in the final months of the obama presidency, u.s. officials are scrambling to salvage the trans-pacific partnership trade deal, which is facing opposition in congress. negotiations over a u.s.-eu deal<u+2014>the trans-atlantic trade and investment partnership, or ttip<u+2014>are meeting equally daunting challenges. the u.s.-eu commercial relationship is full of issues, such as agricultural trade, which have proved intractable for decades, along with newer disputes such as post-edward snowden standards for data-privacy protection. discouraged by the lack of progress, european leaders are now considering a pause in negotiations. tens of thousands of protesters rallied against ttip in berlin and other german cities last month, opposing the agreement<u+2019>s alleged impact on environmental standards and animal rights. the french, who are heading to presidential elections in 2017, have threatened to block any agreement. since the united kingdom, the largest u.s. export market in the european union, voted this past summer for brexit, it will no longer be a voice in ttip. yet despite the challenges, the strategic case for a european deal is more compelling than ever<u+2014>and next year will bring the u.s. an opportunity to restart talks with a new approach. we propose that the next u.s. administration relaunch the negotiations as a three-party deal among the u.s., britain and the eu<u+2014>a new atlantic growth pact. an agreement to remove regulatory barriers to trade, including those in financial services, and to spur cross-border investment could help invigorate all three economies. since ttip talks began in 2013, average annual growth in gross domestic product in the eu has been stumbling below 2%. the lack of optimism in europe<u+2019>s economic future, combined with high youth unemployment, is feeding a toxic political environment, evidenced by growing support in germany and france for the extreme right, and in spain, italy and greece for the radical left. brexit complicates the economic picture. roughly one-sixth of the eu<u+2019>s total gdp is now threatening to walk out the door. to minimize economic disruption, the u.k. and eu need a new legal framework for trade, but the clash between opposition to immigration in the u.k. and the view in the eu that the free flow of people is sacrosanct may make it hard to reach agreement, raising the risk of a further fragmented european economy and lower growth in the eu and u.k. a relaunched trilateral deal would spur growth. it would also provide a framework to address the eu<u+2019>s qualms about appearing to reward brexit and encouraging other exits. with a new trade deal in place or on the near horizon, other countries contemplating an exit would now be choosing to leave both the single market and a trading bloc with the u.s. the british could not conclude a trade deal before departing the eu, but they can begin negotiations as soon as they invoke article 50, the formal mechanism for leaving. on the american side, efforts to launch a new trans-atlantic agreement would show that the u.s. remains serious about defending its role in setting standards for global trade. in this presidential campaign, both candidates have sent signals that the u.s. is no longer prepared to lead on trade. yet the candidates also have said they support trade in principle but want to negotiate better deals. a pro-growth trade pact with developed economies offers a good opportunity for the next administration to do this, and a process to address key brexit risks to the u.k. may enjoy stronger support in congress. the atlantic growth pact could eventually serve as the anchor to bring in other countries<u+2014>though with brexit looming the u.s. should start with a three-party deal. the u.s. could spur the new talks by offering a significant new concession<u+2014>the willingness to tackle financial services in the negotiations. this would meet a major european demand from the ttip negotiations. it would also provide a unique opportunity to address one of the core questions surrounding brexit<u+2014>how to avoid a costly disruption of the city of london<u+2019>s role as a center for international finance. trilateral negotiations would be challenging. in contrast, it would be relatively easy for the u.s. and the u.k. to reach a bilateral agreement, and the u.s. should be prepared to pursue bilateral talks if the three-party negotiations fail. but economically and diplomatically, a trilateral trans-atlantic deal has more to offer. the potential costs to the u.s. of a europe left fractured and faltering are very high. the next president should seize the opportunity to take a new approach. ms. silverberg served as u.s. ambassador to the eu from 2008-09 and earlier was an assistant secretary of state for international organization affairs. mr. levy was senior economist for trade at the council of economic advisers during the george w. bush administration.
the benefits of a new atlantic growth pact  - wsj
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