US/EU trade deal ‘could be biggest in history’

Prime Minister David Cameron and US president Barack Obama announced negotiations will staged in the US next month with the aim of fostering closer economic ties which could create two million jobs and help to “fire up” global economies.

Mr Obama said the proposed trade relationship between the EU and US was the largest in the world and said any deal would be a “groundbreaking partnership”.

Speaking at a press conference at the G8, Mr Cameron said the deal would be the biggest in history and was a “once-in-a-generation prize” he was determined to seize.

“There is no more powerful way to achieve that than by boosting trade and there’s no better way than by launching these negotiations on a landmark deal between the European Union and the US, a deal that could add as much as £100bn to the EU economy, £80bn to the US economy and as much as £85bn to the rest of the world.”

He added: “We are talking about what could be the biggest bilateral trade deal in history.”

Mr Obama said securing a US-EU trade deal would be a “priority” for his administration. But he warned against “downgrading ambition” in a rush to strike an agreement.

“I am hopeful we can achieve the kind of high standards comprehensive agreement that the global trading system is looking to us to develop,” he said. “America and Europe have done extraordinary things together before and I believe we can forge an economic alliance as strong as our diplomatic and security alliances.”

Mr Obama said it was important that the US and EU “get it right”. “That means resisting the temptation to avoid tough issues just for the sake of getting a deal.”

The president said the leaders would be giving a “mandate” to their negotiators, but added that it was likely they would have to step in personally to resolve particularly difficult issues.

European Council president Herman van Rompuy said the pact represented the best chance for Europe and America to compete with emerging giants like China and India.