David Cameron stated he intends to put ‘rocket boosters’ behind plans for an EU-US free trade deal while speaking at the G20 summit in Brisbane, Australia. The Prime Minister was referring to the Transatlantic Trade and Investment Partnership (TTIP) which according to the European Commission (EC), ‘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’.
The relationship between the EU and US has been relatively stable, with the occasional difference in foreign policy such as with the Iraq war. However this trade relationship is considered to be one of the biggest in the world. The European Commission states that it believes that every day, there is trade in goods and services worth €2 billion between the EU and US.
A key element to TTIP might be the easing regulations which create increased costs for companies that wish to trade in both the EU and the US. In practice, TTIP might look to make regulations between the EU and US much more compatible to create a more efficient business environment. Key examples such as car safety and chemicals where both countries have regulations to meet safety, although meeting the two different sets of regulations and tests may cost companies a significant amount. This may increase business between the two regions and create jobs in both environments.
Furthermore, according to the European Commission’s report on Transatlantic Trade and Investment Partnership: The Regulatory Part, a key aspect to the plan aims to make developing industries such as electric cars as efficient as possible by coordinating regulations.
The economic benefits to TTIP are being championed by both the US and EU leaders with David Cameron putting his support behind the plan. The European Commission believes that the ‘average EU household’ may ‘gain €545’ and with TTIP in place it might aim to boost GDP by 0.5% or €120 billion. With the EU being challenged by political parties within membership states, advocating leaving the union there may seem to be political sense in attempting to boost the economic benefits of TTIP as an incentive to retain membership.
Environmentally, organisations such as War on Want challenge TTIP as it may see key regulations such as those on the use of chemical by-products changed. The executive of the organisation writes in his booklet The Transatlantic Trade and Investment Partnership that, ‘The Commission states that its preferred outcome from TTIP will add an extra 11 million metric tons of CO2 to the atmosphere.’ It may seem that the main challenge that TTIP may face might be the perceived environmental effects that it may have on emissions.
Politically, the plan may bring the US and EU closer together and equally strengthen the cause of pro-EU parties. The possibility that TTIP might create a more robust economy for the EU by driving new industries and opening markets to businesses, thereby creating jobs, might affect the cause of political parties such as UKIP in the UK. Furthermore, potentially it may make political situations and decisions in the US much more important for EU citizens and vice versa. ncreased competition in marketplaces is seen to maximise efficiency and create a better environment for the consumer, with companies continually looking for an effective edge over their competitor’s goods or services.
Despite renewed emphasis in support of TTIP by David Cameron, it may seem that the European Commission is expecting the talks to continue for a few years. Therefore, it is a plan with the future in mind. Protests across the EU and within the UK about the possible effects to the NHS highlight that the plan may be challenged by public opinion. The plan aims to be passed by the European Parliament, all EU member states and the US Congress. Therefore, there may still be challenges to it being implemented by the EU and US within the democratic process. Although, the increased momentum is an inclination that it may be seen as a popular policy amongst those involved.
What productive changes might the EU-US free trade deal mean to citizens of the EU and US?