Washington (Financial Times) -- The US and the EU will launch negotiations for a bilateral transatlantic trade deal, Barack Obama announced in his State of the Union address, in a long awaited decision which restores trade to centre of efforts to spur growth in large industrial economies.
"Tonight, I am announcing
that we will launch talks on a comprehensive Transatlantic Trade and
Investment Partnership with the European Union -- because trade that is
free and fair across the Atlantic supports millions of good-paying
American jobs," Mr Obama said.
The go-ahead for the
trade talks was central to a speech in which the US president returned
to the theme of his re-election campaign, of promoting policies that he
said would help middle-class families.
"It is our generation's
task, then, to reignite the true engine of America's economic growth -- a
rising, thriving middle class," Mr Obama said.
The US and the EU and its
27 member states already have a huge trade relationship, worth $2.7bn
per day in goods and services, but since November 2011, they have been
exploring ways to deepen ties amid rising global competition,
particularly from China.
The main focus of a trade
agreement between the US and EU would be harmonise standards and tackle
the non-tariff barriers that have frequently caused disputes across the
Atlantic.
The audience on Capitol
Hill for the State of the Union included many invited guests whose
relatives had been the victims of gun violence, to highlight Mr Obama's
effort to push new firearm restrictions through Congress.
Mr Obama's remarks
included small initiatives to promote manufacturing, workers' skills and
preschools -- and a threat by the president to take unilateral action
to cut greenhouse emissions unless Congress acted on climate change.
Mr Obama also called for
Republicans in Congress to unwind the automatic $1.2tn in spending cuts,
half from the defence budget, that will kick in from March 1, saying
they threatened the economy and national security.
"Nothing I'm proposing
tonight should increase our deficit by a single dime. It's not a bigger
government we need, but a smarter government that sets priorities and
invests in broad-based growth," he said.
The stand-off over how
to cut the budget by $1.2tn over 10 years hangs over Mr Obama second
term, with sharp reductions likely to slow growth significantly and
drain momentum from a gradual improvement in the jobs market.
Mr Obama is demanding
that the next round of deficit reduction includes more revenues, largely
from closing personal and company tax loopholes, while Republicans
insist that the cuts be funded by spending reductions alone.
The White House also
waded into the complex politics of cybersecurity on Tuesday, issuing an
executive order requiring stronger protections over vital
infrastructure.
Mr Obama took the step
after several legislative proposals were rejected by Congress last year
following opposition from business organisations against new
regulations, and from civil liberties groups that feared government
intrusion into online privacy.
A senior administration
official said ahead of the speech that the objective was to establish
voluntary standards for infrastructure companies, such as power plant
and railway operators, to protect themselves from cyber-attack.
The order also allows
for the government to share classified information about potential
cyberthreats with more private sector companies. The official said the
executive order was not a substitute for legislation.
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