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WASHINGTON – President Obama made a fleeting reference in his recent State of the Union address to a free-trade zone encompassing the European Union and the United States.
Sources say the initiative really is meant to confront what is quickly becoming a challenge from China’s fast-growing economic power, reports Joseph Farah’s G2 Bulletin.
Recent EU statistics show China is now the EU’s second-biggest trading partner behind the U.S. while the EU is China’s biggest trading partner.
Economic conditions in Europe, however, have dampened demand while affecting China’s production, resulting in a cutback.
This is due to the fact that China today is the largest exporter in the global economy. Where China has experienced a 9-percent growth annually for almost a decade, the recent downturn in Europe has resulted in an 8-percent annual growth rate in China.
China also has its own economic leverage that will tend to still make it competitive despite its dependency on European market gyrations.
Much of Europe, and certainly the U.S., are heavily in debt to China, and Beijing has made it a point to invest billions of dollars over time in both countries, with the effect of making them even more dependent on economic bailouts from Beijing.
Called an “economic NATO,” the concept is being hailed as “ground-breaking” and a “game-changer” that supposedly won’t cost anything.
The devil, however, is in the details.
European experts agree that there are many hurdles that will need to be bridged, especially when it comes to agriculture, given the Europeans’ concerns for hormone-treated beef, genetically modified crops and chlorine-rinsed chicken.
At the same time, the U.S. has issues with Europe’s over-regulation of everything.
The free-trade zone concept, however, is designed to eliminate barriers for the exchange of products while creating what will become the world’s largest free-trade zone.
Russian President Vladimir Putin has similar designs in the form of a Eurasian Union that would cast a free-trade zone from Russia to Central Asia and possibly beyond.
Without saying so, Putin’s push with the former Soviet republics similarly is meant to blunt the growing economic influence China is casting over those countries as well.
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