Negotiations between the US and EU on a transatlantic trade and investment agreement begin today. In the long run, an agreement could provide a significant boost to world trade and economic activity. However, the few products for which tariffs are high are all in politically sensitive sectors, such as agriculture and autos and experience suggests that it will be difficult to agree meaningful reductions to non-tariff barriers. Consequently, while politicians aim to conclude a deal by October 2014, in practice the talks are likely to prove extremely slow and difficult.
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