TAFTA - a dead horse or an attractive open club?

A Transatlantic Free Trade Area (TAFTA) has been proposed in the mid-1990s to revitalize the economic and political ties between the United States and the European Union. This paper discusses the expected economic gains from such a free trade area for its members with respect to trade in goods and services and investment flows. It then looks at potential effects for third countries, and discusses how TAFTA fits into the WTO institutional rule system for the world economy and how a TAFTA for investment flows is to be evaluated. The paper argues to include a transatlantic effort for deeper integration into the WTO framework.