US-EU free trade negotiations begin

US-EU free trade negotiations begin

The United States and the European Union, after nearly two years of preparation, start talks today aimed at securing a free-trade agreement to squeeze new economic growth out of the world’s largest trade and investment relationship.

The parties are already each other’s top trade and investment partners, with two-way trade that totaled more than $646 billion last year.

The proposed Transatlantic Trade and Investment Partnership (TTIP) pact would be the world’s biggest free-trade deal, covering about 50 percent of global economic output, 30 percent of global trade and 20 percent of global foreign direct investment.

The Centre for Economic Policy Research in London has estimated that an ambitious agreement, once fully implemented, could boost U.S. and EU economic growth by more than $100 billion a year.

Turkey wants to be in

Turkey has been requesting its involvement in the process. The free trade deals between the EU and third parties have enabled these other countries’ goods to enter Turkish markets via Europe with zero duties, yet the decision to provide the same privileges to Turkey is up to the third party.

The Turkish Economy Minister Zafer Çağlayan said several times that leaving Turkey outside of the free trade agreement between the EU and the U.S. creates unfair competition for Turkey.

US Vice President Joe Biden said on May 16 during Erdoğan’s visit to Washington that Erdoğan and Obama agreed to work toward a FTA, and said, “We will not only keep Turkey informed of every step of the negotiation with the EU, but we believe that if in fact, we can get by some of the divisions and the differences we have with regard to free trade agreements, that if we can get there before the time we settle the EU new trade agreement, that it will be a great opportunity for Turkey.” Meanwhile a committee will be dealing with the economic issues regarding both parties.

The Customs Union structure grants the U.S. the authority to decide about whether or not to extend favorable trading privileges to Turkey.