But what is this agreement, and how could it affect us in terms of international trade?
Let’s start at the beginning. The Transatlantic Trade and Investment Partnership (TTIP) or Transatlantic Free Trade Area (TAFTA) is a proposed free trade agreement (FTA) between the European Union and the United States, with the fundamental aim of eliminating barriers that hinder trade and investment, thus establishing the so-called Transatlantic Free Trade Area. It is based on the idea that current international trade policies must be made more dynamic in order to bring the world out of this alarming economic crisis, since tariff and geopolitical policies are still hindering economic growth.
In general, it is believed that the future application of this agreement will considerably increase international trade, leading to the creation of new companies and, consequently, the jobs desired.
However, it doesn’t go unnoticed that the intention is to create a union of northern countries to compete with new powers such as China, India, Brazil and Russia. Of course, with the difference that we would combine the dogma of capitalism, i.e. maximizing benefits for economic growth, with the principles of the social economy (respect for human rights, consumer protection and environmental concerns). There is little value in growth at the expense of lowering the standards we’ve worked so hard to achieve in Europe in terms of labor rights and environmental protection.
What does the Transatlantic Trade and Investment Partnership (TTIP) consist of?
The agreement focuses on three main areas in terms of trade and investment.
First, in order to ensure market access for goods, services and public procurement, the proposed free trade agreement includes the elimination of tariffs on bilateral trade, with the aim of achieving a high level of liberalization in terms of services and investments. In addition, another priority of the agreement is to establish a true transatlantic public procurement market, so that companies on both sides of the Atlantic can compete on equal terms.
The second area deals with essential regulatory aspects such as technical standards and sanitary and phytosanitary measures. The agreement pays special attention to harmonization of the various regulations on both sides of the Atlantic that, on numerous occasions, result in excessive costs and loss of competitiveness.
Finally, the agreement establishes a set of global rules on intellectual property to ensure greater protection in a diverse range of areas that includes sustainable development, SMEs, competition and energy trade.
How will the TTIP affect us, and what is the current state of the negotiations?
Last January, the Institute for Economic Studies (IEE) published research addressing the impact that signing the Transatlantic Trade and Investment Partnership (TTIP) with the United States will have on Spain. The main conclusions of this report indicate that over a period of 3 to 5 years, the TTIP would lead to an annual increase in wages and private consumption for Spain, in addition to encouraging the creation of new jobs.
Other studies that also show the TTIP having positive results for Spain are Reducing Transatlantic Barriers for Trade and Investment by the Centre for Economic Policy Research (CEPR) from March 2013, and Transatlantic Trade and Investment Partnership by the Bertelsmann Foundation (a think tank with over 20 years of experience in Spain) from June 2013.
Since the launch of the initiative, there have been no less than 13 rounds of negotiations on the TTIP. The last round took place in New York at the end of April, and a new round is expected to take place before summer.
However, there are numerous detractors who believe that implementation of this agreement would increase the power of large businesses and market deregulation; and as a result, would decrease levels of social and environmental protection in the signatory states.
We hope that this agreement doesn’t end up fulfilling the old adage “the road to hell is paved with good intentions”.
We’ll see what the future holds for us.