US-EU Trade Talks may Begin in Obama Second Term

One of the most high-profile of these is the expected announcement of whether and when Washington and Brussels might launch bilateral trade talks - a move that, experts say, could yield substantial gains for the world’s largest trading relationship.

The two sides currently trade €700 billion annually in goods and services; while already having low tariffs between them, experts note that the lowering of non-tariff barriers could have a significant impact on the volume of bilateral trade.

The idea of a US-EU trade deal resurfaced in November 2011, when Obama - together with European Commission President José Manuel Barroso and EU Council President Herman Van Rompuy - directed the Transatlantic Economic Council to form a joint working group in order to assess options for deepening the US-EU economic relationship.

The resulting EU-US High-Level Working Group on Jobs and Growth, led by US Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht, issued an interim report in June that found that such a pact would likely be the best option for creating jobs and fostering growth for both sides.

However, the final recommendations - which had been expected this past December - have yet to be released. In the meantime, EU national leaders have publicly reiterated their support for the negotiations in recent weeks, with UK Prime Minister David Cameron pledging to make it a priority during his country’s G-8 presidency, and Ireland promising the same as it takes on the EU presidency.

Trade sources have noted that Washington has been more guarded about whether to agree to negotiations, given long-standing disagreements between the two sides on issues such as regulatory standards. US officials, however, have stressed that they want to be sure that the substance is right and that negotiations can indeed be completed in a reasonable timeframe.

The new date for the release of the recommendations has yet to be formally announced; while some have said that the report will be issued this month, others have suggested that the timing might be set to coincide with Obama’s annual State of the Union address on 12 February.