US, EU agree to cut red tape to boost trade

Washington, Apr 28: US and European Union leaders will take a major step on Monday toward boosting transatlantic trade, while pressing for a swift conclusion to the Doha round of world trade talks now in its sixth year, European government and US business leaders said.

Despite the rise of economic giants in Asia, ''the transatlantic marketplace is still the economic engine of the world,'' European Commission President Jose-Manuel Barroso said in a speech in New York yesterday.

Barroso, German Chancellor Angela Merkel and US President George W. Bush will sign an economic integration framework agreement on Monday to re-energize the world's largest trade and investment relationship by cutting red tape and other business impediments on both sides of the Atlantic.

''Today, it is no longer tariffs, but nontariff barriers and regulatory burdens which act as the biggest brake on the transatlantic engine,'' Barroso said.

German officials were also enthusiastic about Monday's meeting despite last-minute haggling over a joint paper on energy and climate change.

''I think this will be the most substantive EU-US summit ... for a long time,'' German Ambassador Klaus Scharioth said.

After years of talking about reducing regulatory barriers, the trading partners will establish a council to ride herd on the effort headed by EU Industry Commissioner Guenter Verheugen and a top US official.

''What this does is name names of who will be accountable and who will basically crack the whip within the bureaucracies to help us address these issues,'' said Kathryn Hauser, US executive director of the TransAtlantic Business Dialogue, a US-EU business group.

Regulatory Burden

John Bruton, the EU's ambassador to the United States, told sources Television the initiative would make the transatlantic economy much more competitive by reducing businesses' regulatory burden and lowering consumer prices.

''We want to make similar regulations on both sides of the Atlantic so you don't have to test cosmetics twice for safety, you don't have to test pharmaceuticals twice for safety, you don't have to test cars twice for safety,'' Bruton said.

The Organization for Economic Cooperation and Development has estimated reducing regulatory barriers would boost growth in the transatlantic economy by up to 3 per cent.

''Even if it's only half of that, it's still significant,'' Hauser said.

The United States and EU will also sign an ''open skies'' agreement on Monday allowing EU airlines to fly from any city in the 27-nation bloc to any US city and vice versa, a deal replacing restrictive accords dating from World War Two.

''This is an extraordinary step for an extraordinarily regulated industry,'' said Jeff Clarke, chief executive officer of Travelport, whose holdings include the online travel agency Orbitz.

Brussels and Washington have also agreed to talks next year on a second pact to further liberalize transatlantic air travel.

The two sides were still negotiating over a joint statement addressing climate change -- a Merkel priority during Germany's current presidency of the EU and G8 group of leading nations.

German officials said they were hopeful the final document would advance the issue, although it will fall short of Europe's original hopes.

The outlook for the Doha round of world trade talks remains unclear because of sharp differences over how much to cut farm subsidies and tariffs. ''Bringing these talks to a successful conclusion is, and must continue to be a top priority for both the EU and the US,'' Barroso said.

Reuters>