As developed world struggles, talk of a U.S.-E.U. trade deal intensifies

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http://www.washingtonpost.com/business/economy/as-developed-world-struggles-talk-of-a-us-eu-trade-deal-intensifies/2012/12/11/9a79388a-43d4-11e2-8061-253bccfc7532_story.html


Pete Souza/OFFICIAL WHITE HOUSE PHOTO - President Barack Obama participates in a G8 Summit working session focused on global and economic issues at Camp David in May.

The United States and Europe have flirted for years with the idea of taking the world’s largest trade relationship to the next level. With growth lagging on both sides of the Atlantic, the concept is getting a fresh look.

In coming weeks, a joint White House-European Union committee is due to report on whether it is politically realistic to try to create a massive U.S.-E.U. free-trade bloc — pulling half the world’s economic output into a zone of lowered tariffs and coordinated regulation.

By lowering costs for business, reducing import duties and further opening markets on both sides of the Atlantic, supporters say the benefits could be substantial — adding close to a full percentage point to the 27-nation European Union’s gross domestic product, or about $150 billion. A study by Sweden’s National Board of Trade said trade between the two sides could jump 20 percent — upward of $200 billion annually — if an aggressive agreement were enacted, and perhaps far more than that.

The allure for both sides is clear. Unemployment remains high — historically so in Europe — and both the European Union and the United States are trying to boost exports as a way to improve their economies. U.S. exports fell from October to September, the federal government reported on Tuesday, and are up just 4.5 percent this year compared with last — a poor showing for an Obama administration that promised to double U.S. sales abroad.