Transatlantic Trade And Investment Partnership Case Analysis

The European Union (EU) and the United States of America (US) have been officially negotiating the Transatlantic Trade and Investment Partnership (TTIP) since July 2013. It proposes the establishment of a common free trade area with the objective of facilitate business across the Atlantic through the elimination of tariffs and the harmonization of regulatory standards. This agreement would be unprecedented in terms of dimension, with the creation a free trade area representing nearly half of the global economic output with only 11.8 percent of the population and could bring wealth and employment to both parts of the Atlantic. However, it also created a huge opposition movement that claims that those benefits would only be possible with major
This is a drawback in the defense of TTIP because, since the United States and Europe already have similar cost and production structures, as well as low tariffs and cross-border barriers to trade (Diekman, 2013; Erixon and Bauer, 2010) the main economic impacts would arise from lowering non-tariff-barriers to trade (see annex 2). The problem lies on the fact that these are the hardest to achieve trough negotiations, meaning that in order to conclude whether TTIP is beneficial or not for Europe we have to assume a “best-case scenario” on negotiations regarding non-tariff barriers that some consider impossible to reach (Baker,
This is especially because it would bring economic growth and welfare to the region in a crucial phase of its existence, given the recent economic crisis and also due to geopolitical reasons. With the TTIP European consumers would obtain access to a larger market job and to a wide range of higher-quality products at lower prices and at the same time companies would also benefit from the access to a giant market, which could boost competitiveness and innovation. Furthermore, advantages would extend to politics as the TTIP could contribute to political union and stability within the EU. Besides that, an agreement of this dimension would put Europe in a leading role trade-wise, while its failure could mean a shift in power towards the Asia-Pacific region since the US are also negotiating the TTP. Two important aspects must be verified in order to take that these conclusions, though. First, that an ambitious agreement with the elimination of tariffs and harmonization of several standards is possible. Although difficult this is certainly achievable since the two economic blocs already have strong mutual investment positions, a high level of cultural proximity and deep po¬litical connections which could facilitate negotiations. And finally, the EU must be able to deal carefully with the ISDS provisions and to protect the member states regarding the disputes. If these two are