Writes Richard Bruton TD, Minister for Jobs, Enterprise and Innovation ahead of Informal Meeting of EU Trade Ministers in Dublin this week.
A new EU-US Free Trade Agreement will provide an invaluable shot in the arm for Irish and EU exporters and workers. That is why I will be using my position as Chair of the EU’s Trade Council to push for agreement among EU Trade Ministers on a common position when I welcome them to Dublin on Thursday.
In the case of our own country, Irish exports of goods and services increased by 5% in 2011 to reach a value of €173bn. A further 5.5% increase in 2012 saw a new record for Irish exports of €182 bn.
This growth is helping us to make the hard-fought progress on net job creation. It is one of the reasons why the private sector has been adding over 1,000 jobs per month for the last fifteen months.
Within the global mix, the US clearly remains a key market for Irish and EU exporters.
Trade between the EU and the US account for over 40% of global GDP, with goods and services worth over €2 billion traded across the North Atlantic each day
So what would a new Free Trade Agreement between these economic super blocs look like and what would it offer us?
As things stand, average trade tariffs between the US and the EU are already quite low, averaging only 2%. This means that the key to increasing EU-US trade lies in tackling non-tariff barriers.
Chief among these will be removing regulatory barriers to trade. This means EU and US regulatory agencies will be required to find common ground on industry standard for everything from medical devices, electrical equipment to pharmaceuticals.
The introduction of common regulatory standards will make a real difference to Irish and EU exporters by potentially cutting the duplication of compliance costs for exporters in meeting essential health and safety regulations and product standards.
Another barrier to growth will hopefully be removed by the EU and US authorities agreeing common standards for trade in services in areas like retail, professional services and ICT.
Even outside a EU-US deal, the completion of EU Single Market for services contains massive potential. Abolishing restrictions in the EU’s services sector alone could boost EU GDP by 2.6%.
That’s why the Irish Presidency has already delivered on this area, securing agreement on a one-stop shop for innovative enterprises to register and protect their patents in the European Union.
Another key area in any new EU-US trade deal will be the liberalisation of investment regulations. Clearly, the areas that need to be tackled are complex and will not be easily resolved. However, the rewards are great.
A comprehensive and ambitious new agreement has the potential to boost GDP in both economies by nearly .5%. Given the size of the transatlantic economy this could amount to an extra €119 billion for the EU. This also equates to hundreds of thousands of jobs being created in the EU.
It should also be remembered that a new agreement will also act as a stimulus to US economic growth. This will undoubtedly be another positive outcome for Irish exporters.
It is also worth remembering that as long as our budgetary position remains constrained, increasing international trade will be one of the most valuable engines to boost to growth and create jobs.
Ireland’s special relationship with the US has allowed me add to an extra dimension to the EU Trade Ministers’ meeting. For the first time the US Administration will attend an EU Trade Council meeting. This will allow direct engagement between Member States and the administration. This can only help increase the sense of common purpose and advance the process.
While a free-trade agreement with the US is a top priority, it’s only one of the deals I am focused on as Chair of the EU Trade Council. There is also huge potential for the EU and Ireland in the conclusion of new trade agreements with Canada and in the longer term with Japan. We are also extending the reach of the EU’s new trade agreements in key Asian markets where trade talks are underway with fast growing economies such as Vietnam, Thailand and Malaysia. This will make it easier for Irish companies to trade in these less familiar but high-potential markets.
If I can help to secure agreement among Europe’s Trade Ministers, this will bring us a significant step closer to an historic deal with our friends in the US that will lead to increased trade and more jobs - a prize worth pursuing with determination.
During the term of the Irish Presidency of the Council of the European Union, Minister Richard Bruton will be leading Ireland’s efforts to real achieve progress on a number of significant measures in the areas of employment, trade and competitiveness.
A version of this article appeared in the Sunday Business Post www.businesspost.ie