Following an announcement by President Obama and the European Union mid-February of their intent to pursue a new trade and investment agreement, President Obama notified the U.S. Congress late last month of his intent to begin the talks in support of the Transatlantic Trade and Investment Partnership. The President said in a letter to Congress that reaching an agreement could be a strong driver of mutual job creation, economic growth and competitiveness.
According to Ernie Preeg of the Manufacturer’s Alliance for Productivity and Innovation, the agreement would improve U.S. competitiveness in the technology-intensive manufacturing industry, which accounts for 80 percent of U.S.-EU merchandise trade.
“A broader and more competitive U.S.-EU free market for manufactures will lower costs and stimulate a faster pace of technological innovation, with corresponding gains in U.S. international competitiveness,” Preeg says.
According to MAPI, China displaced the U.S. as the world’s largest manufacturing nation in 2010 and widened its lead in 2011. “The U.S. global deficit in manufactures increased from $326 billion in 2009 to $498 billion in 2012, or by 53 percent, while the Chinese surplus soared from $422 billion to $755 billion, or by 79 percent,” Preeg says.
Preeg says the agreement, albeit an “ambitious undertaking,” will help offset a serious competitiveness challenge from China and other newly industrialized economies.