Steven Kelk | 16.11.2003 12:48 | Globalisation
trade/investment area. This would be scary stuff indeed; near-complete freedom for
capital and goods between the US and UK. Ties in with the Bush visit too.
£100bn trade deal to sweeten visit
Kamal Ahmed, political editor
Sunday November 16, 2003
A £100 billion plan to create a single market between Europe and the United States will be unveiled this week as part of a government effort to show that having a close relationship with America is worth jobs and money.
Gordon Brown, the Chancellor, will announce an independent inquiry into removing all trade barriers between the US, Britain and the rest of the European Union.
Officials hope the deal will put the row over US steel tariffs into context, by saying that difficulties over specific areas are insignificant against the wider need to stay close to America economically.
Brown will say that the new inquiry should mirror the Cecchini report in 1988 that paved the way for the introduction of a single market in Europe. The report said that removing tariffs would add 4.5 per cent to Europe's GDP, cut prices by 6 per cent and increase employment by 1.75 per cent.
Treasury officials will now produce a series of figures that they will suggest could be the value of a wide-ranging free-trade deal with America.
They will say that such an agreement would be worth £100bn a year to the EU, which would be able to export its goods much more easily to America. It would also raise economic growth by 2 per cent, and it could create as many as one million jobs across the Continent, thousands of them in Britain.
'Just as in 1988, when Europe was at the outset of the great project to move towards deeper ... integration, the Cecchini report broke down the barriers preventing the creation of a single market in Europe by clearly showing the benefits in commerce and jobs,' Brown will say in a speech tomorrow.
'So the UK, the US and other countries have agreed to proceed with a major trans-atlantic review on how we can move beyond the old trade disputes and reap the benefits of greater trade and investment liberalisation.'
The Chancellor will make the speech at the Confederation of British Industry conference in Birmingham alongside John Snow, the US Treasury Secretary.
Whitehall sources said it was only by being close allies of America that such deals were possible, and pointed out that the prospect of a Europe-wide deal was being announced in Britain, rather than in Brussels.
'What binds America and Britain together is not simply a shared history but shared values,' Brown will say, backing Prime Minister's pro-American stance.
As part of a package of measures to sweeten President Bush's visit to Britain this week, new bursaries for British entrepreneurs to be sent to American business schools will be announced.
The awards, provisionally entitled Greenspan Scholarships after the chairman of the US Federal Reserve, will go to people trying to launch projects in deprived areas of the UK. They will study for a term with the £10,000 awards at Ivy League institutions such as Harvard and Princeton.