The global trade deal reached in Bali last week made the World Trade Organization’s director-general cry.
Luckily, they were tears of joy that Roberto Azevedo shed as he concluded: “We have put the world back into the World Trade Organization. For the first time in our history, the WTO has truly delivered.”
The Bali Trade Facilitation Agreement promises to streamline customs procedures, making it easier and more predictable to export goods abroad. The potential gains for the global economy could be as high as $1 trillion. The U.S. and the EU will see their trade costs reduced by 10 percent while developing countries stand to save substantially as well.
The Bali deal sets up a promising 2014 for global trade, 20 years after the multilateral talks that established the WTO. Next week, here in D.C., the EU and the U.S. will have the third round of Transatlantic Trade and Investment Partnership (TTIP) negotiations, confirming that TTIP is moving ahead full speed. A few days ago, in Singapore, the U.S. and several partners in the Asia-Pacific held ministerial negotiations for the Trans-Pacific Partnership (TPP). Elsewhere, the EU is negotiating more than 15 bilateral or regional trade deals around the world and working with the U.S. and others in Geneva to promote trade in services and in key industrial sectors globally.
Both the U.S. and EU need open economies to recover, thrive, keep our jobs and create new ones. More than 38 million U.S. jobs depend on trade, with one-third of manufacturing jobs stemming from exports. One in 3 acres on American farms is harvested for exports. Trade, trade, trade means jobs, jobs, jobs.
The Bali agreement also shows that ambitious regional trade deals can complement the multilateral system and even energize it. No regional deal will be more relevant than TTIP, which promises to be a game changer. Already the biggest economic players, the EU and U.S., aim to eliminate all tariffs and significantly cut nontariff barriers, an exercise that could boost the U.S. economy by more than $100 billion per year and create close to a million new jobs. That’s an extra $900 in the pocket of every American household annually. Every single U.S. state stands to benefit from TTIP. What’s not to like?
As I travel around the United States, governors, state officials, business and local communities tell me they get it. They know the strength of our bonds and the importance of our economic ties. They already see the benefits of inward investment from Europe and exports to our vast single market of 28 EU member states and half a billion consumers. They understand that cutting tariffs and reducing red tape will only add to that bottom line.
TTIP would be a trade deal among equals; our economies are equal in size and, more importantly, our societies are equal in values.
We are democracies that believe in the power of free, open markets, but also firm defenders of the rule of law, protection of intellectual property, and believers in high technical, environmental and public health standards. In sharing this common vision, the EU and the U.S. form a strong, necessary alliance that can successfully make the case for better regulation in global markets, in line with the values we share.
With 2014 shaping up to be the year of “trade for jobs,” we look to Congress to engage in this drive. This applies notably to the overarching authority only Congress can confer on the executive branch to negotiate on trade, but also for changes in U.S. statutes, where necessary. There are several important trade initiatives underway, but it is particularly relevant for TTIP. Decisive congressional support for TTIP — as much as the support we are seeking from our own European Parliament — is an indispensable condition for success. Next year could be an important turning point for both our economies, and we need to seize that opportunity.
Vale de Almeida is the European Union ambassador to the United States.