tag:theconversation.com,2011:/us/topics/transatlantic-trade-and-investment-partnership-23278/articlesTransatlantic Trade and Investment Partnership – The Conversation2017-03-24T09:59:01Ztag:theconversation.com,2011:article/751092017-03-24T09:59:01Z2017-03-24T09:59:01ZAmerica can’t be first without Europe<p>On March 25, European Union leaders celebrate the 60th anniversary of their founding treaty, a central pillar of the structure set up in the aftermath of World War II to solidify peace, prosperity and partnership in Europe.</p>
<p>Over the last 60 years, the EU (and its predecessors) has served as an essential U.S. partner: for example, by enhancing economic opportunity for U.S. companies in Europe and <a href="https://2001-2009.state.gov/p/eur/rls/fs/48475.htm">increasingly supplying vital foreign assistance</a> and diplomatic support to help solve international problems. Indeed, if the EU did not already exist, the United States would be looking to invent something like it to help preserve peace and generate prosperity on a continent that suffered through two devastating world wars.</p>
<p>More recently, however, the EU has faced a variety of existential threats as the <a href="https://theconversation.com/15-economic-milestones-which-have-led-to-the-current-eurozone-crisis-53503">euro crisis</a> rattled its members’ financial well-being, economic growth slowed, <a href="https://theconversation.com/what-explains-britains-brexit-shocker-61620">U.K. voters opted</a> to leave the union and “<a href="http://www.newsweek.com/donald-trump-eu-wonderful-european-union-brexit-euroskeptic-560200">euroskeptics</a>” in countries like <a href="https://theconversation.com/how-marine-le-pen-could-become-the-next-french-president-68765">France</a> and the Netherlands use criticism of Brussels to contest elections. And even in the U.S., <a href="http://www.the-american-interest.com/2016/06/15/brexit-good-for-the-united-states/">some reacted to Brexit</a> with cheers.</p>
<p>The bottom line – based on our many year of experience as diplomats, policymakers and researchers on transatlantic issues – is that the U.S. needs a strong economic and political partnership with Europe to advance its own economic well-being and address vexing international and regional issues. Such a partnership would be <a href="https://www.cambridge.org/core/journals/international-organization/article/div-classtitlewhat-single-voice-european-institutions-and-euus-trade-negotiationsdiv/13091C901403ADB37A006BA31F51C913">enormously more difficult</a> to maintain without the EU’s single voice, something Washington would be wise to remember.</p>
<h2>Ensuring peace and prosperity</h2>
<p>As it happens, the EU <a href="https://www.amazon.com/Recovery-Europe-Richard-Mayne/dp/B00D1FGXPW">might not even exist</a> today if it wasn’t for the United States and its efforts to rebuild Europe – via the Marshall Plan – and stop the spread of Communism following World War II. </p>
<p>Seventy years ago, U.S. Secretary of State George Marshall, U.S. President Harry Truman and members of Congress – Republicans and Democrats alike – <a href="https://www.brookings.edu/wp-content/uploads/2016/10/table-of-contents_-the-marshall-plan-and-the-shaping-of-american-strategy.pdf">agreed</a> that the way to ensure peace and prosperity in Europe was for Europeans to develop interdependent, competitive economies. What we now know as the European Union emerged from these American efforts.</p>
<p>And it has worked. The EU – whether through the <a href="http://www.consilium.europa.eu/en/european-council/">European Council</a> of heads of state, the <a href="https://ec.europa.eu">European Commission</a> or the <a href="http://www.europarl.europa.eu/portal">European Parliament</a> – has helped underpin prosperity and economic competition among democratic nations on the continent. </p>
<p>The EU’s <a href="http://onlinelibrary.wiley.com/doi/10.1111/jcms.12175/abstract">single market in particular has led to unprecedented wealth</a>, as it established rules and norms for doing business across the member states. The EU has also served as the vehicle for embracing Central Europe into that market and community of members after the fall of the Iron Curtain and still remains a pole of attraction for others hoping to join the EU. </p>
<p>Since the signing of the <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3Axy0023">Treaty of Rome</a>, the <a href="https://www.weforum.org/agenda/2015/10/is-europe-outperforming-the-us/">EU has grown</a> from six countries with 186 million citizens to 28 countries with 515 million citizens and a GDP seven times larger than in 1957. The <a href="http://www.businessinsider.com/charts-eu-economy-is-bigger-than-the-us-2015-6">combined EU economy</a>, in fact, is larger than that of the United States, making it the <a href="https://www.thebalance.com/world-s-largest-economy-3306044">second-biggest</a> in the world behind China.</p>
<h2>The economic ties that bind</h2>
<p>Even from an “<a href="https://theconversation.com/trumps-america-first-echoes-from-1940s-59579">America first</a>” perspective, it is important to recognize how much value has been created by the European Union’s single market and other initiatives that have made Europe’s economy more integrated and open to U.S. businesses. </p>
<p>For example, today the transatlantic economy <a href="https://transatlanticrelations.org/publication/transatlantic-economy-2017/">generates US$5.5 trillion</a> in total commercial sales a year and employs up to 15 million workers on both sides of the Atlantic. Combined, they represent the largest and wealthiest market in the world, driven by investment in both directions. </p>
<p>Roughly 60 percent of America’s total foreign assets are in Europe. Sales in Europe by EU units of U.S. companies topped $3.1 trillion in 2015, and their assets in the region are valued at an estimated $15.7 trillion. Europe accounted for over 70 percent of the $3.1 trillion invested in the U.S. in 2015, while European assets in the U.S. are estimated to be worth $8.4 trillion. Trade in goods across the Atlantic has almost doubled since 2000, totaling $686 billion in 2016, and 45 states export more to Europe than to China. </p>
<p>With a deeply integrated economic relationship of this size and nature, the U.S. should take steps to increase the ease of mutually beneficial economic activities, and urge the EU to take <a href="http://www.atlanticcouncil.org/publications/reports/charting-the-future-now">steps needed to spark economic growth</a>. </p>
<p>If the Trump administration wants to address the U.S. trade deficit with the EU, for example, let’s negotiate a new economic agreement that takes better advantage of the massive transatlantic market place described above. The U.S. and the EU were trying to forge such an agreement via the <a href="https://theconversation.com/why-ttip-will-live-on-but-not-for-the-eu-61718">Transatlantic Trade and Investment Partnership</a> before the U.S. elections. While that <a href="http://www.politico.eu/article/trumps-pick-for-trade-envoy-open-to-continued-eu-trade-talks/">agreement remains on hold</a>, we believe a strong trade deal between the partners could open up job opportunities for new generations on both sides of the Atlantic.</p>
<h2>Tackling troubles together</h2>
<p>EU is also a partner for the United States in tackling international problems and vital as a source of funds to meet humanitarian and development needs <a href="https://euaidexplorer.ec.europa.eu/DevelopmentAtlas.do">in almost every corner of the world</a>. This role is even more important if the <a href="http://www.cnn.com/2017/02/28/politics/trump-budget-foreign-aid/">U.S. wants to reduce</a> its own aid spending. </p>
<p>The EU and its members <a href="http://www.oecd.org/dac/stats/statisticsonresourceflowstodevelopingcountries.htm">together provided</a> over $87 billion in official development assistance in 2015. That is 55.7 percent of the global total. The comparable number for the United States is <a href="https://euaidexplorer.ec.europa.eu/AidOverview.do">just $31 billion, or 23.6 percent</a>.</p>
<p>On the diplomatic front, it is true, the complicated institutional makeup of the EU often means slow decision-making, and it becomes very hard when competencies and authorities at the EU conflict with those of the member states: for example, in fighting terrorism or dealing with refugees. The EU has taken major strides to improve this, such as by establishing a high representative to speak for members in a range of regional situations. The EU has been <a href="http://onlinelibrary.wiley.com/doi/10.1111/jcms.12175/abstract">an active partner</a> on Ukraine, Iran, the Middle East and Afghanistan, for example.</p>
<p>Despite the remaining shortcomings, in other words, the EU is <a href="http://www.ecfr.eu/scorecard/2016">still a much stronger foreign policy partner</a> for the U.S. today than in the past. If the EU were not there to contribute significant resources to help deal with major humanitarian crises, handle the fallout of conflicts and terror and bolster the prospects for peace and stability in countries like Ukraine, a much greater burden would fall on the United States.</p>
<h2>Winning with a strong Europe</h2>
<p>The EU currently <a href="http://www.atlanticcouncil.org/images/publications/Charting_the_Future_Now_0316.pdf">faces serious challenges</a>: low economic growth, massive immigration flows, euro-skepticism among its citizens and a complicated structure necessary to fashion decisions among 28 member states. </p>
<p>The U.K. vote to leave the EU in June, which <a href="http://transatlanticrelations.org/wp-content/uploads/2017/03/TE2017_Chapter1.pdf">will surely leave the British poorer</a> economically, only adds to the aging union’s woes as the two sides negotiate their future relationship. </p>
<p>Russia, meanwhile, is <a href="https://theconversation.com/war-of-words-how-europe-is-fighting-back-against-russian-disinformation-65444">trying to divide and weaken Europe</a>. And some in the U.S. are likely tempted to leave Europe to the Europeans and to tend to our own concerns.</p>
<p>The United States, however, remains an integral part of the European equation through bilateral ties, NATO and relations with the EU. We have learned, often to our sorrow, that whenever we ignore European problems, we end up paying a higher price later, as was the case when we pulled inward in the decade before World War II.</p>
<p>American interest in a strong EU, then, derives from a steely-eyed appreciation of fundamental U.S. national interests: a Europe that is at peace and open to U.S. goods, ideas and cooperation.</p>
<p>While the U.S. would be wise to let Europeans sort out their political differences and options for integration, America will pay enormously if the process of European cooperation or prosperity goes badly off track. We should be clear-eyed about potential costs and work to deepen transatlantic cooperation.</p>
<p>The U.S. will not be better off with a divided and weak Europe. We win with a strong European partner.</p><img src="https://counter.theconversation.com/content/75109/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Earl Anthony Wayne advises HSBC's Mexico and Latin American operations on combating illicit finance and is paid for that advisory work. He is a public policy fellow at the Woodrow Wilson International Center for Scholars, a non-resident Fellow at the Atlantic Council, and a senior non-resident advisor at the Center for Strategic and International Studies. </span></em></p><p class="fine-print"><em><span>Daniel S. Hamilton served for 15 years as Executive Director of the American Consortium for EU Studies, has been a consultant to Microsoft, the Business Roundtable and Transatlantic Business Dialogue, and a member of advisory boards and committees for the Robert Bosch Foundation, Alexander von Humboldt Foundation, the Heinrich Böll Foundation, the German Institute for International Security Affairs (SWP), and the Körber Foundation. In 2008 he served as the first Robert Bosch Foundation Senior Diplomatic Fellow in the German Foreign Office.</span></em></p>The Treaty of Rome, which eventually led to the European Union, is turning 60 at a time when many inside and outside Europe are questioning the union’s value. For the U.S., much is at stake.Earl Anthony Wayne, Visiting Professor of International Affairs, Hamilton CollegeDaniel S. Hamilton, Austrian Marshall Plan Foundation Professor, Johns Hopkins University School of Advanced International Studies, Johns Hopkins UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/617182016-06-30T10:17:42Z2016-06-30T10:17:42ZWhy TTIP will live on – but not for the EU<p>The Transatlantic Trade and Investment Partnership – also known as TTIP – could be the next casualty in the Brexit fallout. But not in the way you might expect. The controversial trade agreement between the EU and United States could well fall apart, only for the UK to pick up the pieces for its own trade deal.</p>
<p>For the UK, leaving the European Union means leaving the numerous trade deals it is party to. This includes the free trade it has with the 27 other EU members and the EU’s agreements <a href="https://fullfact.org/europe/how-many-free-trade-deals-has-eu-done/">with 50 other countries</a>. It also means exclusion from the deals currently being negotiated – an agreement with Japan and, of course, TTIP. But for the EU, Brexit could mean the end of TTIP altogether.</p>
<p>The <a href="http://ec.europa.eu/trade/policy/in-focus/ttip/about-ttip/">idea behind TTIP</a>, billed as an ambitious and comprehensive trade and investment agreement, is to promote growth in Europe and the US by opening up the US to EU firms and vice versa. It will do so by cutting the red tape of regulation that firms face when exporting, and would set new rules to make it easier and fairer to export, import and invest overseas. </p>
<p>Sounds like a great thing overall then? Not necessarily. <a href="https://stop-ttip.org/what-is-the-problem-ttip-ceta/">Many have expressed concerns</a> over the openness of the negotiations, the content of the deal and the influence of big business into drafting and approving standards. </p>
<h2>Sticking points</h2>
<p>The two main sticking points are a clause called the <a href="https://theconversation.com/how-the-secret-ttip-trade-deal-could-enable-companies-to-sue-countries-50543">investor-state dispute settlement</a>, which would allow companies to sue states directly for alleged violations of the terms of the deal, and also how it will affect the legal protections of agricultural products. It might sound trivial but trade in agricultural products is a major issue for negotiators trying to satisfy say, on the one hand, French wine and cheese producers and, on the other hand, American GM crop growers and enhanced meat producers. </p>
<p>The EU gives strong legal protection for numerous products – particularly in the form of designated origins (Cornish pasties <a href="https://theconversation.com/cornish-pasties-from-colorado-what-an-eu-us-trade-deal-could-mean-for-regional-delicacies-35932">must come from Cornwall</a> and <a href="https://theconversation.com/why-europe-and-the-us-are-locked-in-a-food-fight-over-ttip-45279">Feta cheese from Greece</a>, for example). This gives them a competitive advantage in a big market – which is why the US opposes it. </p>
<p>There are also concerns about <a href="https://www.theguardian.com/environment/2014/sep/05/eu-gm-food-imports-us-canada">food safety and quality</a>, especially around modified food products available in the US, but currently banned in Europe. These concerns have to be weighed up against the huge market that European exporters would have access to in the US. It is a market that currently has big restrictions to it – British lamb and venison cannot currently be exported to the US, for example.</p>
<h2>Trade champions</h2>
<p>Due to long and organised resistance, the project, which started in June 2013, <a href="https://theconversation.com/the-ttip-trade-deal-is-lost-at-sea-60132">has been faltering</a>. No agreement has yet been reached, nor does it seem close to being found on the most contentious issues. Brexit might be the final nail in the coffin. </p>
<p>It is <a href="http://www.politico.eu/article/trade-agenda-will-wobble-but-continue-despite-brexit/">widely acknowledged</a> that the main driver for TTIP has been the UK. The reason for this is that successive British governments have seen their role as the bridge between an economically liberal US and a protectionist and traditional EU. </p>
<p>The UK had been a foothold of Anglo-Saxon capitalism in a Europe that is dominated by governments which are very protective over their industries and generally play a large role in their economies. Once this bridge with the UK is severed, what is there to ensure that reluctant European policymakers will push through a deal in the face of widespread popular resistance? </p>
<p>Without the British push towards liberalisation the deal risks dying a quick death, contrary to recent proclamations from both the EU and the US that a deal is expected by the <a href="http://www.independent.co.uk/news/business/news/ttip-obama-says-trade-deal-should-be-signed-by-the-end-of-the-year-a6999456.html">end of the year</a>.</p>
<p>There is an ironic twist in the fate of TTIP, however. Once it leaves the EU, the UK is likely to pursue its own trade deal with the US. And it is extremely unlikely to differ from TTIP for a few reasons. </p>
<p>First, trade deals take a lot of time to negotiate. The EU is having such a hard time concluding deals not because it is bureaucratic and sclerotic, but because it has to negotiate a long series of contentious issues. Second, considering Britain’s long history of championing openness and free trade, coupled with the economic struggles it will face in a post-Brexit world, who can seriously argue that issues like the environment and small farmers will be a negotiating priority? </p>
<p>We are heading for <a href="http://www.independent.co.uk/news/uk/politics/ttip-brexit-uk-steroids-disastrous-global-justice-now-war-on-want-a7099986.html">TTIP on steroids</a>. Contrary to the hopes of <a href="http://www.tuaeu.co.uk/vote-no-to-ttip/">some Leave supporters</a>, Brexit might save Europe from TTIP, but not Britain.</p><img src="https://counter.theconversation.com/content/61718/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ioannis Glinavos does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The controversial trade agreement between the EU and United States could well fall apart, only for the UK to pick up its pieces.Ioannis Glinavos, Senior Lecturer in Law, University of WestminsterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/520012015-12-09T19:10:01Z2015-12-09T19:10:01ZThe WTO’s Nairobi talks and the multi-billion dollar trade agreement you’ve never heard of<p>In less than a week trade ministers from across the globe will come together at the 10th Ministerial Conference of the World Trade Organization (WTO) in Nairobi, Kenya. </p>
<p>The meeting follows more than a decade of stalled global trade negotiations since the WTO’s Doha Round of talks in 2001. </p>
<p>Dominating the Nairobi discussion is the <a href="https://www.wto.org/english/news_e/spra_e/spra98_e.htm">expectation</a> that an impasse will continue over the <a href="http://ecipe.org/publications/tenth-wto-ministerial-conference-nairobi-2015/">scope and future</a> of the multilateral Doha trade agenda, particularly given the influence of large newly-minted regional trade agreements.</p>
<p>Given the slow movement of the WTO talks since the Doha Round in 2001, many country members have forged ahead and conducted so-called “mega-regional” trade agreements amongst themselves, designed to be “WTO plus”. </p>
<p>These agreements – including the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) – commenced life as draft propositions between government negotiators, generating little public interest until they burst onto the world stage and into the public lexicon.</p>
<p>Like many countries in the Asia-Pacific region, Australia has also taken part in a growing number of mega-regional and bilateral trade agreements. These include more recently the TPP and free trade agreements with China, Korea, and Japan.</p>
<p>Each agreement <a href="http://dfat.gov.au/trade/agreements/Pages/benefits-of-ftas.aspx">promises to deliver</a> substantial benefits to goods and services exports worth billions of dollars, and each has generated significant media interest and political debate.</p>
<p>However, in June, to little fanfare, Australia formally accepted a pending treaty that will be part of the Nairobi talks worth <em>hundreds</em> of billions of dollars <em>annually</em> to global trade, known as the WTO Trade Facilitation Agreement (TFA). </p>
<p>The TFA is a rescued component of the original Doha Round, concluded at the last WTO Ministerial in Bali in 2013. Once in force, it will <a href="https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm">benefit global trade</a> through harmonisation of customs procedures, improved cooperation between customs and trade authorities, linkages on facilitation between the private sector and Customs, and a raft of capacity development programs for Least Developed Countries (LDCs). </p>
<p>The economic benefit to global trade arising from full implementation of the TFA is simply staggering.</p>
<p>Research undertaken by the OECD <a href="http://www.oecd.org/trade/trade-facilitation-agreement-would-add-billions-to-global-economy-says-oecd.htm">has found</a> that in some African countries, estimated revenue losses from inefficient border procedures exceed 5% of GDP. Full implementation of the TFA would stem such losses, <a href="http://www.oecd.org/tad/tradedev/WTO-TF-Implementation-Policy-Brief_EN_2015_06.pdf">reducing</a> trade costs by 16.5% in low income countries, by 14.6% in upper-middle income countries, and by 11.8% in OECD countries.</p>
<p>A World Bank study <a href="https://openknowledge.worldbank.org/bitstream/handle/10986/21650/WPS7211.pdf">in March 2015</a> estimates that the global trade cost savings from full implementation of the TFA will conservatively amount to US$210 billion per year. To put this in perspective, that’s a gain of US$33.31 per year for each and every person residing in a WTO member country.</p>
<p>And yet despite its imminent extraordinary global impact, the TFA has earned barely a mention in the international discourse on trade, compared with the attention afforded to the mega-regional trade agreements such as the TPP and TTIP. </p>
<p>This suggests that the TFA has been dramatically undersold in the lead-up to Nairobi, with the influence of the mega-regionals serving to dominate and <a href="https://agenda.weforum.org/2015/09/how-can-the-wto-remain-relevant/">further split</a> the discussion on achievements and direction.</p>
<p>Resulting speculation as to the relevance, scope and future of the WTO’s Doha trade agenda has gripped the Nairobi dialogue. In a <a href="https://ustr.gov/about-us/policy-offices/press-office/speechestranscripts/2015/september/remarks-ambassador-michael">recent speech</a>, US Trade Representative Michael Froman called for “credible” results in Nairobi. This may indicate a normative expectation – is the scope of the TPP the new credible? </p>
<p>Across the Atlantic, the European Parliament has <a href="http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+MOTION+B8-2015-1230+0+DOC+PDF+V0//EN">pushed for</a> an ambitious but “realistic” result in Nairobi that takes into account the needs of LDCs. Is the TTIP, on which the EU is presently focused, the new global realistic? </p>
<p>However, in the same way as the mega-regional agreements grew from small contractual propositions into influential normative actors, so too has the TFA begun to take hold amongst members, suggesting that the WTO’s normative power is far from decrepit.</p>
<p>To date, 53 countries have already ratified the deal, with that figure growing every month. The TFA will enter into force once two-thirds of WTO members have completed the ratification process.</p>
<p>Each time a country ratifies the TFA, they are obliged by <a href="https://www.wto.org/english/thewto_e/minist_e/mc9_e/desci36_e.htm#art13">Article 13</a> of the Agreement to form or designate a National Committee on Trade Facilitation (NCTF). These committees have already been set up in many countries, and will facilitate implementation of the TFA between domestic Customs, industry, and other stakeholders. </p>
<p>The NCTF customs-to-stakeholder interaction on facilitation is arguably where the rubber hits the road for ratifying governments, and where the real delivery of benefits will occur. The World Customs Organisation will act as a key player in this space, and some of this work <a href="http://www.wcoomd.org/en/media/newsroom/2015/july/release-of-the-wco-customs-business-partnership-guidance.aspx">has already commenced</a>.</p>
<p>The emergence of the Trade Facilitation Agreement onto the world stage should be a core focus of public discussion in the lead-up to the Nairobi Ministerial. It is without doubt a real and tangible success story for the WTO in recent years, limiting popular arguments that the WTO agenda is at risk of being blunted by mega-regional agreements. </p>
<p>The rapid ratification rate of the TFA also demonstrates members are voting with their feet, further underscoring the argument that although mega-regional agreements dominate present discourse, there are substantial areas of global trade regulation over which the WTO necessarily retains normative primacy.</p><img src="https://counter.theconversation.com/content/52001/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The author’s views are his own. Andrew Willcocks is an Australian lawyer and PhD candidate at the Australian National University Centre for European Studies. He is also a Senior Adviser on international trade to the Australian Chamber of Commerce and Industry.</span></em></p>The WTO’s global trade agenda has been decried as dead. But the upcoming Nairobi round might change that.Andrew Willcocks, PhD Candidate, ANU Centre for European Studies, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.