TTIP: Good for the EU, Good for the U.S.
The independent consultant carrying out a sustainability impact assessment (SIA) for the European Commission (EC) on the trade agreement being negotiated between the EU and the United States published its draft interim report last week.
The technical report highlights the opportunities that a Transatlantic Trade and Investment Partnership (TTIP) could create for people and businesses across Europe. The work is being conducted by Ecorys, in a process involving wide consultation with stakeholders.
The 400-page report indicates that all member states’ economies would grow as a result of a new trade agreement. The study also predicts that EU exports to the U.S. would rise by 27 percent and a mix of social indicators shows a combined benefit both for European and U.S. citizens.
The report also goes beyond the numbers to look in detail at the social and environmental impact that TTIP could have.
“This is a snapshot based on assumptions about a future TTIP deal,” commented EU Trade Commissioner Cecilia Malmström in a blog post. “Needless to say, being a draft version to now be scrutinized by stakeholders and others, this assessment should be taken with a pinch of salt. The economic analysis is based on modeling, with many assumptions and caveats. We should thus be cautious when analyzing numbers, especially when it comes to things like market data that may depend on many other factors.”
Malmström went on to say that the report does highlight the many opportunities TTIP presents for the EU. “One particular thing that cannot be scientifically captured in any study is the impact of TTIP on Europe’s ability to shape globalization according to its own standards,” she wrote. “Modern trade agreements are one of the tools at our disposal to shape globalization, making it more responsible. With this in mind, both TTIP as well as our trade agreement with Canada (CETA) aim to include progressive chapters on sustainable development, including on labor rights and the environment.”
According to the report, “TTIP is the largest bilateral trade and investment agreement ever to be negotiated. It will be a unique agreement where traditional tariff liberalization is complemented by significant commitments on regulatory cooperation and a joint rules-based framework for bilateral trade and investment.”
In scenarios discussed in the report, TTIP will eliminate 98 to 100 percent of tariffs and 10 to 25 percent of non-tariff barriers (NTB) on both goods and services. Twenty-five percent to 50 percent of procurement NTBs will also be eliminated.
The expected economic impacts from the TTIP, according to the report is an increase in GDP of 0.5 percent for the EU and 0.4 percent for the U.S. Wages for both high- and low-skilled workers are expected to increase in both economies as will exports and imports. EU exports are projected to increase by 8.2 percent and U.S. exports by 11.3 percent. EU imports will increase by 7.4 percent and U.S. imports by 4.6 percent.
Bilateral trade is expected to increase significantly from its already high level, with an increase of 27 percent of EU exports to the U.S. and a 35.7 percent increase in U.S. exports to the EU.
In the EU, the leather, textiles and clothing, motor vehicles, beverages and tobacco, water transportation, and insurance sectors are expected to be the biggest beneficiaries of the TTIP.