Chancellor Angela Merkel is considering pushing for a transatlantic free trade zone when Germany takes on the European Union presidency next year. "We want to start considering a common market between Europe and America," Merkel told Bild newspaper on Wednesday. "A crucial point would be financial market regulation which could be more closely harmonised," she said.
Germany has an opportunity to push its agenda when it takes over the rotating presidencies of what will then be a 27-nation EU and the Group of Eight (G8) industrialised nations in January. Leading CDU politician Matthias Wissmann says the idea, of which he has long been an advocate, is gaining momentum.
"I expect the conference to pass it and if Angela Merkel gives it impetus, it could be positively received in the United States," Wissmann told Reuters. The motion calls for a transatlantic partnership deal including a consultation mechanism in foreign and security policy and the creation of a transatlantic market.
Wissmann stresses the benefits of harmonising regulatory frameworks and wants a transatlantic market to be completed by 2015 and a financial services and capital markets deal by 2010.
He says trade exchanges amount to one billion euros a day and greater economic integration and lower market access barriers could boost per capita GDP in the EU by 2-3.5 percent and by 1-3 percent in the United States.
Merkel is unlikely to make the idea a top priority but she does seem set to initiate a debate on the subject which could feature at an EU-US summit planned for April, officials say. Senior figures in Brussels, who in the past have expressed scepticism, are keeping an open mind.
EU Trade Commissioner Peter Mandelson told Reuters in an email exchange that he supported Merkel's focus on the EU's relationship with the United States. "I strongly welcome Chancellor Merkel's commitment to deepening EU-US trade and investment links and her reflection on ideas how we might do this," Mandelson said.
The EU-US Transatlantic Economic Initiative, launched last year, would feed into any longer-term ideas of a free trade area "should we and the US seek to pursue this in future", he said.
However, one EU trade official said the chances of the idea becoming reality were slight and noted previous failures. France blocked an attempt in 1998 by then EU trade commissioner Leon Brittan to liberalise transatlantic trade.
With European nations committed to the Doha round of World Trade Organisation talks, many diplomats said Merkel stands the best chance of gaining support for her idea by selling it as something to pursue if Doha fails. The United States would also have to be convinced.
Richard Fisher, president of the Federal Reserve Bank of Dallas, said pursuing some aspects of greater transatlantic trade liberalisation made sense, but completely opening things up may not be desirable. "I don't expect a full-blown trade agreement," he said at Berlin's American Academy on Monday.
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