Transatlantic Trade for All
For a world weary of waiting for the World Trade Organization’s Doha trade round to conclude, the impending Transatlantic Trade and Investment Partnership may seem a boon. But there is a serious downside: the deal could hurt developing-country exporters, unless the EU and the US make a concerted effort to protect their interests.
WASHINGTON, DC – The negotiations to create a Transatlantic Trade and Investment Partnership between the European Union and the United States are being widely welcomed. British Prime Minister David Cameron has called the TTIP a “once-in-a-generation prize,” citing potential gains of £80 billion ($125.5 billion) each for the EU and the US and £85 billion for the rest of the world.
For a world weary of waiting for the World Trade Organization’s interminable Doha trade round to conclude, even a bilateral trade initiative may seem like a boon, especially when, as a recent Financial Times editorial pointed out, “bilateral” covers half of the world’s economy. But there is a serious downside: The deal could hurt developing-country exporters, unless the EU and the US make a concerted effort to protect these actors’ interests.
The feature of the proposed pact that elicits the most excitement – its focus on regulatory barriers like mandatory product standards – should actually incite the greatest concern. Given low tariffs in the EU and the US – less than 5%, on average – further preferential reductions will not seriously handicap outsiders. But, when it comes to standards – such as those governing safety, health, and the environment – the market-access requirements are brutal and binary: either you meet the established standard or you do not sell.