FIVE REASONS TO NEGOTIATE A TRANSATLANTIC FREE TRADE AGREEMENT....

...AND THREE ISSUES THAT MUST BE RESOLVED

I was in Madrid last weekend to speak at two  meetings .  

One was at the IE Business School, which has been rated by the Financial Times as the number One business school in Europe, and where my topic was the Irish economy and the euro.

The other meeting was at the Casa America. There the debate was about intensifying economic cooperation between the United States and the European Union, including the possibility of negotiating a formal EU/US Trade Agreement.

Other speakers at the latter event included the Spanish Minister for Foreign Affairs,    Jose Manuel Garcia Maragallo, the former Spanish Minister for Foreign Affairs, Ana Palacio, the US Ambassador to Spain, Alan Solomont ,  and the Irish Ambassador to Spain, Justin Harman

In my remarks, I identified six reasons why a Transatlantic Free Trade Agreement would be a  good idea

1. 15 million jobs  are already  dependent on transatlantic trade and investment , and eliminating the remaining barriers  to trade and investment could increase that number  of jobs and  could be worth  at least 200 billion euros in additional business
2. Negotiating such an agreement could be a lever for removing remaining inefficiencies on both    sides of the Atlantic and help both the EU and the US to compete better on world markets.
3. It would help restore global economic confidence after the recent failure of the  WTO Doha trade round negotiations
4. It would prevent the US shifting all its economic energies towards the Pacific  Basin, where it is already negotiating a comprehensive  agreement
5. A completed EU/US Trade Agreement would anchor the UK more firmly in the EU, because of the advantages it would bring, and counter the trend towards the UK leaving the EU altogether, which is gathering strength

I then identified three problems that have to be resolved, or taken into account, in such a negotiation.

1. While industrial tariffs between the US and the EU  are quite low and could be  eliminated without  too much  resistance by protectionist interests, the same cannot be said for Agriculture, where the US is increasingly protectionist, and the EU has a Common Agricultural Policy which  would be a barrier to some US  food exports to Europe
2. There are significant regulatory barriers to trade and investment. For example, the US protects its domestic  airlines from European  competition, insists that its government entities buy only  US  goods and services, and has different views and rules on hormones and GMOs in food products, and on data privacy, to those  in Europe
3. Any Agreement we negotiate should be open to others, for example to Mexico, Canada, Latin America and Africa so that it can evolve in into something that covers the  whole Atlantic basin, South as well as North. Seven of the ten fastest growing economies in the world today are in Africa.  It also should be compatible with the WTO.