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IN ORDER TO EVOLVE NEW PATTERNS FOR JOINT ACTION, THE TRANSATLANTIC PARTNERS MUST MAKE A BASIC COMMITMENT. THE TASKS OF TODAY CAN BE COMPARED WITH THE NEED FOR REORIENTATION THAT FOLLOWED WORLD WAR II AND REQUIRED RADICALLY NEW THINKING ON BOTH SIDES OF THE ATLANTIC. TODAY THE AGENDA IS THE REDEFINITION OF THE COMMUNITY ENCOMPASSING THE UNITED STATES AND EUROPE, AND IT NEEDS STRUCTURES THAT WILL PROVIDE AN UP-TO-DATE FRAMEWORK FOR CLOSE COOPERATION BY THE TRANSATLANTIC PARTNERS INTO THE FUTURE. IT IS TIME NOW TO SEIZE THE HISTORIC OPPORTUNITY BEFORE IT IS PERMANENTLY BLOCKED BY EMERGING TRENDS TOWARD ABANDONING EURO-AMERICAN SOLIDARITY.

This paper analyses the prospects and problems of a Transatlantic Free Trade Area (TAFTA) between the European Union and the United States. Possible economic reasons for the proposal of TAFFA such as the intensity of bilateral trade and a strong interdependence in investment flows and the similarity of the EU and the US in their factor endowment and tariff structure are examined. There are cases shining favourably on the idea, but the implementation of TAFTA will imply substantial costs due to the internal and external consequences. The main problem of a free trade area between the two most important economic blocs is the impact on the multilateral approach of trade liberalisation. The authors suggest a Transatlantic Liberalisation Initiative (TALI) as an alternative to TAFTA. Under TALI, the EU and the US should accelerate their implementation of their Uruguay Round commitments and liberalise in areas that are not yet covered by WTO agreements. This should be done under the Most-Favoured Nation clause and would be a strong motivating force for multilateral liberalisation. In addition, TALI could be a forerunner in reducing market segmentation and in establishing a semiinternal market between Europe and America.