A transatlantic free-trade agreement should be a priority
A transatlantic free-trade agreement should be a priority and that economists hope it will bring positive changes for current crisis. All three articles on The New York Times, the Bloomberg.com, and the EurActiv.com mention the new hopes from this free-trade agreement.
For years, U.S and Europeans are the biggest market of foreign trade.
“In 2011, Europeans bought three times more U.S. goods ($286.1 billion) than did the Chinese, and Europeans sold about twice as much merchandise to the U.S. ($368 billion) as they did to China.” (Bloomberg.com)
“While China has dominated the political debate in the United States, U.S. trade with Europe is much larger, totaling $485 billion in goods in the first nine months of this year, compared with $390 billion in trade with China.” (Jack Ewing, The New York Times)
A free-trade agreement or lower/non-tariff agreement for both sides might bring to the U.S and European some great benefits. For example, it might help raise the GDP for the U.S by 0.3 percent and for the European by 0.7 percent because it helps companies more competitive on both markets. Or, it hopes to “create millions of jobs”.
Free-trade will influence on industries and firms such as Daimler might not need to “obtain multiple certifications” whenever it wants to offer a new Mercedes engine to the markets. Or the pharmaceutical industry does not need to have new treatments in both markets. In contrast, some industries also are doubt about free-trade deal such as restrictions of EU for some corn and soy products. A harmonize agreement on what needs to regulate made the process takes so long. But it is still continuing for a commitment soon because of its perspectives. For managers, they need to put their eyes on this process and prepare their plans in doing businesses on both sides (expected affections, reacts of the firms, changes if needed, etc.)
References:
“EU-U.S. Free Trade Deal Offers Painless Stimulus for Both” published June 17, 2012 on www.Bloomberg.com
“Trade Deal Between U.S. and Europe May Come to the Forefront” by Jack Ewing, published November 25, 2012 on www.nytimes.com
Businesses will adjust rather quickly to any such treaty. The laggers will be governments. Europe has many governmental restraints on imported foods, while the U.S. government places heavy regulation on pharmaceutical products and carbon emitting items such as cars. Once such a treaty were to go into effect, a war or natural calamity would wreak havoc on the trade relationships and balances. That is another major consideration for the long-term effects of such a treaty.
ReplyDeleteI don't know whether I deeply get your ideas or not. But, you are absolutely right. Any outside or natural change would affect the relationship between both sides. And, whenever considering any common agreement, each side always tries to take more advantage benefits for their own. So, to get the mutual commitment is not easy. It would take time.
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