Business World

Thursday 22 June 2017

Cameron calls for transatlantic free trade agreement

Maeve Dineen in Davos

DAVID Cameron hit back at Germany at the World Economic Forum in Davos yesterday calling on Berlin to contribute significantly more resources and guarantees to help solve the eurozone crisis.

The British prime minister said despite the European Central Bank's funding of the European banking system, policymakers were still far from finding a solution to the underlying problems of the crisis.

His speech in Davos called for a much stronger firewall to prevent contagion within the eurozone, common European sovereign debt, and for powerful countries committing to cut their trade surpluses as much as the struggling countries seek to minimise their deficits.

Mr Cameron also gave his support to the idea of a free trade deal between the European Union and the US yesterday, suggesting that a transatlantic pact could deliver a much-needed boost to global commerce.

His call for a bilateral deal with Washington follows similar comments by German Chancellor Angela Merkel on Wednesday, and comes amid widespread admission among global leaders that the so-called Doha round of free-trade talks is dead.

"Let's get free trade agreements with India, Canada and Singapore finalised by the end of the year," Mr Cameron said.

Global leaders meeting in the Alpine ski resort have traditionally repeated the mantra that the Doha round, launched in Qatar's capital in 2001, is the best way to promote world trade.

"Last year, at this very forum, world leaders called for an all-out effort to conclude the Doha round in 2011," said Cameron. "We said it was the make-or-break year.

"It was. And we have to be frank about it. It didn't work."

Britain's prime minister cited bilateral trade deals the EU is exploring with India, Canada and Singapore, saying they could add €90bn to the bloc's economies.

"Let's also look at options for agreement between the EU and the US, where a deal could have a bigger impact than all of the other agreements put together," he said.

Trade experts immediately poured cold water on the idea of a transatlantic trade deal.

"Running around looking for palliatives in the light of the death of Doha is governance of the headless-chicken variety," said Jean-Pierre Lehmann, Professor of International Political Economy at the IMD business school in Lausanne, Switzerland.

Former EU trade chief Peter Mandelson said the proposal was understandable given the lack of progress on Doha, but called it "optimistic" in the light of the enormous hurdles that would have to be overcome.

The head of the World Trade Organisation, Pascal Lamy, said some differences between Washington and Brussels would be difficult to bridge. (Additional reporting by AP)

Irish Independent

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