EU, U.S. agree to free-trade talks at G-8

The European Union and the United States will open negotiations next month on a long-sought deal to create free trade between the world’s two mightiest economic regions, an effort designed to create millions of jobs that could take years to transform from dream to reality.

EU and U.S. leaders announced the plans Monday at the start of the G-8 summit of wealthy nations in Northern Ireland.

“America and Europe have done extraordinary things before and I believe we can forge an economic alliance as strong as our diplomatic and security alliances, which, of course, are the most powerful in history,” U.S. President Barack Obama declared alongside EU leaders and the British host, Prime Minister David Cameron.

At stake is a vision of boosting the value of trans-Atlantic trade in goods and services that Obama said already exceeds $1 trillion annually, as well as $4 trillion annually in investment in each other’s economies.

EU and U.S. officials agreed at the start of the Group of Eight summit that these already colossal trade figures could be much higher if only both sides agreed to dismantle high tariff walls and bureaucratic hurdles that undermine the export of many products.

“The whole point is to fire up our economies and drive growth and prosperity around the world — and there is no more powerful way to achieve that than by boosting trade,” Cameron said.

Cameron said a tariff- and barrier-free trade environment could generate an extra $150 billion annually for the 27-nation European Union, perhaps $120 billion for the United States, and provide a similar growth jolt for the rest of the world.

The British leader said these figures would mean, in practical terms, “2 million extra jobs, more choice and lower prices in our shops. We’re talking about what could be the biggest bilateral trade deal in history. … This is a once-in-a-generation prize, and we are determined to seize it.”

A White House statement said the EU-U.S. talks could start the week of July 8. Both sides hope to reach agreement by late 2014.

Yet the French government of President Francois Hollande has already illustrated the many speed bumps on the road to such a deal as each nation seeks to preserve tariff barriers and other shields of red tape for its own potentially uncompetitive industries.

When discussing its negotiating position Friday before meeting Obama, European Union chiefs gave France an advance concession that its state-subsidized TV and movie industry would not be cut adrift to compete directly with Hollywood. At least, not yet.

The head of the EU’s executive arm, European Commission President Jose Manuel Barroso, stressed that the negotiations would repeatedly confront such issues and each nation would have to be persuaded that a level playing field was in everyone’s long-term self-interest.

He said money currently wasted in overcoming other nations’ obstacles could be spent “to invest in new innovative products and services and job creation.”

“Our regulators need to build bridges faster and more systematically. The current economic climate requires us to join forces and to do more with less,” Barroso said. “More importantly, in doing so, we will remain strong global players who set the standards for the 21st century.”

The official launch of talks to achieve a free trade deal came just ahead of the opening of the summit of Group of Eight leading industrial nations: The U.S., Britain, Germany, France, Italy, Japan, Canada and Russia, plus the European Union.