Us, Eu Plan New Trade Agreement

It was floated weeks ago by Sir Leon Brittan Europes trade commissioner, who has discussed it informally with EU ministers and leading members of Clintons administration.

Tony Blair, the Prime Minister, is said to be enthusiastic about the proposal, which could provide a headline achievement for the governments EU presidency and build on his close personal and political links with Clinton.

EU and US officials believe transatlantic negotiations could help rebuild political support in Washington for further trade liberalisation, after the setback caused by Clinton's failure last year to obtain from Congress the fast track authority needed to reach trade agreements.

 

A US official said interest in Sir Leons proposals had been boosted by Asias financial crisis, which had refocused US attention on Europes attractions as a stable market for exports and investments. The US and EU aim to complete feasibility studies of the proposal in the next two months.

The studies are expected to cover the reduction or elimination of tariffs on industrial goods, removal of technical barriers to trade, promotion of transatlantic trade in services and closer co-operation in areas such as antitrust enforcement and the regulation of investment.

A US official said he expected trade in services to feature prominently in any negotiations. Their agenda may include liberalisation of airline markets on both sides of the Atlantic.

Washington also wants the agreement to remove some EU barriers to imports of agricultural products and set out basic principles on environmental protection and respect for core labour standards.

The Clinton administration believes these elements are essential to persuade domestic lobbies and Congress to support negotiations with Brussels. But its demands could prove controversial in the European Commission and the Council of Ministers, from which Sir Leon has still to seek a mandate for the project.