Trade pact right for U.S. and EU

By REP. ERIK PAULSEN and REP. RICHARD NEAL

Democrats and Republicans alike want to see strong economic growth and good jobs for Americans, even if at times we may disagree about how best to achieve these objectives.

So it’s gratifying when both parties agree on something that can boost jobs and spur economic growth in America, like the recent movement toward clinching a comprehensive trade agreement with the European Union, one of our most important allies and commercial partners.

Earlier this year, members on both sides of the aisle were excited to hear the president mention the importance of trade during his State of the Union address and welcomed his notification to Congress of the intent to launch negotiations toward a Transatlantic Trade and Investment Partnership with the EU.

This is a golden opportunity for America. The United States has often supported European integration as a way to end the rivalries on the continent that too often erupted into violent wars. The EU has been a success, bringing together 27 countries — from Great Britain to Poland, Finland to Portugal — into an integrated partnership that has brought democracy to dictatorships and the former Warsaw Pact. Members of the EU are currently close allies in addressing tensions in the Middle East, development in Africa and the full range of issues that confront us around the world. A deeper economic partnership will only strengthen these allegiances.

Not surprisingly, the United States and the EU already have by far the world’s largest economic relationship. Even with its recent economic woes, the EU economy is larger than our own: It’s a $16 trillion market with 500 million high-income consumers. We already trade more than $1 trillion of goods and services each year.

Even more important, our relationship is based on strong investment ties — the Rolls-Royce and Daimler plants Obama visited last year are but a small fraction of the $1.6 trillion European firms have invested in the United States, employing some 4 million Americans largely in high-paying manufacturing jobs. Alongside the U.S. companies that have invested $2 trillion in Europe over the years, these firms are a major force behind the nearly $500 billion in goods and services we exported to the EU last year.

As strong as our relationship is, we can make it better. We can eliminate the tariffs that tax the integrated operations of our companies, liberalize cross-border trade in services now enabled by the Internet, enlarge investment opportunities, expand access to government procurement markets and build bridges between our regulatory approaches. Doing so would add at least $135 billion to the U.S. economy each year, or about $1,000 for each American family, according to the most recent estimate by the Centre for Economic Policy Research in London.

Our regulatory processes are different, and even when the protections achieved are similar, these differences create unnecessary problems. For instance, a medical device manufacturer in Massachusetts or Minnesota may have Food and Drug Administration approval for its products but still must go through costly approval procedures to sell its instruments in the EU. Both the patients in Europe and the workers in our states lose. Our car companies, pharmaceutical firms and many other sectors face the same sort of challenges from regulatory differences which bring no added safety to our people.

The TTIP can help by encouraging our regulators, where possible, to determine whether they have equivalent regulatory outcomes. If they do, and if their oversight committees agree, products and services sold in one market could then also be sold in the other. This sort of partnership will enable regulators to focus their resources on imports from countries that don’t have as strong and reliable regulatory regimes. This will benefit our smallest companies the most, as they lack the resources to research and meet foreign regulatory requirements.

Achieving such an agreement will not be easy. Sectors such as agriculture will present challenges as many American farmers and food producers face high tariffs in Europe and various regulatory barriers — eliminating these barriers will expand markets for our fruits, nuts, beverages and other foods. Many U.S.-based high-tech and innovative companies have a weighty presence abroad and are faced with aggressive competition at every turn from their foreign-based counterparts. The TTIP with the EU would reduce barriers and increase market access for American technology products, ideas and services, thus growing American companies and creating more American jobs.

The TTIP presents a golden opportunity to boost our economies and to generate jobs here in America and in Europe. As businesses see how the market will change, they will invest to adapt. And with the removal of barriers, new opportunities will arise.

A comprehensive trade and investment partnership with the EU is good for American job creators and workers and should be welcomed in Congress as one opportunity we can all embrace.

Rep. Erik Paulsen (R-Minn.) serves on the House Ways and Means Committee and the bicameral Joint Economic Committee and is co-chairman of the Congressional Medical Technology Caucus. Rep. Richard Neal (D-Mass.) is a senior member of the House Ways and Means Committee and the ranking member of the Subcommittee on Select Revenue Measures.

Read entire article online here. 

Learn more about Rep. Paulsen’s work on advancing U.S. – EU trade relations here.

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