The Transatlantic Trade and Investment partnership represents a U.S. and European agreement for mutual trade and investment. In essence it is a free trade deal that the two economic superpowers are working to ratify. The two parties began the initiative in the June of 2013 G8 meeting. U.S. President Obama, European Commission President Barroso, and European Union Council President Van Rompuy introduced the idea and began working on the project.
The goal of the TTIP is to encourage both trade and investment. Governments on both sides believe that this will result in more economic growth and jobs for citizens of both sides of the Atlantic Ocean. Negotiations have been complex and mostly held in secret. The U.S. side is headed by the USTR, or Office of the United States Trade Representative. The Europeans are led by the European Commission. This EC handles negotiations for all 28 EU member countries.
TTIP turns out to be the largest and grandest vision for a trade agreement that has ever been attempted. This is because the United States and European Union economic blocks make up nearly fifty percent of the GDP of the entire world. The impacts on trade are expected to be substantial. Small to medium sized enterprises will gain several benefits in access to the new markets. They will have other countries to which they can export. They will also gain the ability to import input materials from other countries. It is anticipated they will have the ability to gain investments in their businesses at a cheaper, better price as well.
Consumers are supposed to benefit also. Lower prices are expected in both economic blocks because of the reduced tariffs and increased competition. This will improve the purchasing power of residents on both sides of the Atlantic and also help to create more jobs.
Twenty-four different chapters comprise the actual Transatlantic Trade and Investment Partnership. These have been divided into three principal topics. The topics are Market Access, Rules, and Regulatory Cooperation.
Market Access pertains to opening up markets. The goal is to allow for improved competition. Besides this, the architects of the agreement are trying to make it easier for products to flow back and forth across the Atlantic.
The rules section has to do with trade and investment. This area’s goal is to increase the fairness and ease of importing, exporting, and investing for American businesses in Europe and European businesses in America. Rules cover a number of different important concepts. These include Energy and Raw Materials, Sustainable Development, Small and Medium Sized Enterprises, Customs and Trade Facilitation, Competition, Investment Protection, Geographical Indications, Intellectual Property, and the Government to Government Dispute Settlements.
The area of Regulatory Cooperation pertains to important regulation differences between the United States and the European Union. Both groups often have the same quality and safety levels that they insist on from specific goods. The problem is that each side employs its own procedures in considering the identical product. This imposes high costs on companies who produce the items. It can be prohibitively expensive for smaller to medium sized businesses.
There have been a number of objections raised by protestors to this free trade agreement, particularly in Europe. Many individuals on both sides of the Atlantic oppose the secrecy that surrounds the negotiations. The protesters have concerns that interest groups are creating special rules for larger companies.
The European labor markets are worried that their working conditions and benefits will suffer. Environmental groups are all concerned that environmental standards and safeties that are higher in Europe will be watered down as a result of the free trade initiative.
The term 'Transatlantic Trade Investment Partnership (TTIP)' is included in the Economics edition of the Financial Dictionary. You can get your copy on amazon in Kindle or Paperback version. See more details here.