Italian and Dutch prime ministers Mario Monti and Mark Rutte argued in favor of a transatlantic free trade agreement between Europe and the United States on Thursday.
The leaders participated in a panel discussion at the World Economic Forum in Davos, Switzerland about future economic growth in Europe.
Rutte, who leads a centrist coalition in the Netherlands, argued that a strengthening of the European single market could produce 4 percent extra growth in gross domestic product over the next ten years. “If we would finally be able to close a foreign trade agreement with Japan, with the United States, we could add another 2 percent,” he said.
Asked about the chances of cementing a transatlantic free trade area in the next couple of years, the Dutch premier said “it is possible to come to an agreement.” Even if the United States are shifting their economic and strategic emphasis to Asia, “to be effective in this relationship between the United States and Asia, they have to work very well together with Europe,” according to Rutte. “We should have [had] this years ago.”
Monti, who faces an election next month in which polls predict he will be replaced by the left wing prime ministerial candidate, agreed that it is “crucial” to expand trade relations between Europe and the United States. “I think it will require important adjustments in policies on both sides of the Atlantic,” he admitted, particularly in agriculture which is heavily subsidized in both the European Union and the United States. “But I think it will eventually be done.”
The left in Italy as well as France, where President François Hollande’s Socialists are in power, will be hesitant to cut farm subsidies, however, especially if northern European countries like Germany, the Netherlands and the United Kingdom push for further expansion of the single market which Mediterranean governments, more prone to protectionism, regard as a threat to their own, less competitive service industries.
The Dutch leader told the Davos forum that he was “frustrated” about the lack of debate about growth in European Council meetings where the continent’s sovereign debt crisis has dominated the agenda for more than two years. “We should move to spend more time on these issues of getting growth going,” he argued. “Therefore we need countries like Denmark, Sweden and the United Kingdom […] to stay not only in the European Union but to be active” in it, as they are less obsessed about solving the problems of a single currency union to which they do not belong, rather about maintaining economic competitiveness in a globalized world.