Last night in his State of the Union address, President Obama endorsed launching trade talks toward a US-EU free trade agreement. I will write in more detail in the American, but I want to flag a quick, brief reaction here: While I support negotiating a US-EU FTA, I think it would be a great mistake to expend energy and resources on this project over the next year. The US is now entering the crucial endgame negotiations on the 11-member Trans-Pacific Partnership Agreement (TPP), and most observers agree that the next nine months will decide whether these talks succeed or fail. At this point, the White House and USTR face at least a dozen substantively difficult and politically sensitive decisions to work through. Distraction to detailed work on the US-EU FTA would jeopardize a successful conclusion of the TPP. Failure of the TPP negotiations over the next year will have repercussions far beyond trade policy. For better or worse, the TPP has become the central symbol of the US “pivot” to Asia and of the ability of the US to lead in the creation of a trans-Pacific regional economic architecture. A Chinese-backed alternative regional FTA—which excludes the US—stands in the wings. The US should single-mindedly pursue the TPP to a successful conclusion over the next year: Then there will be plenty of time to wrestle with the complex, and possibly intractable, regulatory challenges inherent in an FTA with the EU.
Monday, March 10, 2014
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