You could almost hear the sound of a collective breath being exhaled on the other side of the Atlantic tonight as President Barack Obama announced that the U.S. would open talks on a comprehensive trade agreement with the 27-nation European Union.
Whether the president would commit to the arduous negotiations in his State of the Union address had been the subject of much speculation after EU officials took the first step last week and invited the U.S. to the table.
Trade officials on both sides had been quietly laying the groundwork for the announcement over the past year, attempting to privately clear away some of the obstacles that have stymied EU-U.S. commercial relations for decades. The administration was leery of engaging in lengthy talks that could ultimately founder on a handful of seemingly intractable disagreements such as the EU’s near-ban on genetically modified foods or the U.S.’s limits on foreign shipping.
There is no guarantee of success, and reaching an agreement will be hard. Nonetheless, we are glad that Obama decided to go out on a limb. As Bloomberg View said in an editorial this week, freer trade with Europe would be all gravy for both sides. That certainly was the message the president sought to convey tonight: "We will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union -- because trade that is free and fair across the Atlantic supports millions of good-paying American jobs."
Perhaps Obama was emboldened to accept the EU's outstretched hand by a letter sent to the administration today by the leaders of the Senate Finance Committee. Chairman Max Baucus, a Montana Democrat, and the panel's top Republican, Orrin Hatch of Utah, said a free-trade deal with Europe is an “enticing opportunity,” if it meets certain conditions, including better market access for U.S. agricultural goods, stronger intellectual property protections and a dispute settlement mechanism.
As a sweetener, the senators said they would consider legislation that would give Obama so-called fast-track authority for the trade deal by limiting congressional debate and banning amendments.
Congress last enacted such legislation for expedited passage of trade agreements in 2002. The provision expired in 2007, a year before Obama was elected to his first term. Success this time would be a significant second-term legacy.
(Max Berley is a member of the Bloomberg View editorial board. E-mail him and follow him on Twitter.)