The U.S. and the EU are now committed to drafting the long-awaited transatlantic free trade pact within the next two years. This idea has been kicking around in one form or another for years, but while a number of serious obstacles remain, both sides are in the mood to get something done quickly, as the FT reports:
The idea for a transatlantic trade pact, touted by US president Barack Obama during his State of the Union address on Tuesday night, has been discussed for decades. But US and European politicians are now desperate to present voters with tangible plans to revive growth and create jobs, while forging a united front in the face of competition from China and other emerging markets. [...]
“Together, we will form the largest trade zone in the world…. It is a boost to our economies that does not cost a cent of taxpayer money,” Mr Barroso said.
It can’t be said too clearly: The movement toward global free trade is as dead as the dodo. The Obama administration is responding with two big free trade initiatives that sideline the BRICS. These U.S.-EU talks and the Trans-Pacific Partnership talks as currently constituted leave India, China, Brazil, and Russia on the outside looking in as the U.S. moves toward what it hopes will be benchmark agreements that in the end the BRICS will have to accept.
Meanwhile the G-7 rather than the G-20 has been the focus of of currency discussions. The euro, the dollar, and the yen are still setting the agenda, and countries like Brazil come up short when they try to impact monetary policy.
Not only are all those prophecies of a new era in global economic governance with a bigger voice for the Global South failing to come true; the Obama administration is playing the central role in propping up the North.
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