‘EU could have free trade area with US’

The EU could have a free trade area with the US within two years, opening up a vast array of opportunities for business, and especially Irish business, according to Jobs Minister Richard Bruton.

Discussions on a bilateral trade agreement with Japan are also under way, offering more openings to expand exports while SMEs should benefit from a €2.5bn fund from 2014.

EU ministers, desperate to find and promote growth as a way out of the crisis, moved closer to agreeing a range of measures at a meeting in Brussels yesterday.

Much of the answer lies in demolishing barriers to trade, both within the EU and externally with major trading partners, such as the US and Japan.

One area that offers much potential, especially for Ireland, is in the digital services area and public procurement where there is still little cross-border contracts.

Technical issues, such as putting in place dispute resolution systems, was essential and was now in focus. Mr Bruton said that, for Ireland, the trade in services, such as software, and financial services was more important than for the rest of the EU, and was where the country’s competitive strength lay.

Discussions in the high-level group working on free trade between the EU and the US were proceeding well with a target date to be finalised in about 18 months time, by 2014.

Mr Bruton said this would be one of the areas where Ireland, when it takes over the presidency of the EU next January, would be pushing to finalise.

Dismantling tariff barriers, and more importantly non-tariff barriers, would create potential for Irish businesses especially to do more business across the Atlantic.

It would be cheaper and easier to get recognition for products and reduce issues on intellectual property protection and issues that limit trade at the moment and should also clear the ground for more food exports.

Because of the value and quantity of joint EU-US trade, Mr Bruton said it also offered an opportunity to set the global agenda by setting good standards. Both sides of the Atlantic needed to stimulate growth and this increased the likelihood of an agreement.

The ongoing arrangements for a bilateral trade agreement with Japan could increase exports by an additional €60bn, add 4% to the EU’s GDP and mean an extra half-million jobs.

If the trade barriers come down Ireland could avail of the niche areas it has developed such as pharmaceuticals, software and financial services. “Traditionally Japan would have a high level of non-tariff barriers,” he added.

The meeting agreed to a new €2.5bn competitiveness and SME programme (COSME) to run from 2014 to 2020. It is expected to assist 40,000 companies resulting in 1,200 new products and services and add €400m in turnover to these companies.

Mr Bruton said that with a 40% refusal rate by banks to fund SMEs in Ireland, this source of funding would be of significant help to Irish enterprises, especially medium-sized ones.

It would especially help SMEs operating outside their home market and looking to access new markets. It would mainly benefit existing entrepreneurs helping fund their development, consolidation and growth; future entrepreneurs including young people to help them establish their own business, and national, regional and local authorities with data, best practice and financial support to test and scale up sustainable solutions for improving global competitiveness.