbies on both sides. Farmers, for example, “will block anything.” The U.S. loves its special “buy American” rules for government procurements, while the French are passionate about protecting their locally specific brands, like Roquefort and Champagne.

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