The Transatlantic Trade and Investment Partnership (TTIP) is a series of trade negotiations that seem to have been going on between the EU and the USA since the time of JFK and de Gaulle – but actually it is only three years or so.
TTIP is about harmonising the global approach and reducing the regulatory barriers to trade, which includes things like food safety law, environmental legislation, and banking regulations. Those in favour point out that free trade has always had a positive effect on the global economy, and TTIP is just the latest in a long line of initiatives with that goal. Those who are against see it as a gain purely for big businesses, who with TTIP in place will be able to override the will of national governments, consumers and citizens.
There are also more specific objections in certain areas. There have been worries in the UK that it might force the government to open up competition for areas that are largely provided within the state sector at the moment. Being forced to open up public health contracts could threaten the whole basis of the National Health Service, say the critics. Proponents of TTIP say it will not cover this type of public services.
Europe has also had concerns about the lighter touch regulations generally followed in the USA in the field of food and environmental safety. Would TTIP mean genetically modified foodstuffs hitting our supermarket shelves?
And in the US, both aspiring Presidents Bernie Sanders and Donald Trump have expressed concerns about TTIP. Although they apparently come from different ends of the political spectrum, both are concerned that TTIP could see American jobs disappearing offshore.
But now, as David Lawder writes on the Reuters website in an interesting article, the UK exit from the EU might derail the TTIP project completely. It was already looking doubtful that the deal could be completed before President Obama leaves office in January 2017; the UK situation could now make that virtually impossible, as discussions about Brexit take centre stage in the EU. The UK was also seen as one of the more liberal nations in terms of trade. As Lawder writes:
Britain’s departure could leave U.S. negotiators facing a European side that is more dug-in on some issues, said Chad Bown, a senior fellow at the Peterson Institute for International Economics, a think tank in Washington.
“As the UK is part of the coalition of liberal trading economies in the EU, the U.S. is losing one of the more like-minded countries from the group in Brussels sitting on the other side of the negotiating table,” said Bown, a former World Bank economist.
On the other hand, the UK going takes away one of the contentious areas of argument, around financial services, where the UK was the main blocker. But experts suggest there are still another 20 or so issues of similar complexity that need to be resolved, including agriculture and food safety rules. It also seems that the US is not keen to open up public procurement: here is Lawder again.
European negotiators have complained that the United States has offered too little to open up its vast federal, state and local government procurement markets to European vendors with “Buy American” preferences in place. Europe also wants access to key U.S. sectors such as maritime transport and aviation, while American negotiators have been frustrated over lack of access to some 200 European sectors ranging from healthcare to education.
The odds seem very much against an agreement this year now, so we will have to see how President Trump or President Clinton (she has been a little more positive about TTIP than Sanders or Trump) feel in 2017, and see what state the EU is in by then. Presumably, the UK would no longer be part of TTIP, and would be negotiating its own deal with the USA. If TTIP is anything to go by, that could take some considerable time too.