Now here's an economic stimulus program that every American has good reason to support: After a decade of posturing, U.S. and European Union negotiators are getting serious about a free-trade agreement. It would give a welcome boost to sluggish economies on both sides of the Atlantic - and it wouldn't cost taxpayers a cent.
Officials say formal trade talks could begin as soon as next spring. They can't start soon enough as far as we're concerned. The goal should be a comprehensive deal akin to the North American Free Trade Agreement. It should once and for all eliminate the tariffs and other barriers that put an unnecessary drag on doing business between the U.S. and the 27 EU-member states.
Momentum started to build after President Barack Obama's re-election. German Chancellor Angela Merkel and British Prime Minister David Cameron reportedly pushed the idea of launching formal trade talks even as they offered congratulations. Business groups and companies with trans-Atlantic operations have pushed hard too. Even some labor leaders have given a green light.
Moreover, Canada is close to inking a free-trade agreement with the EU. That puts pressure on the U.S. to step up.
You might think that free trade between Europe and America already reigns, given the massive scale of existing economic ties. The trade relationship works fairly well. Tariffs are indeed small. Regulations tend to be more of a nuisance than a monumental burden. Yet eliminating the tariffs, rolling back a hodgepodge of national rules and harmonizing regulations that govern everything from pharmaceuticals to auto parts could make a big difference.
The opportunity is so great because of the enormous amount of money involved. The U.S. and EU account for half of all world economic output. U.S. trade with Europe totaled $485 billion in the first nine months of this year - almost $100 billion more than U.S. trade with China. U.S. exports of goods to Europe accounted for $200 billion.
Europeans buy a lot of American-made stuff. They're good customers.
We know from experience that when trade barriers fall, good customers become even better customers. The U.S. Chamber of Commerce estimates that bringing tariffs to zero would boost U.S.-EU trade by more than $120 billion within five years. Economic growth, as measured by gross domestic product, would get an even bigger boost. The flow of investment between the continents would surge.
We recognize that a trade deal would be complicated. Agriculture no doubt would be a sticking point. Europe protects its farmers zealously. It panders to unwarranted fears about genetically modified crops and livestock. It has a history of restricting competition for individual products based on geography: Think Champagne and Parmesan cheese.
The U.S. is no saint when it comes to agricultural protectionism, either. To pick but one egregious example, American consumers pay a steep price to subsidize a few wealthy domestic sugar growers. Other trade barriers have some basis in justifiable concerns, such as workplace standards, national security, environmental safeguards and consumer protection. Still, the U.S. has overcome these issues in free-trade agreements with nations far less in sync with it than Germany and Britain.
The sovereign debt crisis is forcing Europe to reform its economic policies anyway, including sweeping revisions to labor-market rules. As a result, some potentially difficult issues will be moot even before the two sides come to the bargaining table.
We hope the president hops on Air Force One sometime in the next couple of months and seizes the moment. Anemic growth in the U.S. and the debt crisis in Europe give both sides a compelling incentive to break a senseless stalemate and knock down the final barriers to trade.