US President Obama used his State of the Union address this week to kick start negotiations for an EU-US Transatlantic Partnership, likely to provide a much needed boost to the two leading global economies. Citing job creation and a boost to American exports, the US President declared “trade that is fair and free across the Atlantic supports millions of good-paying American jobs”.
In a joint statement US President Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso announced that both trading blocs will initiate the internal procedures necessary to launch negotiations.
Prime Minister David Cameron welcomed the US President’s determination to begin negotiations and hailed the commitment in the EU and the US to reach an agreement. In a statement he affirmed that “an EU-US trade deal will create jobs on both sides of the Atlantic and make our countries more prosperous”.
The importance of such a deal can not be emphasised enough. Together the EU and the US account for about half of world GDP (47%) and about a third of global trade flows. The EU economy is worth €12.6 trillion and the US economy €11.5 trillion (by comparison China’s is worth €5.5 trillion and Japan’s €2.7 trillion) Each day goods and services of almost €2 billion are traded bilaterally. With deep economic ties between the two economic blocs, with aggregate stocks in excess of €2 trillion, the relationship between both the EU and the US is of global significance and any trade agreement between the two is likely to have global ramifications – not least when you consider the likely affect of aligning rules and technical product standards, which anyone who will want to do business with this transatlantic “economic NATO” will have to abide by.
A 0.5% increase in GDP in the EU, the equivalent of €86 billion in annual income to the European economy is the much sought after gain this agreement promises to deliver. Prime Minister David Cameron speaking recently at the Davos summit suggested that the agreement has the potential to create an additional two million jobs across the European Union.
The agreement will focus on market access, regulatory issues and non-tariff barriers as well as rules, principals and more generally on global themes likely to have far reaching influence on the global trading system such as a closer alignment on intellectual property protection and enforcement mechanisms.
The removal of restrictive barriers is the central goal of the agreement. Improvements in services, investment and public procurement also form the basis of the desired outcomes of the trade deal.
Both sides have also highlighted the need for reform of the less obvious but no less costly barriers to trade, the differences between the two markets in areas of compliance and safety. The reduction of these aptly named “behind the border” obstacles, whilst maintaining consumer confidence in health, safety and environmental protection, will prove the most challenging, but also potentially the most rewarding element of the agreement.
As if the prospect of this trade deal was not enough to remind us how significant being a member of the EU can be in trade terms, a recent Defra report came to underline how important for British exports our membership of the EU is. The report highlighted that the UK exports more food to Belgium than to Brazil,Russia, India, China and Mexico put together. In fact the UK exports the most, by a significant margin, food to Ireland (£2,692m), followed by France (£1,925m), the US (£1,239m), Germany (£1,032m) and Spain (£963m). The food industry, worth £85 billion to the UK economy and employing 3.5 million people, has much to lose from a British exit from the EU – not least from the restoration of preventative trade barriers with its leading export sources, but potentially denying the UK the opportunity to utilise the EU-US trade agreement to bolster its exports to the US.
With fresh consternation following David Cameron’s speech on the European Union, coming from both at home, across the EU and even the White House, the importance of Britain’s membership of the EU has become a national question.
Following the launch of negotiations to establish an EU-US trade agreement, it seems the question for the UK becomes simpler still. Do we want to leave our main export market, just as it promises to become the platform for the biggest global deal between the world’s two biggest economies?
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About: European Movement UK
The origins of the European Movement
The origins of the European Movement lie in the aftermath of the Second World War. More than eight hundred delegates from across Europe gathered in The Hague in May 1948, under the chairmanship of Sir Winston Churchill, to create a new international movement to unite Europe and prevent further wars between its members. The British section of the European Movement was founded a year later.
In the 1950s and 1960s, the European Movement put forward the arguments for joining the European Economic Community, and it ran a major campaign in the early 1970s, both among the general public and in parliament, to win the battle for entry. In 1975, during the referendum on membership, the European Movement played a central role in the YES campaign. Other campaigns since then have included pressing for direct elections to the European Parliament in the 1970s and promoting the benefits of the single market in the run-up to 1992.
During the 1990s, the organisation became revitalised around the need to create a new national pro-European coalition. The rise in anti-European feeling threatens to undermine Britain's place in the European Union; our exclusion from the first wave of countries joining the euro is an example of how we lose out when the pro-European case is not put strongly enough in public.
Aims and activities
The European Movement is
- A rallying point: The European Movement rallies all those who believe that European unity is vital where the peoples of Europe have interests in common such as increased trade to improve economic prosperity, an improved environment to tackle climate change, and action to combat global poverty. A politically united Europe is needed to sweep aside the petty tribalism that has historically, at the very least, been an obstacle to progress or, at its worst, has led to bitter conflict and a catastrophic loss of human life. Europe must be united as a region of law, justice and democracy, equipped with the institutions capable of achieving these ends. Members receive a regular newsletter, euromove, with information and news about Pro-European developments. In addition, the office publishes updates on campaign ideas and issues an e-mail newsletter, e-News. Members take part in lively discussions in person and online, and the European Movement maintains an informative website.
- A campaign: The Movement has since its creation in 1948 sought to build and maintain public support for the unity of Europe. In the face of a backward-looking nationalist resurgence in some quarters, this role is as vital as ever. The campaigns include public information points, working with the media, and lobbying MPs and other decision-makers. In addition to the work of the London office, the branches and national councils organise campaign activities in their own areas, as well as political discussions and social events for members.
- A pressure group: The creation of the European Union has been an extraordinary achievement - democratic, sovereign states have created a common institutional framework in order to forge a future together based on the rule of law. But the European Movement is not the Union's information service or an apologist for its weaknesses. It must work to win support for the reforms necessary to improve its ability to meet the hopes and aspirations of its peoples.