Published for Foreign Policy, February 22, 2013
President Obama’s surprise announcement in his State of the Union address that he plans to start talks on a free trade deal between the United States and the European Union could serve as a boon to the nation’s economy or a bust for the nation’s competitiveness. Though reaching any sort of deal will be difficult, leaders in the United States should avoid a proposal that could make American markets more like their European counterparts and should instead seek a plan that helps introduce the best of the American labor markets to the EU in order to boost growth on both sides of the Atlantic.
A successful free trade agreement (FTA) will achieve the following: expand U.S./EU trade, renew the Atlantic political/economic alliance, improve competitiveness in both markets, and set a benchmark for future trade accords.
In order to walk across the finish line together, the United States and the EU must effectively resolve their differences on two key economic policies.
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