02/06/2013 04:20 pm ET Updated Apr 08, 2013

Mars and Venus Don't Matter in International Trade

Why Europe and the U.S. should start negotiating a free-trade deal

Policymakers on both sides of the Atlantic have argued for years how to span the bridge between peaceful Europeans from Venus and realist Americans from Mars. The truth is, the debate on our diverging approaches to the challenges of global order has already been overtaken by events. Both Venus and Mars are, after all, part of the same solar system, and subject to the same Newtonian laws of physics. And these increasingly work against the North-Atlantic and Western world. China's 1.3 billion population dwarfs that of the EU and the U.S. Europe and America have seen their share of world trade fall to a combined total of below 30 percent in the face of tough competition from India, China, and other key trading nations set on converting their cheap labor industries into technologically sophisticated economies.

If the United States and Europe do want to remain the nexus of the world economy, they need to act quickly. The time has come to take the decisive step and start negotiating on a transatlantic free-trade agreement, the importance of which would be political as much as economic. There could hardly be a better moment than now: The incoming second-term Obama Administration has a good two years without having to worry too much about the next presidential elections, while the European Commission (which negotiates on behalf of the EU) is still in power until summer 2014. The European Parliament, which will need to give its approval to any final agreement, has just recently renewed its call for a free-trade deal with a staggering 526 votes in favor and only 94 against.

For sure, these talks won't be easy, as past spats over airplanes, hormone beef or chlorine chicken illustrated. But they will be a hell of a lot easier than any serious free trade talks with China or other Pacific nations. Europe and America speak the same language (quite literally, since English has surpassed French as the dominant language in the Brussels bubble), share the same worldview economically with a belief in the benefits of the free market and free trade, and are both liberal democracies.

The rest is, well, down to negotiation. Without a doubt, there will be frequent outcries over lifting agriculture tariffs or import quotas. But once negotiations have started, they will lead to an agreement due to the sheer scale and importance of the project. The possible benefits are staggering: A 2009 study by the European Commission calculates that if only half of all tariff and non-tariff barriers to transatlantic trade would be abolished, GDP on both sides of the Pond would grow by an additional 163 billion euro (approximately 222 billion USD).

But the real benefit of a free-trade zone would be its ability to set, directly through legislation or indirectly through sheer scale, global standards for products, practices and entire markets. The key for the United States and the EU to remain in the driving seat of the world's economy thus is the joint ability to create and influence the framework for the global exchange of goods. It is either that, or being relegated to the passenger seat.