Keywords: transatlantic free trade agreement, President Obama, US-EU trade negotiations, US-EU High Level Working Group on Jobs and Growth,

During his State of the Union address, President Obama announced the administration's decision to launch formal US-EU trade negotiations, based on the recommendation of the US-EU High Level Working Group on Jobs and Growth (HLWG). Companies with transatlantic businesses interests should quickly identify trade and regulatory priorities in order to use the upcoming negotiations to reduce or eliminate trade barriers, such as by seeking changes to standards, to create a more favorable business climate.   

Since November 2011, the HLWG has been analyzing policies and measures to increase EU–US trade and investment. In a report released on February 11, 2013, the HLWG announced its conclusion that a comprehensive trade agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and that contributes to the development of global standards and rules, would yield the greatest result. 

A transatlantic free trade agreement (FTA) would have a tremendous economic impact. Europe is already the United States' largest economic partner, with more than $600 billion in annual trade (compared to American trade with China of about $500 billion). A transatlantic FTA would create the largest free trade area in the world, covering approximately 40 percent of global commerce, and could generate more than $5 trillion in trade, investment and sales. According to a study by the US Chamber of Commerce "eliminating these tariffs [in a transatlantic FTA] would boost two-way trade by $120 billion within five years" and add $180 billion to the new bloc's combined GDP.1

The agreement will be "comprehensive" and will open further transatlantic trade in goods and services by reducing tariffs and eliminating non-tariff trade barriers. Moreover, both parties also intend to harmonize standards and regulations, open public procurement markets, increase the protection of investments and intellectual property, and enhance regulatory cooperation and standards convergence. The United States and the European Union will be seeking input from the private sector on top priorities for the negotiations. 

Companies should begin work immediately to identify:

  • Key products or services that are, or could be, traded;
  • Specific regulatory policies, standards, or practices that affect transatlantic trade; and
  • Areas where greater cooperation between the United States and the European Union would increase business opportunities.

A number of mechanisms exist to communicate these priorities to the teams of US and EU experts who will be negotiating the agreement, but it is critical to convey this information early to ensure inclusion in the scope of the negotiations.

Originally published February 19, 2013

Footnote

1 US Chamber of Commerce, "Transatlantic Economic and Trade Pact."

Learn more about our International Trade and Government Relations practices.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.