Brussels, 19/11/2010 (Agence Europe) - Ahead of the EU-United States summit in Lisbon on 20 November, the European Centre for International Political Economy (ECIPE) says that greater transatlantic integration through free trade in goods would be hugely beneficial.
Research published by ECIPE recently, carried out by Fredrik Erixon and Matthias Bauer (Occasional Paper 4/2010), shows that a modestly ambitious free trade deal between the EU and the United States that only covered removal of the already low customs tariffs (averaging 5 to 7%) would be hugely beneficial. The authors argue that the remaining tariffs prevent competition in the two economies' imports, most of whose bilateral trade is inter-company.
According to the results of the research, the static effect on GDP of a transatlantic deal of a zero tariff for trade in goods would be 0.01% for the EU and 0.15% for the United States. Dynamic gains, taking account of the trade facilitations' impact in terms of boosted productivity and lower costs, are estimated at between 0.32% and 0.47% for the EU (between US$46 billion and 69 million) and between 0.99% and 1.33% for the United States (between US$135 billion and 181 billion). The welfare gains (impact on national revenue) would, it is argued, be more evenly matched with the static effect being assessed at US$3 billion for the EU and US$4.5 billion for the United States, and dynamic effect from US$56 billion to 86 billion for the EU and from 59 billion and 82 billion for the United States. In terms of exports, static gains are expected to be in the order of US$28 billion for the EU and US$23 billion for the United States (rises of 7% and 8% respectively), and dynamic gains in the order of US$69 billion for the EU and US$53 billion for the United States (rises of 18% and 17% respectively). (E.H./transl.fl)