President Obama’s proposal that the United States and European Union begin negotiations toward a free-trade pact is reasonable and logical.
Despite its problems, the EU is a vibrant and growing economic and political organization of 27 nations (the 28th, Croatia, plans to join this year). Any steps the United States can take to give its exports greater access to this market of half a trillion people, many of them well to do, is to our advantage.
At the same time, giving European exporters greater access to U.S. markets should enhance competition and lower the costs of many products for American consumers, particularly when the recession is making them feel the pinch.
Two-way trade between the United States and EU countries in 2012 was worth a reported $646 billion. Advocates of the free-trade pact on both sides of the Atlantic argue persuasively that a closer U.S.-European market will strengthen the hand of exporters and consumers in the face of competition from China, and help ease the strained employment situations in Europe and America.
Tariffs between the trade zones are low, averaging 3 to 4 percent. But nontariff barriers will need to be negotiated. Some are necessary, such as those that are based on safety. Others are artificial hurdles sought by domestic industries on both sides to protect their markets from import competition.
Lobbyists for these industries will go all out to continue to maintain their markets. In the United States, they will use campaign contributions to members of Congress to work their will and block or modify the proposed agreement based on their narrow interests.
It will be hard to gauge in advance the impact of such an agreement on jobs. Americans are right to believe that in fair competition for markets, especially with and in Europe, its products will be appealing, its producers will gain, and employment of U.S. workers will increase.
A U.S.-European free trade pact makes good sense for America. The Obama Administration should pursue the agreement quickly and actively.