MercoPress. South Atlantic News Agency

US and EU agree to begin talks on a trans-Atlantic economic and trade pact

Van Rompuy, Obama and Barroso at the White House (Photo AP)

The United States and European Union agreed on Monday to develop a plan to capitalize on already strong economic ties to create more jobs and fuel economic growth on both sides of the Atlantic.

“We must intensify our efforts to realize the untapped potential of transatlantic economic co-operation to generate new opportunities for jobs and growth, particularly in emerging sectors,” the two sides said in a joint statement.

“We are committed to making the EU-US trade and investment relationship -- already the largest and most integrated in the world -- stronger” they said after a White House meeting between President Barack Obama and European Commission President Jose Manuel Barroso and EU Council President Herman Van Rompuy.

Together, the United States and the EU account for about half of world economic output and nearly one-third of world trade. Two-way trade was up about 15% in the first nine months of 2011, despite a severe debt crisis in Europe that is crippling growth.

While countries around the world have been busily striking free trade deals for the past decade, the United States and the EU have steered clear of bilateral trade talks, partly because of concern it could sap energy from the long-running Doha round of world trade talks.

However, those negotiations will soon enter their 11th year with no clear end in sight.

The leaders' statement directed EU Trade Commissioner Karel De Gucht and US Trade Representative Ron Kirk to head a joint working group “to identify and assess options for strengthening the EU-US economic relationship, especially those that have the highest potential to support jobs and growth.”

They asked for a final recommendation by the end of 2012, with an interim report due in June. In addition to considering whether to eliminate remaining tariffs on each other's goods, the working group will examine how to reduce “behind the border,” or regulatory, measures that thwart trade.

The final report given to leaders next year “could include a range of possible initiatives, from enhanced regulatory cooperation to negotiation of one or more bilateral trade agreements,” a White House fact sheet said.

A private sector advisory group made up of top U.S. and EU companies had urged the leaders to consider negotiating a Trans-Atlantic Economic and Trade Pact.

The U.S. Chamber of Commerce also has called for a “Transatlantic Zero” initiative to eliminate remaining tariffs, which a study for the business group estimated could boost bilateral trade by 120 billion dollars within five years and create 180 billion in new economic growth.