The United States hopes negotiations for a free trade deal with the European Union will drive growth-oriented reforms in the EU economy, the top American trade official said Tuesday.
In a similar vein, U.S. trade representative Michael Froman said China's recent agreement to negotiate a bilateral investment treaty with the United States is a chance to press for economic reforms in the Asian giant that could level the playing field for American businesses.
Froman also told the U.S. Chamber of Commerce in Washington he was "cautiously optimistic" the United States could reach a major trade agreement with Pacific Rim countries by the end of the year despite some skepticism over that timetable after Japan's late entry into the talks.
Froman noted the U.S. goal for all trade agreements currently being negotiated was to promote job creation here and bolster the middle class.
One key to success in newly launched talks on a trans-Atlantic trade deal with Europe will be eliminating unnecessary regulatory barriers to trade, Froman said. And as Europe struggles to pull itself out of recession, he cautioned the bloc not to rely too heavily on exporting to the United States as a way out of its current problems.
The proposed Transatlantic Trade and Investment Partnership has raised great expectations of boosting growth and jobs by eliminating tariffs and other barriers that have long plagued economic relations. It would create a market with common standards and regulations across countries that account for nearly half the global economy.
Froman said both the U.S. and European markets are heavily regulated and have high standards when it comes to health, safety and environmental protection. But he said they must eliminate unnecessary differences and frictions in regulation that prevent a free flow of goods and services across borders.
The two sides are at odds over agricultural and financial services regulation, among other restrictions.
Turning to China, Froman said he saw encouraging signs for bilateral relations as China's new leadership grapples with serious economic issues such as deciding whether it wants to rely so heavily on export-led growth to questions about air pollution and food safety.
"China agreeing to start negotiations on a bilateral investment treaty . . . is a potentially very important development and could help drive reform in China," Froman said.