Trans-Atlantic Trade and Investment Partnership
As we consider new trade accords with our biggest commercial partners, Europe calls out for attention. Indeed, the European Union is by far America’s largest international economic partner.
Further, while polls suggest many Americans have an ambivalent attitude toward trade agreements, a recent Pew poll found that Americans support increased trade with Europe by a healthy 58% to 28% margin.
With this in mind, the Chamber has been exploring proposals to harness the transatlantic economic relationship to generate jobs and growth. In 2010, the Chamber supported a study to gauge the potential benefits of eliminating tariffs between the United States and the European Union. While European and U.S. tariffs are often low, the sheer volume of transatlantic commerce is so large that one-third of all tariffs on U.S. exports to the world are paid to the EU.
The study found that eliminating transatlantic tariffs would boost U.S.-EU trade by more than $120 billion within five years. It would also generate GDP gains of $180 billion — a budget-neutral boost to the U.S. and EU economies.
Further, because one-third of transatlantic trade is intra-firm, it is clear that eliminating transatlantic tariffs would enhance the global competitiveness of U.S. and European companies on the world stage.
However, a tariffs-only approach is not enough. The Chamber has broadened its proposal for a Transatlantic Economic and Trade Pact to eliminate tariffs, ensure compatible regulatory regimes, and address investment, services, and procurement. The Chamber is calling for U.S. and EU leaders to commit to launching ambitious talks on this agenda by the end of 2012.
In contrast with some developing countries, the United States and the EU are committed to similar social, labor, and environmental standards. Concerns in these areas have made some recent trade agreements controversial but should not stand in the way of a transatlantic trade accord.
The global context is important as well. The EU has a free trade agreement with Mexico and is negotiating one with Canada. Does it make sense for tariffs and other trade barriers to remain in force on the third and largest leg of European-North American trade?
For too long, the United States has ignored the untapped potential of its ties to the world’s other economic colossus. For the sake of jobs and growth, it’s time to turn that around.
- Simply eliminating transatlantic tariffs would boost U.S.-EU trade by more than $120 billion and generate GDP gains of $180 billion within five years — a budget-neutral boost to the U.S. and EU economies.
- To seize those benefits and more, the United States and the European Union should pursue a Transatlantic Economic and Trade Pact to eliminate tariffs, ensure compatible regulatory regimes, and address investment, services, and procurement.
- U.S. and European leaders should commit to launching an ambitious trade and economic initiative by the end of the year.