By Sanford Reback
Nov. 9 (Bloomberg) — The European Union’s slide toward another recession and the Eurozone’s flirtation with dissolution shouldn’t disguise the bloc’s importance to the U.S. economy. The EU is the largest U.S. trading partner and the second-largest U.S. export market.
U.S. officials may now be hoping the EU can increase U.S. economic growth in the years ahead. Officials are expected to announce by year’s end that the two sides will start talks about a free-trade agreement.
The U.S. and EU always manage to make trade negotiations difficult. They’ve haggled over products ranging from Boeing airplanes to bananas to chicken. They’re arguing today over the EU requirement that U.S. airlines meet European carbon-reduction requirements on transatlantic flights.
But the promise of a trade agreement will be so tempting that the two sides will probably want to sit down for talks. Bloomberg Government analyst Ken Monahan estimates that eliminating tariffs would cut more than $6 billion a year in EU duties on U.S. exports. U.S. exports such as chemicals, jet engines and autos would become more competitive in the EU with products from other countries.
Getting a U.S.-EU deal done on tariffs may require resolving other issues such as privacy, agricultural subsidies, aircraft subsidies, to name a few, that continue to be irritants across the Atlantic. But negotiators may also decide that tariff reductions alone are sufficient if a larger trade deal proves elusive.
Sanford Reback has more than 20 years of policy, business and legal experience. As assistant general counsel of the Office of the U.S. Trade Representative, Executive Office of the President, he helped negotiate NAFTA as well as agreements with Japan and the European Union. As senior international counsel at MCI Inc., he served as the principal company advocate on international trade matters. Reback also has extensive experience in technology, having served as deputy general counsel for Policy at UUNET, then the largest Internet services provider in the world. He holds a B.A. in political science from Stanford University, a J.D. from Harvard Law School, a master’s degree from Harvard’s Kennedy School, and was a Fulbright Fellow at the Royal Institute of International Affairs in London.
Ken Monahan is an economic analyst with the Bloomberg Government trade team. He was an international economist and acting team lead in the Office of Trade Policy Analysis at the Commerce Department’s International Trade Administration. He holds a B.A. in economics from the University of New Hampshire, an M.A. in central and eastern European studies from Jagiellonian University in Krakow, Poland, and an M.A. in international relations from the Johns Hopkins School of Advanced International Studies. He was a Fulbright grant recipient in Vilnius, Lithuania.