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In what would be the largest trade pact ever, the United States and the European Union early in 2013 said that they would begin talks to reach an agreement on a Transatlantic Trade and Investment Partnership. Policymakers and business interests on both sides of the Atlantic are touting the huge economic benefits that such an agreement would bring not only to the two parties but to the rest of the world’s trading system.
The negotiations aren’t likely to be easy even though they involve highly developed economies with already strong economic and cultural ties. The most contentious areas of the talks will involve the differing regulatory structures and approaches in the U.S. and the EU and how to resolve those differences. Also sure to be debated are “behind-the-border” trade barriers and the still protectionist policies of both parties relating to their agricultural sectors. How these and other issues are resolved will determine whether the agreement indeed promotes free and open trade or gets mired in a regulatory morass.