The President set a bold goal of Free Trade Deal With Europe in his SOTU. Is it doable?
During his State of the Union, President Obama mentioned his interest in securing a Free Trade Deal With Europe. With approximately $4.5 trillion in trade taking place between the U.S. and the EU annually, a free trade agreement could have a significant impact on U.S. exports. A modest 10 percent boost in trade would yield nearly half a trillion dollars in additional goods and services being traded. That’s equivalent to the economic output of New Jersey or Ohio.
More trade and freer trade opens doors for U.S. small-businesses to sell more to European companies and consumers. It could offer a significant revenue and profitability since U.S. goods (priced in dollars) are relative bargains for European buyers. This move would also help achieve the President’s goal of doubling exports by the end of 2014.
While the benefits are clear, the ability to execute is doubtful. Previous trade agreements have taken many years (sometimes a decade or more) to negotiate and ratify. The President no longer has Fast Track authority which made it easier to approve trade agreements. There are significant hurdles on environmental, labor and health issues which would need to be addressed and increasing consumption demand from other markets means the U.S.—while still very important—isn’t the only player when it comes to buying other countries’ exports.
A little about Mike Periu
Periu founded Proximo, LLC nearly 15 years ago. The company provides small business education and training services with an emphasis on finance and technology.
Periu teaches empowerment through entrepreneurship and economic opportunity. He regularly appears on television and radio talking about these subjects.
Periu also writes for leading blogs about finance. These include: American Express OpenForum, Yahoo! Finanzas and the Huffington Post.
Periu studied Finance and International Business at Georgetown University. He is a Board member at the Council for Economic Education.
