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European leaders to endorse U.S. free-trade deal

According to a draft joint statement, European leaders are slated to agree in principle on Friday to push for a free-trade pact with the United States, putting the onus on the White House to respond towards a proposal that would integrate nearly half of the world's economic output.

Key exporters and European heavyweights Germany and Britain appear poised to have secured support and approval from the rest of the European Union at a summit in Brussels to strike a deal with Washington, which many leaders hope serve as a panacea to Europe, rescuing it from multiple banking and debt crises. According to the draft of the final summit statement obtained by Reuters, the European Union will give "its support for a comprehensive trade agreement" with the United States. In addition, "All efforts should be devoted to pursuing agreements with key partners," EU leaders will say, putting the United States at the top of a long list, which also includes Japan and Canada.

Indeed, the EU leaders' statement fosters heightened expectations that U.S. President Barack Obama could endorse the initiative as early as next Tuesday in his annual State of the Union speech, which presidents have traditionally used as a forum to lay out their priorities and ambitions for the year.

President Obama and EU leaders assigned their trade chiefs back in 2011 to look at whether it was feasible to agree a deal to further integrate the two blocs that already institute low tariffs and boundaries. As such, a joint U.S.-EU draft proposal drawn up by EU Trade Commissioner Karel De Gucht and U.S. Trade Representative Ron Kirk is in the final stages of completion, assuring a smooth delivery. De Gucht, who went to Washington this week, has given strong signals that there is enough common ground to proceed forth with the negotiations that have gone smoothly thus far.

Talks could start in months, and though such negotiations are infamously slow and drawn out, both sides appear poised to agree on a symbiotic accord quickly, possibly by the end of 2014. However U.S. officials, already wary of becoming entrenched in endless debates and talks, have said they need a strong political commitment from the 27-country European Union that Brussels is truly committed to opening up its markets before they can proceed ahead with talks.

The EU's formal commitment will be delivered today when the summit, largely focused on efforts to agree the EU's seven-year budget, wraps up with a final statement. German Chancellor Angela Merkel, with support from free-trade advocate Britain, has been vying for a deal for months. "I wish for nothing more than a free-trade agreement with the United States," Merkel said on January 29 in Berlin. According to several diplomats, the time is right for a deal that was first talked about three decades ago, however it was initially considered too difficult because of worries from protectionists on both sides of the Atlantic, especially the farming sector.

In a speech on Saturday in Munich, U.S. Vice President Joe Biden said the economic benefits of a comprehensive trade agreement would be "almost boundless" if the two sides could muster the political will to resolve longstanding differences in regulations that have blocked farm and other exports – "This is within our reach."

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