American and European Union officials this week began negotiating an ambitious free-trade agreement that could provide a much-needed boost to the world's two largest economies.
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Trade in goods and services between the United States and Europe totaled nearly $1 trillion last year, with average tariffs at a relatively low 4 percent. But reducing those tariffs to zero and eliminating other barriers — by, for instance, harmonizing regulations — would provide important benefits to consumers and businesses. It would lower the price of cars, food and other products bought and sold across the Atlantic and help create new jobs.
Hard bargaining lies ahead. European leaders in France and elsewhere are adamant about protecting the film and agricultural industries; American officials will have trouble convincing the states to loosen rules that give preferences to American businesses in government contracting, a pet peeve of European Union policy makers. On tough issues like these, big breakthroughs are unlikely. The best the two sides can probably do is agree to phase out barriers and harmonize regulations over time.
But there are common areas of interest that negotiators should tackle aggressively. The two sides could achieve big gains by accepting each other's auto safety and emissions regulations so companies like General Motors and Volkswagen don't have to make multiple versions of the same car. They could also agree to limit the competing, wasteful government subsidies for the airplane manufacturers Boeing and Airbus. Both sides should also think about opening their markets to each other's airlines for domestic and intra-Europe flights, which would increase consumer choice and lower fares.
American officials have said they want to finish the negotiations by the end of 2014, which would be fast by the standard of most trade deals; the global negotiations known as the Doha Round began in 2001 and are far from complete. If American and European negotiators are successful — and success would include at least some progress on the really tough issues — their example could nudge other countries to finish the Doha Round.
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