The recently negotiated TPP (Trans-Pacific Partnership) has drawn a new map for global trade relations. This has multiple ramifications for Europe, which is working on signing another huge agreement with the United States: the TTIP (Transatlantic Trade and Investment Partnership).
A while back, I wrote about the significance of the TPP and how it could influence the TTIP negotiations between the United States and the European Union, because the EU has indeed been left behind.
The Pacific treaty got a headstart over its Atlantic counterpart. In fact, some analysts say the first goal has been scored in this game, and that the EU has much of its economic and trade position in the world on the line . The scoreboard reads: TPP 1 – TTIP 0
The EU Needs to Get Back in the Game
Europe, naturally, needs to grow and sell its products and services to foreign markets. This means:
- kick-starting our own economy
- responding to conflicts close to our borders
- adapting to other, emerging economies outside Europe
- maintaining our influence in the wider world.
The global economic environment has clearly changed and will continue to do so in the coming years. Without a doubt, it was the foreign markets that pulled the EU out of its crisis. But it is also true that 90% of global growth is happening outside the Old Continent. So, Europe had better react or it risks being left out.
All TPP member countries will have priority access to the U.S. market over the European Union. And America’s new trade partners could welcome an additional country: Korea.
Europe cannot afford to be kept off the playing field that the United States has set up. The EU has much at stake: 18% of EU exports go to the U.S. and we have a €100 billion surplus. But for the United States, the clock is ticking in its favor (it already signed the TPP) and its growth is more robust than Europe’s.
Tying the Score
Although we have lost the advantage of time (the scoreboard showing TTP 1-TTIP 0), we do have some points in our favor in the negotiation process to make a comeback:
- It’s the first negotiation between the EU and the U.S. on equal terms.
- 80% of the world follows the European regulatory model: the EU has an advantage over the U.S. in that respect.
- An estimated 80% of the benefits of the agreement would come from regulatory considerations.
The Clock is Ticking
One of the most highly criticized aspects in the signing of the TTP was the secrecy surrounding the negotiations. Here, that is not the case and the terms of the agreement are published. We know that the process is “under way,” and that Barack Obama wants to leave office with the deal in place, before the end of 2016, and the EU fully agrees.
The TTIP is not out to get anyone, but obviously the joint global influence of the United States and the European Union will grow if they are able to reach an agreement. Namely, it will:
- Help make our economy more flexible.
- Strengthen our influence on world trade rules
- Project our values globally.
But TTIP can’t be a deal at any price. And people naturally have questions and concerns about the talks—which is our job to understand and address.
For example, we must ensure:
- Products imported into the EU meet our high standards that:
- protect people’s health and safety, and the environment
- benefit society in other ways.
- EU governments fully maintain their right to:
- adopt rules or laws to protect people and the environment
- run public services however they wish
In any case, the European Union cannot remain on the sidelines watching the world strengthen its commercial ties while our role in the world diminishes.