The Pros and Cons of TTIP

Nye Longman
- Leadership - Aug 19, 2015

The Pros and Cons of TTIP

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The Transatlantic Trade and Investment Partnership (TTIP) has received significant backlash on social media and has attracted the wroth of both politicians and journalists, but is this fully justified?

In short, the deal aims to make it easier for the US and EU to trade through the removal of tariffs and the harmonisation of legislative regulations.

In order to shed some light on the question, we explore the pros and cons of the trade deal.

PROs:

Increased GDP

TTIP has the potential to boost the GDP of each economy by 0.5 percent, with the potential to make every citizen in Europe €545 better off per year, although this is an optimistic calculation.

Ease of doing business

Removing barriers and harmonising regulations and standards between the EU and US will make it easier for trade to occur between the two, making the market freer. US car manufacturers will not need to make modifications before selling to EU countries, reducing costs and time to market.  

New trade opportunities

Products typically restricted by protectionist trade barriers will be free to be sold in completely new markets which could enable businesses to grow significantly.

Global standards

Together, the US and EU represent 60 percent of global GDP; if these nations’ standards were unified, then other nations around the world could be encouraged to raise their own.

RELATED: World Business Report: US-EU trade talks

CONs:

Lowering standards

There is a perception that Europe is ahead of the US in terms of many of its standards and it is feared that harmonisation could remove these. For example, the EU has pushed to remove checks at ports for imports and exports, which has the potential to harm food safety standards.

Investor-State Dispute Settlement

ISDS has been seen by many as a direct attack on democratically elected governments, since it gives businesses the power to sue governments if policies directly affect their profits.  

Lack of transparency

Much of the TTIP talks have been conducted in private between government officials and business leaders which, at least for some, feels disingenuous and anti-democratic.

“Cornish pasties from Colorado”

Producers of regionally-based foods have voiced concerns that their products will be undermined by cheap foreign competitors; this also has the potential to dilute the cultural heritage of regions famous for their food.

SOURCE: (Guardian)

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