As the Trans Pacific Partnership (TPP) continues to make progress, with Japan set to join the negotiations later this year, a big new deal is in the making between the giants of world trade, the United States and the European Union. Last month, following announcements in Washington and Brussels, the US Administration gave 90 days notification to Congress that the President intended to negotiate a “Trans Atlantic Trade and Investment Partnership (TTIP).

The acronym is a bit of mouthful but this is an undertaking on an unprecedented scale. As US Congressman Erik Paulsen (R-Minnesota) blogged this week, “the transatlantic economy is the largest and most integrated in the world, comprising 50 percent of global GDP and US$5 trillion in total commercial sales. This agreement has the potential to boost (our) economy and create jobs”.

Yes, it’s the “trade works” message that is behind this negotiation. As EU President Jose Manuel Barroso said “We’ve made important progress on what I believe is a game changer, not only in transatlantic terms, but for the world in terms of trade”.

For all this optimism, this deal – like TPP – will not be easy to negotiate. Importantly both governments realize that in the current economic climate only through expanded trade and investment can business play a role in getting economies growing again.

New Zealand has a close interest in this unfolding negotiation. Not only is the United States our key partner in TPP, but we have longstanding and important trade and investment links with the EU, our fourth largest trading partner. An FTA between us may not be a realistic option, at least not at this time, even though many of our differences in agriculture have been resolved in the Uruguay Round.

TTIP is also significant because bilateral negotiations between the US and EU were once the means to bring about a multilateral deal. With the rise of large developing countries like Brazil, Russia, India and China, this trans Atlantic hegemony is a thing of the past in the World Trade Organisation. But a deal in the east, through an ever expanding TTP, and a trans-Atlantic deal in the west, raises the tantalizing prospect that the global community might one day find a way to bring these together in Geneva, in a restarted and refreshed Doha. Now there’s a thought …