The long-discussed free trade agreement between the United States and the European Union was formally endorsed by President Barack Obama in his State of the Union address to Congress. Obama asserted that “trade that is fair and free across the Atlantic supports millions of good-paying American jobs.” A prominent presidential endorsement will not prevent a long and disputatious negotiation, but a trade pact could yield potentially huge economic rewards — and also provoke serious political opposition on both sides.
A U.S.-EU trade and investment agreement has been talked about for two decades but never actively pursued. On both sides of the Atlantic, there has been fear that any such deal between the world’s two largest economies would disadvantage poorer nations. A U.S.-EU accord was deemed less desirable because greater economic benefits could be gained from a global trade agreement involving more countries. Trade experts worried that it would undermine the legitimacy of the World Trade Organization. Moreover, based on past bitter disputes over frozen chickens, bananas, genetically modified organisms and other food and agricultural products, a U.S.-European Union agreement was deemed too politically fraught and difficult.
Now, with Europe in recession, the United States unemployment rate stubbornly high and both regions groaning under public indebtedness, Brussels and Washington are looking for ways to stimulate jobs and growth without spending money. Liberalization of trade and investment is seen as one way to do that.
In addition, in the wake of the failed Doha Round of multilateral trade negotiations, a U.S.-EU deal is thought to pose little immediate threat to the WTO because there is no comprehensive global trade deal in the offing any time soon. Moreover, the rising competitive challenge from China has increased the incentive for both Europe and America to develop common technical and regulatory standards for a $30 trillion transatlantic market to ensure that Western-style capitalism, not Chinese state capitalism, remains the global norm.
Publics on both sides of the Atlantic appear to be receptive to the idea.
The virulent European anti-Americanism of the last decade — owing to European opposition to the Iraq war and the policies of U.S. President George W. Bush — is ancient history. More than two-thirds (69 percent) of the French had a favorable view of the United States in 2012, compared with 42 percent in 2008, the last year of the Bush administration, according to Pew Research Center surveys. Fifty-two percent of Germans held a positive opinion of America, compared with 31 percent four years earlier. And 58 percent of the Spanish were favorably disposed toward the United States, much greater than the 33 percent who held such views in 2008.