The European Union and the United States have agreed to talks on a free trade alliance. European Commission President Jose Manuel Barroso said they should be able to start discussions by the end of June on bringing down trading barriers. It would be the most ambitious free trade deal ever attempted, encompassing half the world’s economic output and a third of global trade flows. Barroso told a news conference: “A future deal between the world’s two most important economic powers will be a game changer. Together, we will form the largest free trade zone in the world. So this negotiation will set a standard, not only for our future bilateral trade and investment, including regulatory issues, but also for development of global trade rules.” He spoke after President Barack Obama announced US support for the idea during his annual State of the Union address to Congress. Tough talks ahead The EU estimates such an agreement would boost its annual GDP growth by half a percent, however the EU Trade Commissioner Karel De Gucht warned the talks will be tough. Import tariffs between the two are already low – at an average of four percent. Negotiations will focus on harmonising standards, from car seat belts to household cleaning products, and regulations governing services. Ideally, De Gucht said, the negotiations should be wrapped up in two years. Before talks can start, the US Congress must be notified and the European Commission needs approval from EU member states. It will present draft negotiating directives in March, no doubt prompting debate. How they gonna see this down on the farm? One of the key sticking points is likely to be agriculture. When a transatlantic trade deal was suggested in 1998, it was shot down by France, which feared the European Union could be forced into concessions on agricultural trade. The United States has long been frustrated with EU restrictions on US farm products such as genetically modified (GMO) crops, poultry treated with chlorine washes and meat from animals fed with the growth stimulant ractopamine. In an early sign of EU reticence, Barroso said the negotiations would not compromise consumer health. “We will not negotiate changes that we do not want of the basic rules on either side, be it on hormones or GMOs,” he said. The United States does not want a repeat of the Doha round of world trade talks, which began in 2001 and have never come to a conclusion.