Answers on TTIP – Transatlantic Trade and Investment Partnership

 

 

 

 

 

 

 

 

What is TTIP all about?

TTIP is focused on cutting tariffs and regulatory barriers which currently prevent companies from each side of the Atlantic from trading in the others market.
This will be accomplished in 4 areas:

1.1Eliminating almost all tariffs (taxes applied only to imported goods) on trade between the US and the EU.

2. The US & EU recognising each standard’s on product quality and consumer safety. And work more closely on harmonising regulations and/or creating transatlantic standards for products.

3. Producing rules prohibiting the discrimination of transatlantic Investors.

4. Creating a tribunal system called Investor State Dispute Settlement (ISDS) which could award compensation to an organisation if they had lost money as a result of a breach of the rules. An organisation can take a case against a government if it feels that the government has created laws which will reduce its ability to trade.

What about Reducing Regulatory barriers?

Apart from seeking a reduction of trade duties, the major focus of TTIP is on the removal of non-tariff barriers which mainly involves having regulatory co-operation between both sides.

The EU and USA have different product standards in relation to quality and safety. Even though both sides’ standards achieve the same level of consumer safety and product quality, they may differ in their technical details and their methods for ensuring that firms have met the rules.

The removal of these non-tariff barriers is actually predicted to provide bigger gains to businesses by reducing the high regulatory cost of trade. Complying with regulations involves a cost. A firm that wants to export may incur further costs by having to make their products conform and meet the regulatory requirements of the country it’s selling into.

Industries which would benefit from TTIP include automotive, chemicals, clothing, drink, energy, finance, food and pharmaceuticals.

How will TTIP benefit the average family?

According to the Centre for Economic Policy Research (CEPR), the estimated the potential gains for the EU could up to €119bn ($130bn) a year and €95bn ($104bn) for the US.
They also estimate a rise on wages by 0.5% in the EU and 0.4% in the US. For a family of 4 people that would equate to an increase of €545 in the EU and €655 in the US.

Why is there opposition and controversy to TTIP?

There is a lot of opposition to TTIP in the following areas:

1. Regulation
There would be a reduction in consumer safety and product standards issued. This is often referred to as “downward harmonisation”.
The Europeans also fear that the ability for government’s right to regulate on behalf of the public will be overrun by businesses and other vested interests.

2. Economic Benefits
Some commentators are disputing the monetary and economic values that are being used by the pro TTIP campaigners; some even say that the EU could suffer major job losses if TTIP goes through.

3. Investor State Dispute Settlement (ISDS)
It is believed that governments may be prevented from regulating in the public interest if an Investor State Dispute Settlement (ISDS) system has been established. One example to prove this point is when the Australian Government brought in rules on the packaging of tobacco products the American Tobacco Company Philip Morris took a claim against them to the ISDS.

Others say that under ISDS governments will lose the ability to reverse any arrangements to contract services out to private suppliers and bring these services back into the public sector.

4. Food Standards
Compared to the US the EU has much stricter regulations on GM crops, food additives and pesticide use. Some people fear that the EU could be swamped with food of a lower standard. They also fear that governments could be bullied into dropping legislation to improve food standards by organisations threatening to bring a case against them to the ISDS.

What is the timeline for completion?

It was expected to have an agreement on TTIP by the end of 2015. However talks have dragged and there is alot of dispute on ISDS within the EU. Goodada will keep you updated on progress through its blogs.