U.S. President Barack Obama, flanked by Vice President Joe Biden and House Speaker John Boehner (R-OH), gestures at State of the Union address on February 12, 2013 in Washington, D.C.

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Obama: US, EU to launch talks for new bilateral transatlantic trade deal

'Free, fair trade across Atlantic' supports millions of American jobs," said Obama

US, EU already have huge trade relationship worth $2.7 billion per day in goods

Washington Financial Times  — 

The US and the EU will launch negotiations for a bilateral transatlantic trade deal, Barack Obama announced in his State of the Union address, in a long awaited decision which restores trade to centre of efforts to spur growth in large industrial economies.

“Tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union – because trade that is free and fair across the Atlantic supports millions of good-paying American jobs,” Mr Obama said.

The go-ahead for the trade talks was central to a speech in which the US president returned to the theme of his re-election campaign, of promoting policies that he said would help middle-class families.

“It is our generation’s task, then, to reignite the true engine of America’s economic growth – a rising, thriving middle class,” Mr Obama said.

The US and the EU and its 27 member states already have a huge trade relationship, worth $2.7bn per day in goods and services, but since November 2011, they have been exploring ways to deepen ties amid rising global competition, particularly from China.

The main focus of a trade agreement between the US and EU would be harmonise standards and tackle the non-tariff barriers that have frequently caused disputes across the Atlantic.

The audience on Capitol Hill for the State of the Union included many invited guests whose relatives had been the victims of gun violence, to highlight Mr Obama’s effort to push new firearm restrictions through Congress.

Mr Obama’s remarks included small initiatives to promote manufacturing, workers’ skills and preschools – and a threat by the president to take unilateral action to cut greenhouse emissions unless Congress acted on climate change.

Mr Obama also called for Republicans in Congress to unwind the automatic $1.2tn in spending cuts, half from the defence budget, that will kick in from March 1, saying they threatened the economy and national security.

“Nothing I’m proposing tonight should increase our deficit by a single dime. It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth,” he said.

The stand-off over how to cut the budget by $1.2tn over 10 years hangs over Mr Obama second term, with sharp reductions likely to slow growth significantly and drain momentum from a gradual improvement in the jobs market.

Mr Obama is demanding that the next round of deficit reduction includes more revenues, largely from closing personal and company tax loopholes, while Republicans insist that the cuts be funded by spending reductions alone.

The White House also waded into the complex politics of cybersecurity on Tuesday, issuing an executive order requiring stronger protections over vital infrastructure.

Mr Obama took the step after several legislative proposals were rejected by Congress last year following opposition from business organisations against new regulations, and from civil liberties groups that feared government intrusion into online privacy.

A senior administration official said ahead of the speech that the objective was to establish voluntary standards for infrastructure companies, such as power plant and railway operators, to protect themselves from cyber-attack.

The order also allows for the government to share classified information about potential cyberthreats with more private sector companies. The official said the executive order was not a substitute for legislation.