Recent talks between the European Union and the United States may lead to a free-trade deal that could ultimately give the EU economy a boost that will also create jobs.

According to senior trade officials, the free-trade agreement, if it were to be implemented, could grow the EU economy by at least 1 per cent andincrease employment by hundreds of thousands. If the deal were worked out, it
would ultimately be the largest free-trade agreement to date.

Karel De Gucht, EU Trade Commissioner, visited Harvard University on the 2 March 2013 to discuss the positive effects on both the United States and the EU. 

In his speech, De Gucht said that they are still “suffering the effects of the earthquake that hit our economies in 2008” and went on to claim that the deal would be the “cheapest stimulus package you can imagine.”

Currently, EU-US trade is worth approximately £393 billion every year. Though formal talks have just begun, the EU hopes to have the negotiations completed by 2014, which is also before the new European Commission is seated.

The deal would reduce the present trading barriers between the EU and US, which also happens to be the two largest economies in the world. According to estimates it would increase the EU’s annual GDP by 0.5 per cent.

Today, the average tariff barriers are between 3 per cent and 5 per cent. The deal would focus on a reduction of these barriers, if not eliminating them altogether.