For several years US and EU leaders have been wrangling over how to boost economic growth and competitiveness on both sides of the Atlantic. Since 2013, working groups have been trying to come to a position of unanimity over how this might be achieved. The Transatlantic Trade and Investment Partnership (TTIP) was set up as an arrangement that would, at its most basic, cut tariffs and regulatory barriers to trade between the US and EU states, so that each could more easily access the other’s markets.
But proponents and opposition have been strong on both sides for all sorts of reasons. Some of the arguments of proponents include: a decline in or removal of international tariffs on trade; low or non-existent import duties would boost trade in popular goods and smaller businesses would be more inclined to trade abroad with a relaxation of regulations. Some restrictions on certain markets (like the food and drink) would be opened up. Tens of Billions, it is claimed could be added to the EU and US coffers.
But questions arise over the different regulations in different regions, for example on testing standards, whether that be for drugs or machinery, and safety standards for food or even clothing. The TTIP claims it would reduce the costs of testing by introducing common standards for example, and then make trading easier/cheaper for smaller firms. Negotiations continue over such matters, including how to resolve disputes, be that between inter-state investors, or firms suing foreign governments for their interpretation of unfair treatment — one example in the UK being (allegedly) how private firms with NHS contracts might be able to sue the government if it took that service away from them and reinstated it in the public sector.
Opposition concerns include primarily the reduction in regulations (not just tariffs), especially pertaining to food safety, toxic chemicals, digital privacy, labour rights, and their indirect effects on social standards and the environment. A major concern is the opening up of government procurement contracts to competition from large trans-national companies, and the possible privatisation of some public sectors like health and education.
People have been taking to the streets in some countries, concerned that the measures will diminish the power of governments to act in the interests of their people, and worried about how much discussion is outside the public domain, with very little transparency. Frankly it’s a tangle: in France, the junior trade minister has threatened to completely pull his country’s involvement, and in Spain, Brussels and Germany citizens have taken to the streets over previous months.
The agreement could create the world’s biggest free-trade pact, accounting for large shares of world trade and global GDP. But after more than two years and 10 rounds of discussions, negotiations go round and round, with no immediate conclusion in sight. Brussels and Washington had envisioned the end of 2015 to arrive at completion of negotiations, but with US presidential elections coming up in 2016, yet another delay is foreseen.
We’ve reported on much of the activity since Public Spend Matters launched, mostly from a European perspective. So we thought readers who are interested might wish to know about the upcoming US conference hosted by the Cato Institute “Will the TTIP Live Up to Its Promise?” The Cato Institute is a US “public policy research organization (think tank) dedicated to the principles of individual liberty, limited government, free markets and peace.” The event, which will be discussed by more than 30 trade experts from around the world, will take place in Washington on October 12th and will be available to watch live online at www.cato.org/live.
The conference will open with a keynote from Shawn Donnan of the Financial Times then cover a lot of the burning issues around: “what exactly is under negotiation? what is the strategy for advancing those negotiations? would it make sense to exclude sacred-cow issues that will only bog down the negotiations? Is it wise to continue pursuing a single comprehensive deal for all issues on the table, or is it better to aim for a sequence of smaller agreements? Should a deal include other closely integrated countries, such as Canada, Mexico, and Turkey?”
Main discussions will be on: what is at stake, how to find the path to success, the effect on the multilateral trading system, strategies for navigating EU and US domestic politics, security implications, regulatory coherence, understanding economic models and the estimates they produce. And some of the debaters include representatives from prominent US Universities and institutes, the German Development Institute, U.S. Chamber of Commerce, International Center for Trade and Sustainable Development, Organization for International Investment, Delegation of the European Union to the United States, Council on Foreign Relations, HEC Paris & NYU Law, Swedish Board of Trade, ECIPE, the list goes on.
It sounds like it is going to be an interesting discussion – whatever side of the fence you sit on.