LONDON— At the G8 Summit in Britain, President Barack Obama and European leaders announced the start of an effort to reach what is being called the biggest trade deal in history. Officials are focusing on regional trade agreements because the long effort to reach a new global trade deal is stalled.
British Prime Minister David Cameron stood with U.S. President Barack Obama and European Union leaders to make the announcement.
"We are talking about what could be the biggest bilateral trade deal in history," Cameron noted. "A deal that will have a greater impact than all the other trade deals on the table put together."
It was one of Cameron’s key goals for the summit he hosted for leaders of eight of the world’s top industrialized countries. But such regional trade deals are really not the leaders’ first choice, according to G8 expert Stephen Pickford of London’s Chatham House.
“I think everybody accepts that having a fully multi-lateral, universal trade deal is the best option. But that seems to be unattainable at the moment. And so I think people are focusing on what is the second best, which is to take forward trade liberalization between willing partners,” said Pickford.
But not all the partners are so ‘willing,’ even in this effort among close allies.
At preliminary talks, the French Trade Minister nearly vetoed the plan.
France was concerned about trade in movies and other entertainment products. French officials want to protect their industries from the power of Hollywood and American Internet companies.
But aside from such concerns, most leaders see trade as a jobs creator and a stimulus to economic growth worldwide.
“Most developed countries, and almost all of the G7, are still struggling to recover from the world economic and financial crisis. They are for the most part still mired in quite slow growth," Pickford stated. "And there are the first signs of trade tensions starting to emerge again.”
The leaders are determined not to let such tensions hurt their economic recovery efforts.
“It is important that we get it right and that means resisting the temptation to downsize our ambitions or avoid tough issues just for the sake of getting a deal,” said Obama.
It will take months, maybe years, to reach an EU-U.S. free-trade accord, and disagreements on some issues may force the leaders to scale back their ambitions. But President Obama promised to stay personally engaged in the issue, which he calls “critical” to the effort “to promote growth and jobs.”