EU’s De Gucht Seeks Green Light to Start U.S. Free Trade Talks

European Union Trade Commissioner Karel De Gucht asked for a mandate to negotiate a free trade accord with the U.S. that the EU says would add more than 86 billion euros ($112 billion) a year to the bloc’s economy.

EU governments must approve De Gucht’s request, the first formal step in the process for beginning negotiations on an agreement to broaden the world’s largest economic relationship.

“I hope they will quickly decide to open negotiations so that we can begin working ahead of the summer break,” De Gucht told reporters today in Strasbourg, France. “The sooner we begin, the sooner we can achieve an agreement that benefits all sides.”

A free-trade accord would remove tariffs, ease regulatory barriers and expand access in investment, services and public procurement, according to the EU, which predicts a deal will boost trans-Atlantic gross domestic product by between 0.5 percent and 1 percent. Investment and trade in goods and services between the U.S. and Europe amounted to $4.9 trillion in 2011, EU figures show.

While France has voiced concerns that the free-trade talks will affect agriculture and food safety and EU governments may take time to weigh the request to start discussions, De Gucht has said he expects to get the green light from the 27 member states. He will lead the EU negotiating team in the Brussels- based European Commission, the bloc’s executive arm.

“First of all, we will work to reduce remaining product tariffs -- currently at 4 percent on average -- to zero either immediately or over fixed time periods,” De Gucht said today. “Also we will seek ambitious market access in services and procurement.”

Non-Tariff Barriers

He also vowed to tackle non-tariff barriers to reduce red tape and extra costs for companies.

“The real challenge for both sides is to tackle the many behind-the-border barriers to trade that exist within regulations or domestic standards,” the commissioner said. “It’s simply human nature to think that your set of rules is the best.”

De Gucht said his goal is for negotiators to strike a “comprehensive” agreement before the end of the current commission’s term in late 2014. He cited the need “for both sides to have a pragmatic approach to tackle any difficulties.”

Talks with the EU may help President Barack Obama meet his goal of doubling exports by the end of 2014 as World Trade Organization negotiations stall and China expands its role internationally. Obama’s administration also plans to complete negotiations on the Trans-Pacific Partnership with 10 nations and buttress America’s role as a manufacturing center.

Political Will

The prospects of a broad EU-U.S. deal before 2015 depend on political will, De Gucht said.

“It all depends on whether or not both the EU and the U.S. are able to find far-reaching, but nevertheless pragmatic, compromises,” he said. ‘You need a number of political breakthroughs. Now, whether you can reach them or not is not a matter of time. It’s a matter of resolve.”

Former U.S. Trade Representative Ron Kirk said on Feb. 13 that “everything’s on the table across all sectors,” including agricultural issues and genetically modified products.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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