Dear Readers,
The TTIP deal has been creating a lot of
buzz recently and could be a crucial topic for your exam.
The Transatlantic Trade and Investment
Partnership (TTIP) is a proposed free trade agreement between the European Union
(EU) and the United States of America. Since this deal will cover the two biggest economies of the world, it is important to have a good understanding of this
pact.
Background – What is TTIP?
·
Considered
to be a companion agreement to the Trans Pacific Partnership (TPP), the TTIP is
fundamentally a pact to slash tariffs and similar regulatory barriers between
the US and the EU member countries.
·
According
to the Office of the United States Trade Representative, the TTIP is “an
ambitious, comprehensive, and high-standard trade and investment agreement
being negotiated between the United States and the European Union (EU).”
·
In
the November 2011 EU-US summit, the leaders formed a working group to come up
with ways to boost competitiveness and growth. This became more important since
the prior Doha meet did not see any substantial progress over matters of
economic stagnation.
·
In
February 2013, this working group suggested a “comprehensive” bilateral trade
agreement, which was later developed into the TTIP.
·
In
June 2013, the negotiations for TTIP were launched and later in July, first
round of negotiations began. Twenty-four working groups were established and
each of them represented a policy or trade area.
·
In
January 2014, the European Commission declared freeze of the negotiations in
the investment sector of the TTIP.
·
In
September 2014, outgoing trade commissioner of the EU, Karel De Gucht expressed
concerns over the TTIP not being finalized by its 2015 deadline and predicted
that the 2016 US Presidential Election might further push it back.
Objectives
·
To
create the world’s largest free trade zone, covering the north Atlantic, and to
generate several million employment opportunities in exports sector and make
products and services cheaper.
·
To
eliminate tariff barriers – control cross-border trade barriers to zero and
other non-tariff restrictions by 25-50 per cent.
·
To
create opportunities for American families, farmers, workers, enterprises and
ranchers with the help of more access to European markets for goods and
services which are made in America.
·
To
remove discrimination against foreign investors, refusal to give access to
courts, expropriation and arbitrary and abusive treatment.
·
To
propagate better compatibility and transparency in regulations pertaining to
trade and investment, while maintaining good levels of health and safety. It
will also strengthen the ties between important strategic and economic
partners.
Arguments
in favour of the TTIP
·
According
to the British government, the TTIP could add £10 billion to the UK economy,
£80 billion to the US and £100 billion to the EU per year. It also claims that
lifting the EU import tariffs on popular commodities like denims and cars could
benefit the shoppers.
·
It
is also said that lesser regulations would help UK enterprises to export to the
US, and this will be especially advantageous to small and upcoming businesses.
·
Supporters
claim that TTIP will help in opening up restrictive markets, for instance,
British lamb and venison is currently not allowed to be exported to the US and
the TTIP might remove this regulation.
·
English
Prime Minister David Cameron says that TTIP is key to his vision of a reformed
and competitive Europe.
Criticism
of the TTIP
·
Several campaigners
have said that the TTIP might be a threat to European democracy, and over 3
million people in Europe have signed an online petition against it.
·
A major concern is its
impact on the National Health Service (NHS). The TTIP aims to make Europe’s
public health, water and education services open to American firms, which would
lead to privatization of the NHS. This is primarily why British MPs on the
all-party business, innovations and skills committee have condemned the
government’s support for TTIP.
·
Another important feature of concern would be
the Investor State Dispute Settlement (ISDS), provisions pertaining to which
has been part of several trade agreements since the 1980s. The ISDS means that
private investors can ask a tribunal of international arbitrators to judge
whether a government has given them fair treatment, and can receive
compensation. If the ISDS provision becomes a part of the deal, it would
theoretically permit private investors to sue governments.
·
TTIP’s agenda on
“regulatory convergence” will look at bringing the EU and American food
standards on food safety as close as possible. This could be a threat as food
regulations in the US are relatively less strict, for example, 70 per cent of all
the processed foods available in the American stores now contain Genetically
Modified (GM) components. The EU, on the other hand, does not allow virtually
any GM foods.
·
Similar impact would
be seen on food safety and the related laws. According to rules in Europe, a
substance has to be proven safe before it can be used and in the USA, any
substance can be used until proven unsafe. As a testimony to these principles,
the EU currently bans 1,200 substances in cosmetics, and the US has banned only
12. When the TTIP is implemented, the EU will have to relax these laws or the
US will have to toughen them.
·
It will also have a
significant effect on the banking sector, especially that of the USA. After the
financial crisis, the American government imposed strict rules and regulations
on the banks so as to restrict their authority. Since the rules in Britain are
much more relaxed, the USA might have to loosen its hold on the banks, which
might be a threat to their economy.
These are some of the major points in the Transatlantic Trade
and Investment Partnership. If you are able to understand these, you will be
able to attempt the questions on this topic with greater ease.
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