The US and EU are set to discuss a free-trade agreement. US President Obama and European Commission President Jose Manuel Barroso have both agreed to discuss an agreement, which is expected to “boost American exports, support American jobs and level the playing field in the growing markets of Asia”.
President Obama discussed the plan last night during his State of the Union Address. Both leaders have committed to work toward a stronger relationship that is expected to increase GDP growth by 0.5 percent per year.
As reported by BBC, the United States and the European Union hope to begin discussing a free-trade agreement this summer. Karel De Gucht, EU Trade Commissioner, has stated that the agreement would eliminate tariffs and standardize regulations and certifications.
President Obama believes the agreement would help create millions of jobs. The US and the EU both continue to recover from an economic crisis.
As reported by Reuters, negotiations are likely to focus on product regulations and standards. Agriculture, in particular, is expected to be a difficult point of discussion as the US and EU differ on standards for crops and livestock.
US agricultural standards allow animals to be fed with the ractopamine, which stimulates growth. In addition, many US crops are genetically modified. These modifications are restricted in the EU. If the free-trade agreement is to work, these issues must be discussed and compromised. Disagreement about agricultural standards continually stall free-trade discussion between the US and Canada.
If the US and the EU are able to overcome their differences and discuss free-trade, it could create a 0.5 percent economy boost for both.