In July 2013 the EU and the USA started negotiations to establish a Free Trade Area (Transatlantic Free Trade Area „TAFTA“ and Transatlantic Trade and Invest Partnership „TIPP“). TAFTA’s declared aim is to demolish remaining tolls and trade obstacles. Especially the food- and chemical industries, and service providers, are meant to profit from TAFTA. Both the EU and US economy are expected to see growth and new jobs.
TAFTA would create the world’s largest market with 800 million inhabitants. Two thirds of the world’s trade routes connect the US and the EU as it is. On a daily basis two billion Euros worth in goods are exchanged between the two participants already.
A study predicts, that the average income per citizen will raise by 4.7% and that 181,000 new jobs will be created in Germany. But, due to its already trong position in the export market, Germany's gain will only be average, compared to other nations. The average raise of income per citizen should be 5% EU-wide. The biggest winners will be the UK and the US, with a raise of 10% and 13% respectively. The US’s traditional non-EU trade-partners, on the other hand, are bound to lose. Canada, Mexico, and Japan are bound to lose between 6% and 9.5% in income.
At this point already, limitations are foreseeable which will not be eliminated through TAFTA. Either that, or they will be subject of heated discussions.
France, for example, successfully demanded that the cultural industry be exempt from TAFTA. Friction might arise in the food industry, since EU regulations on genetically groceries are much stricter than US regulations. And service providers, especially IT Service Providers, will have to watch Data Privacy regulations very closely. Once again, in this field EU regulations are stricter than US regulations. Lobbyists in the US, on the other hand, seem to push for a protection of the US car industry and the „Buy American Act“. This Law, enacted in 1933, forces the US public service to prefer US companies when handing out work contracts (i.e. highway maintenance or civil engineering).
In general it can be expected that the US delegation is more flexible than its EU counterpart. While the eventual TAFTA contract only has to pass Congress in the US, both the EU Parliament and every EU member-state have to approve on the European side. Both the Obama administration and the EU are bound to have a high interest in getting TAFTA in place though. For President Obama time is running out, with his second and last term, ending in 2016. And the EU will want to provide its struggling southern economies new opportunities for trade.
It remains to be seen, whether or not transatlantic trade will be promoted and trade obstacles demolished be TAFTA.