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Business

Germany to profit vastly from EU-US free trade zone

A fresh study by Germany's Bertelsmann Foundation has suggested Germany has much to gain from a planned free trade zone between the US and the EU. It said there would be many new jobs while real earnings would rise.

Up to 160,000 new jobs could be created in Germany, should a planned free trade zone between the US and the 28-member European Union become a reality, the Bertelsmann study claimed Friday.

The survey, which was compiled together with the Munich-based Ifo economic research institute, suggested almost all industries would experience a boost due to the zone, which would cancel many current trade restrictions.

Negotiations on the transatlantic free trade zone will resume on October 7, but experts have warned talks may last for several years because of the complexity of the issues involved.

Stumbling blocks ahead

Nonetheless, German businesses are hoping a deal can be struck earlier. The Bertelsmann study indicated that particularly small and medium-sized companies would profit tremendously for an accord. It said this was particularly true of many export-oriented firms in the German states of Northrhine Westphalia, Bavaria and Baden-Württemberg.

It also pointed out that a free trade zone would see real earnings rising across the board in Germany, with workers in the low-income sector to benefit even more than those with higher qualifications.

The head of the Bertelsmann Foundation, Aart De Geus, warned, though, that a transatlantic deal must have the support of the German population as a whole. "That's why it's not only important that smaller firms stand to profit, but also that consumer and employee rights are fully respected and remain guaranteed," he said in a statement.

The US and the EU together account for over a third of the global annual trade volume and 45 percent of the world's total economic output.

hg/hc (Reuters, AFP)