THE United States and European Union already have the largest trade and investment relationship in the world. The mutual benefits of this exchange are immense, but they could be even greater if we were to tackle a number of regulatory and policy differences that still exist between the two economies.
With the first round of the Transatlantic Trade and Investment Partnership (TTIP) negotiations starting this week, the United States and European Union are taking a major step toward a monumental trade deal that has the potential to drive significant economic growth on both sides of the Atlantic.
With so much to gain for Washington state, which counts the EU among its top trading partners, state businesses should eagerly partner with their European allies to advocate for a comprehensive, ambitious trade agreement.
Such a trade pact could unlock the economic growth and job creation that both the U.S. and EU desperately need, and ensure that American and European companies can hold their own in an increasingly competitive world.
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U.S.-EU trade accounts for one-third of world trade, and total bilateral trade in goods and services reached $1 trillion in 2012. For comparison, that’s twice the size of U.S.-China trade. This proposed trade deal is unprecedented in scope, covering almost every industry.
As British Prime Minister David Cameron declared at the U.K.-hosted G-8 Summit in June, the Transatlantic Trade and Investment Partnership is a “once in a generation prize” that could create 2 million jobs. The British government estimates that the partnership would generate an additional annual $123 billion for the U.S. economy and $154 billion for the EU economy.
Given its economic magnitude, the proposed partnership has the power to make a bigger impact for our economies than any other trade deal on the table.
The partnership’s benefits will be particularly visible in this state. Last year, Washington exported nearly $8.5 billion in goods to the EU. EU member states are top destinations for Washington service exports such as software and tourism.
Washington does well from European foreign direct investment, too, which supports nearly 40,000 Washington jobs, with more than 13,000 of them from U.K. investment alone.
Although the U.S.-EU relationship is already strong, numerous obstacles remain on both sides that limit growth in bilateral trade. The partnership would remove those barriers by eliminating customs duties, liberalizing services trade and promoting regulatory cooperation.
For example, sanitary and phytosanitary rules on both sides of the Atlantic prevent each of us from being able to export as much agriculture produce into each other’s markets as we would like. Pharmaceutical products must undergo lengthy, costly tests in both the U.S. and the EU, rather than single approval of a product for both markets.
An ambitious Transatlantic Trade and Investment Partnership would further open the European market to sales of Washington goods and services from IT to life sciences.
And reaching agreement on the movement of data and people across borders is key to many of Washington’s industries.
A new partnership between the U.S. and EU is long overdue, and it is the catalyst we need to spur economic growth, job creation and competition. The U.S. and EU are and will continue to be key geopolitical allies, and it’s time we extend that relationship to include closer economic cooperation.
The payoffs would be tremendous for trade-dependent Washington state, where 40 percent of all jobs are tied to trade, and for the U.K., where trade accounts for 60 percent of GDP, and one in four jobs is linked to business overseas.
The British government and Washington Council on International Trade will do everything they can to secure a successful outcome.
We ask Washington business leaders, elected officials and consumers to join us in the march toward this momentous partnership.
Robin Twyman is British consul in Seattle and Eric Schinfeld is president of the Washington Council on International Trade.