LONDON – Almost two decades after the idea was first mooted, the United States and the European Union agreed last week to begin negotiating a Transatlantic Trade and Investment Partnership (TTIP). The partnership’s launch – which should occur at the beginning of 2015 – has been presented as a much-needed “deficit-free stimulus” that would boost US and EU GDP by 0.5% annually, while helping to increase employment on both sides of the Atlantic.
While both parties aim to eliminate remaining tariffs on bilateral trade, they are particularly eager to reduce the thicket of non-tariff barriers – mainly competing technical and sanitary standards and regulations – that have stifled development of the bilateral economic relationship. Closer regulatory cooperation may also help the US and the EU to confront what business leaders view as increasingly unfair competition from China both at home and abroad.
But can the TTIP live up to the hype? Tellingly, the High-Level Working Group on Jobs and Growth, which was tasked with identifying the policies and measures that should define the negotiations, has recommended a more conservative approach.
Indeed, the Group’s final report, released earlier this month, states that the agreement “should be designed to evolve over time,” moving “progressively toward a more integrated transatlantic marketplace.” Specifically, the group recommends establishing “an on-going mechanism for improved dialogue and cooperation” on regulatory issues and non-tariff barriers, as well as a “framework for identifying opportunities for…future regulatory cooperation.”