G8 Trade deal....overstated?

Issue

President Obama, in conjunction with British PM David Cameron have announced that they will begin first round of negotiations of a bilateral trade agreement between the EU and the US. and that this will be the biggest trade agreement EVER. (link here)

Nitty-Gritty
um.... NAFTA? CAFTA-DR? ASEAN FTA (AFTA)? and those are just recent multi-lateral trade agreements. I get that if we treat the EU as one "entity" (Check back in 10 years after Germany has to deal with another decade of sloth and fiscal irresponsibility coming out of places such as Greece and Portugal), it may be the biggest "bilateral"... but we are really splitting hairs at this point. Some big showmanship by Obama may have been needed after the Syria invasion talks and NSA leaks last week and the EU may need this chip to gain a better bargaining position with China over the solar panels, but thats a little to Macro for this blog.

Take-Away
1)  If you are trading back and forth between Europe and the U.S., this could signal lower tariffs and a simplification of negotiations over who pays the VAT and what goods become VAT-exempted  (especially for the UK) as well as finally giving US-EU the accord advantage in trade it really needs to have a fighting shot against BRIC and MIST countries from economically relegating these OECD powers.  Do note that most of the countries in this trade agreement have shifted primarily away from manufacturing as a boon for their economies and have moved more towards a financial/banking/services/consumption model. So expect the customs compliance portion of the agreement to have a waning relevancy in global trade barring unforeseen developments.

2) Echoing my previous post on the TPP, these agreements take years. CAFTA-DR has been the poster child for stagnant, constipated trade agreement negotiations.  TPP is five years in the making with no sign of wrapping up before Obama leaves office. Given the political diversity of the parties in the agreement, I wouldn't factor this one into any five year business assessment plan. One need only to look at UN security council votes on anything to realize France rarely aligns with the US-UK-Spain voting bloc, whilst Germany and Italy continually face off over a myriad of EU issues from immigration to currency and ECB lending (though Merkel seems to be able to quell much of that strife) to realize that there are many embedded issues  to work around before negotiations can truly become meaningful.

3) CURRENCY/FX One final note- expect in the short term that this announcement will probably stabilize a higher USD/EUR, other factors (ehmm, AUDUSD) aside. This will be viewed as a win for the U.S. finally breaking through some restrictions that kept the dollar second fiddle in valuation and a sign that the EUR may more interchangeable as a reserve, given MFN treatment or preferential partnership access. Please don't overweight the Macro in favor of chartist theories if you are trading spot, but simply use this news as another bimodal time period trendline for the next two days and then for the week surrounding the start of negotiations in DC.  This may be worth a .5% weighting if you are playing some sort of 3 year futures swap to hedge against rising shipping costs, but a straight call or buy here is worth a look given the right calculation of the Greeks in your models.