Summer 2013 will see talks begin between the EU and the United States on producing a free-trade agreement that would give birth to the largest free trade zone on the planet, significant enough to add 0.5% or €86bn to overall EU GDP and 0.4% or €65bn to the US economy by 2027. This agreement would in effect encompass over one third of global output and trade.
European Commission president Jose Manuel Barroso made the announcement after President Obama backed reducing trade barriers in Tuesday’s State of the Union address. It is hoped that talks, which will need the agreement of all EU member states and the US congress, can reach fruition signed by the end of 2014.
Now the ramifications for the aviation sector in all this are massive, but before we all go running down the bar to get pasted on the thought of relaxed regulations in the years to come, we have to think about two sobering hurdles in the way. The main one is of course the EU common agricultural policy, that wonder of wonders that just keeps on giving for unproductive sponging French farmers and the other is the far more close to home spat between Airbus and Boeing over subsidies.
Now it is likely that any agreement will bring with it strict rules on subsidies and therefore the European airlines that remain to this day “assisted” would have to be let to fail which in turn makes this a good tool for sorting out and levelling the EU airline sector by cutting overcapacity and supported low prices. On the question of Boeing and Airbus – Well these guys are rocket scientists after all, all they need do is get together and within five minutes they would have worked a way around anything that EU and US regulators can throw at them, thus we should all be far more worried about the reclining French farmers.