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EU and U.S. Leaders Push Transatlantic Trade at the G8 Summit

Photo of US/EU flags shaking hands

On Monday at the G8 Summit, President Obama, U.K. Prime Minister Cameron, European Commission President Barroso, and European Council President Van Rompuy announced plans to launch negotiations for an ambitious trade deal between the European Union and the United States. The Transatlantic Trade and Investment Partnership (T-TIP) is an ambitious, comprehensive, and high-standard trade and investment agreement that promises to boost worldwide economic growth. During the negotiation announcement, Prime Minister Cameron said a successful deal could add £100 billion ($157 billion) to the EU economy, £80 billion ($125 billion) to the U.S. economy, and as much as £85 billion ($133 billion) to the rest of the world. While these numbers are impressive, as ITIF’s March 2013 report, Estimating the Benefits of a Transatlantic Trade Partnership found, citing data from the U.S. Chamber of Commerce, gains could be as high as $450 billion for the United States and $495 billion for the Europe Union, boosting both EU and US GDP by 3 percent.  “We’re talking about what could be the biggest bilateral trade deal in history; a deal that will have a greater impact than all the other trade deals on the table put together,” the Prime Minister said.

In particular, the T-TIP aims to further open EU markets, strengthen rules-based investment to further grow the investment relationship between the European Union and the United States, eliminate all tariffs on trade, reduce non-tariff barriers that impede the flow of goods, increase market access for trade in services, cut the cost of differences in regulations and standards between the European Union and the United States, develop cooperation on issues of global concern including intellectual property and localization barriers to trade, and promote the global competitiveness of SMEs.

The first round of negotiations will begin the week of July 8 in Washington, D.C. Given that the Doha Round of the WTO is now entering its twelfth year of talks, this is a major step forward for global free trade. Correspondingly, President Obama noted that the T-TIP will be a priority of his administration, but cautioned that negotiations might be difficult, “There are going to be sensitivities on both sides.  There are going to be politics on both sides.  But if we can look beyond the narrow concerns to stay focused on the big picture—the economic and strategic importance of this partnership—I’m hopeful we can achieve the kind of high-standard, comprehensive agreement that the global trading system is looking to us to develop.”

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