Negotiations between the United States and European Union on a comprehensive trade and investment partnership have entered their final phase, with both sides indicating that a framework agreement could be reached within the coming months. The deal would create the world’s largest free trade zone, covering nearly 45% of global GDP.

Key sticking points have included agricultural market access, digital trade rules, and the treatment of state-owned enterprises. Progress has been made on a mutual recognition framework for technical standards, which would eliminate a significant source of non-tariff barriers for manufactured goods.

The agreement is expected to include innovative provisions on carbon border adjustment mechanisms, reflecting both parties’ commitments to climate goals while addressing concerns about carbon leakage and competitive disadvantages for domestic industries.

Business groups on both sides of the Atlantic have expressed cautious optimism, noting that even a partial agreement could unlock billions in trade and investment flows.