Why EU-US free trade agreement would benefit both sides

As President Obama begins his second term, this is the right moment for the United States and the European Union to work together even more closely on a number of issues relevant to both their domestic and foreign policy agendas.

The most immediate way to boost our transatlantic relationship is to follow through on an EU-US free trade agreement. We came an important step closer with President Obama announcing in his State of the Union address last night the launch of direct talks between us to reach that goal. It was followed up by European Commission President José Manuel Barroso today giving a strong endorsement to these talks, saying "a future deal between the world's two most important economic powers will be a game-changer, giving a strong boost to our economies on both sides of the Atlantic."

Bringing down stubborn tariff and non-tariff barriers to trade and investment and aligning our regulatory frameworks while respecting our differences could do a great deal to promote growth and jobs on both sides of the Atlantic. The transatlantic economic relationship is still by far the most important relationship in the world, accounting for about half of the world’s GDP and almost a third of global trade flows. The US and Europe remain each other’s most important markets. 

By some estimates, an agreement eliminating tariffs and other barriers between us could increase annual economic growth by up to 1 percent on both sides of the Atlantic. That means jobs, and as Mr. Obama pointed out in his speech last night, "trade that is free and fair across the Atlantic supports millions of good-paying American jobs."

We badly need a free trade pact as both the EU and US continue to fight our way back from the financial crisis and face increased competition from a host of emerging economies. Now is the right time to look across the Atlantic and see how we can help each other. This would undoubtedly be a recovery booster.

Working toward a trade pact also recognizes that a more intense EU-US partnership can enhance the capacity of Europe and the US to deal more effectively with other regions of the world.

Reaching an ambitious economic agreement between us would send a powerful message to the rest of the world about our leadership in shaping global economic governance in line with our values.

The battle to promote free and open democratic principles and practices, as Europe and the US interpret them, is far from over and the attraction of undemocratic formulas of governance is a reality in many parts of the world. A free trade agreement not only serves European and US interests, it serves the interests of the world – and promotes democratic values.

Negotiating an agreement will not be easy. But this is a significant opportunity, and both the European Union and the United States should now make every effort to seize it.

João Vale de Almeida is the European Union ambassador to the United States.