Transatlantic Trade and Investment Partnership (TTIP)

According to the Guardian, "rarely has a trade agreement invited such hype and paranoia". The Transatlantic Trade and Investment Partnership (TTIP) – or proposed free trade pact between the US and the European Union – has triggered apocalyptic prophecies: the death of French culture; an invasion of toxic chlorine chickens into Germany; and Britain’s cherished NHS will become a stripped-down Medicare clone.From the point of view of free-trade cheerleaders, EU carmakers will more than double their sales, Europe will be seized by a jobs and growth bonanza and Americans will beg European firms to build their roads and schools. The world’s biggest trading nations will have no choice but to play by the west’s rules in the new world created by TTIP.Sounds like a good place for an investigation into rival views – trade liberalisation or protectionism – which is best?

According to the European Commission, TTIP aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US. On top of cutting tariffs across all sectors, the EU and the US want to tackle barriers behind the customs border – such as differences in technical regulations, standards and approval procedures. These often cost unnecessary time and money for companies who want to sell their products on both markets. For example, when a car is approved as safe in the EU, it has to undergo a new approval procedure in the US even though the safety standards are similar. The TTIP negotiations will also look at opening both markets for services, investment, and public procurement. They could also shape global rules on trade.

The Guardian goes on to explain that the easy bit will be the removal of tariffs and duties on goods which only amount to 3% of their aggregate value. Eighty percent of the perceived benefits would come from a breakthrough on non-tariff barriers, which could usher in the harmonisation of transatlantic standards and regulations on everything from food labelling and drugs-testing to the manufacture of cars or electrical components.

Why the resistance from a hostile European public? Opposition is strongest in Germany, Austria and France. The European slump and currency crisis of the last five years has sapped confidence in governing elites, sown fear of globalisation, and a mistrust of the corporate world and marauding, tax-avoiding multinationals. The biggest issue in the talks and the focus of the growing opposition to the pact is the system known as investor-state dispute settlement (ISDS). For the critics, this amounts to a surrender of national political sovereignty to the deep-pocketed multinationals, with business, not government, setting the rules of international trade. But ISDS isn’t new and has existed for almost half a century, and there are 9,000 such agreements operating globally, 1,400 of them in the EU already.

The Economist also covers the story, adding that there is worry on the American side. TTIP is less of a priority for the Obama administration than the Trans-Pacific Partnership, a free-trade deal it is pursuing with 11 Asian-Pacific countries. Globalisation seems to be coming back to life. Trading Blocs are growing and deepening around the world.