After years of trade disputes, US and European Union officials are considering a drastic change in direction: a US-EU trade pact. It would be the world’s largest trade agreement, and could give a significant boost to both struggling economies.
Negotiations are still in the preliminary stages, and both sides will have much to overcome — including differences on agriculture, food safety, and climate change legislation — but top EU and US officials insist they want to see the pact happen. Even America’s main labor group, the AFL-CIO, which usually opposes such trade pacts, said it wouldn’t interfere with this one. Secretary of State Hillary Clinton also appears to be in support of the trade agreement:
If we get this right, an agreement that opens markets and liberalizes trade would shore up our global competitiveness for the next century, creating jobs and generating hundreds of billions of dollars for our economies.
Labor unions in the States have tried to discourage huge trade agreements ever since the politically fraught debate over the passing of NAFTA in 1991, arguing that starkly lower wages and lax environmental regulations in certain countries would place American workers at a competitive disadvantage. Those issues don’t seem as pressing in deals with the EU.
Big business in the US appears to give similar support.
However, negotiators do not have an easy path ahead. The most recent dispute concerns EU’s carbon trading scheme, which could penalize American airlines that don’t meet EU standards. Intellectual property laws and food safety regulations also differ broadly across the Atlantic, as do agricultural restrictions on the use of genetically modified foods in Europe.
Enthusiasm seems to be the most common factor across these economies right now. Where do you think these negotiations will lead?