An Urban's Rural View

TAFTA. Has a familiar ring, doesn't it? Like its rhyming cousin, NAFTA -- the North American Free Trade Agreement -- TAFTA is a free-trade arrangement, this one with Europe.

Unlike NAFTA, which has smoothed the movement of goods across North America for 18 years, the Trans-Atlantic Free Trade Agreement is just an idea, a gleam in trade buffs' eyes. But it may be an idea whose time has come.

The Wall Street Journal (http://tiny.cc/…) says European officials are enthusiastic about TAFTA and U.S. officials are "more open to the idea than they have been in years."

The U.S. Trade Representative's office and the European Commission, the executive arm of the European Union, have been meeting for a year to produce a report laying out guidelines for the talks, according to the Journal.

Two-way trade between the U.S. and Europe is already huge -- more than $900 billion a year -- and tariffs are low --less than 2% on average. But according to the Economist (http://tiny.cc/…), there's an analysis that suggests that dropping the tariffs to zero would boost Europe's annual economic output by 0.4% and America's a full percentage point.

There would be even more economic gains if the two sides could harmonize their regulatory standards, lowering, for example, Europe's barriers to genetically engineered crops (a key American objective in the talks) and revoking U.S.' states buy-American laws (a key European objective). America's grain growers would be among the beneficiaries.

Achieving harmonization won't be easy, though. Neither side's negotiators can afford to make concessions that will be rejected by legislators when the agreement goes back for approval. It's hard to believe European legislators will relent on biotech crops.

President Obama is said to favor a deal if it can be made "comprehensive." America's farmers can only hope he insists the agenda includes agricultural rules before the U.S. agrees to begin formal talks.

Urban Lehner
urbanity@hotmail.com

(CZ)

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