ASSESSMENTS

Problems Surround the EU-U.S. Free Trade Negotiations

Jun 20, 2013 | 07:00 GMT

Problems Surround the EU-U.S. Free Trade Agreement
A European flag stands between two U.S. flags in Lisbon.

(RAFA RIVAS/AFP/Getty Images)

Summary

The problems surrounding upcoming EU-U.S. free trade negotiations epitomize Europe's enduring dilemma: The national interests of the bloc's various members will make it difficult to form a unified stance. Europe's economic crisis and its declining population have forced EU leaders to try to promote domestic economic growth by exporting to non-European markets. Given the European Union's historical and cultural links with the United States, targeting the U.S. market with a free trade agreement is a logical move.

For its part, the United States hopes to benefit from such an agreement, which likely would narrow Washington's trade deficit with Europe and boost U.S. exports. And the fact that all EU members are willing to enter negotiations with the United States shows that they, too, understand the potential benefits of a free trade agreement. However, the bloc is divided on the terms of the agreement because not all members would profit from it equally.

On June 14, members of the European Union officially gave the EU Commission the mandate to negotiate a free trade agreement with the United States on their behalf. Formal negotiations begin in July, and both sides want to complete negotiations before the end of 2014. The United States and the European Union already have a fairly robust economic relationship. They are the world's two largest economies; they constitute 40 percent of the world's economic output; they have the world's largest bilateral economic relationship, which accounts for roughly 33 percent of global trade; and the United States is the European Union's largest source of and destination for foreign direct investment....

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