David Cameron has announced that the EU and the USA are starting formal negotiations on a trade deal which could be finalised by the end of next year. The announcement was made as world leaders are gathering for a G8 meeting in Northern Ireland and the first round of formal discussions will be held in Washington next month.
If it comes to fruition, the deal would be the biggest trade deal in world history worth £100 billion to the EU, £80 billion to the USA and an estimated £85 billion to the rest of the world. Mr Cameron said “this is a once-in-a-generation prize and we are determined to seize it”. He claimed that the deal should lead to greater choice and lower prices in the shops and that it could create two million jobs. The UK has the second largest EU economy after Germany and so should be a major beneficiary from the putative trade deal. Mr Cameron has promised the British people an “in-out” vote on Britain’s continuing membership of the EU by 2017 should the Conservatives form the next government.
Much hard negotiation and compromise will be needed if the final deal is to be incorporated; for instance, the French were adamant that media and television industries should be excluded from the deal as a precondition to agreeing to the discussions. The EU intends that the accord should bring down remaining US-European tariffs (which are already relatively low) and harmonise certifications and technical regulations. The aim is to simplify and boost bilateral trade.
Speaking of the fledgling deal, President Obama said; "we will find convincing answers to legitimate concerns. We'll find solutions to thorny issues, we'll keep our eyes on the prize and we will succeed". He noted that integrating the US and EU economies was going to be a challenge.