At the G8 summit in Northern Ireland, leaders have announced the launch of negotiations for a Transatlantic Trade and Investment Partnership between the United States and Europe. The first round of talks will take place on 8th July 2013 in Washington, D.C..
David Cameron, the UK Prime Minister, hailed the project as potentially the “biggest trade deal in history”. He said that the deal could add £100 billion to the EU economy, £80 billion to the US economy, £85 billion to the rest of the world’s economy and 2 million new jobs overall.
The aims of the T-TIP include:
- Opening EU markets to the US – increasing the $458 billion in goods and private services the United States exported in 2012 to the EU.
- Strengthening rules-based investment to grow the world’s largest investment relationship. The United States and the EU already maintain a total of nearly $3.7 trillion in investment in each other’s economies (as of 2011).
- To eliminate all tariffs on trade.
- Tackling costly “behind the border” non-tariff barriers that impede the flow of goods, including agricultural goods.
- Obtaining improved market access on trade in services.
- Significantly reduce the cost of differences in regulations and standards by promoting greater compatibility, transparency, and cooperation, while maintaining our high levels of health, safety, and environmental protection.
- Develop rules, principles, and new modes of cooperation on issues of global concern, including intellectual property and market-based disciplines addressing state-owned enterprises and discriminatory localization barriers to trade.
- Promote the global competitiveness of small- and medium-sized enterprises.
The T-TIP deal was first discussed in Camp David at the previous G8 summit and was mentioned in President Obama’s State of the Union Address in February.
European Council President Van Rompuy and European Commission President Barroso issued a joint statement on the partnership on Tuesday 18th June:
“A successful conclusion of the negotiations would provide significant economic benefits. An agreement would boost EU-US trade in goods and services by almost 120 billion euro annually, or 160 billion USD. It’s a boost worth 0.5% of GDP. The launch of negotiations is a sign of strong political will on both sides to work together for the same shared objectives: growth, jobs and prosperity, in an open and rules-based world. This would not only benefit the European Union and the United States but also the rest of the world in economic terms and beyond.”
Given the large numbers of treaties and regulations which would be equalized, altered or replaced by T-TIP, the project will require a significant amount of political will and support from business. Scott Davis, Chairman and CEO of logistics giant UPS, was vocal in welcoming news of the negotiations:
“UPS applauds the United States and European Union on coming together to launch negotiations of the Transatlantic Trade and Investment Partnership (TTIP) that will truly be a game changer to the recovery of the global economy.
“I have talked to political leaders in Brussels and Washington, D.C. and based on recent conversations, I believe there is momentum and good will to move this agreement forward. The successful negotiation of the TTIP would open up new dynamic trade opportunities for small, medium, and large enterprises on both sides of the Atlantic, while boosting exports and creating new jobs. At UPS alone, we estimate that an ambitious and successful TTIP, which moves beyond tariff barriers to encompass a broad range of non-tariff, regulatory and supply chain barriers to trade could boost our trading volume by 131 million packages and support 24,000 jobs over 10 years.
“The U.S. and the 27 EU member states share a common outlook and a similar determination to maintain open markets and benefit from liberalized services trade regimes. As the world’s largest economic relationship, it accounted for $5.3 trillion in investment and trade in 2011. U.S.-EU services trade accounted for $300 billion, one-third of total U.S. services trade, and nearly 10 percent of all world services trade. At this critical point in the global economic recovery, it is essential that the U.S. and EU continue to be leaders in setting the standard for the global market.
“UPS is excited about the possibilities of what a U.S.-EU free trade agreement means to our customers and how it will improve the position of our economies in the global marketplace.
“TTIP like the Trans-Pacific Partnership (TPP) and the Trade in Services Agreement (TISA) is an important opportunity to break down barriers and encourage the economic growth and jobs that come with increased trade.”
In reality, T-TIP isn’t one trade deal, but a raft of measures to harmonize regulation and trade between Europe and the United States.
All of the leaders involved have admitted that the project will take a significant amount of time to complete, but David Cameron underlined the political appetite for the deal when he called T-TIP “a once in a generation prize and we are determined to seize it”.
