Transatlantic Treaty (TTIP) : Topography of a Controversial Partnership

POINT SUD, the CNCD-11.11.11 studies | n°13

Transatlantic Treaty (TTIP) : Topography of a Controversial Partnership

Negotiated since July 2013, the Transatlantic Partnership (TTIP) seeks the establishment of a transatlantic market by bringing together the economic areas of the United States and the European Union. The TTIP project is focused primarily on non-tariff barriers, which are the health, social and environmental standards that hinder trade and investment. The Customs barriers between the United States and the European Union are already very low, even though European agriculture remains protected by tariffs on dairy products, meat and sugar which are also targeted. Besides the removal of tariff and non-tariff barriers, the TTIP project aims at liberalising investment, the opening of public procurement and the protection of intellectual property rights. These activity fields are each covered by one of the sixteen sections of the negotiating mandate, which would turn into as many chapters of the Treaty if finalised.

The present study aims to analyse, from the European standpoint, the key issues and challenges surrounding the TTIP negotiations.

  • In the first chapter, we look at the arguments put forward by the Treaty’s leading proponents.
  • In the second section, we analyse international trade’s new configuration and the way the TTIP project fits into the world’s “shifting” context, notably characterized by the growing power of China in international trade, by the disruption of world trade following the 2008 crisis and by the negotiation of bilateral and regional trade agreements for the purpose of bypassing WTO blockages.
  • In the third chapter, we analyse the anticipated impact of the TTIP on growth and employment, on the basis of various studies published on the subject. We will find that, according to studies cited by the European Commission, the ex- pelted gains in terms of growth and job creation are at best very modest and unequally distributed, while other studies have projected significant job losses in Europe.
  • In the fourth part, we describe the main parts of the TTIP project that are subject to controversy, such as the risk that the regulatory convergence process would be designed in a way that would result in a watering down of the existing and future standards, the introduction of an investor- state dispute settlement (ISDS) allowing the override of existing jurisdictions, the “ratchet effect” and the “negative list” principles on which the service liberalizing process is based. This last chapter ends with the analysis of the other transatlantic treaty, CETA, signed by the EU and Canada, highlighting similarities with the TTIP as well as the differences in timing, the CETA text being published, presented as finalized and ready to be ratified in 2015 or 2016. Finally, we will draw some conclusions on the costs and benefits of the proposed TTIP and on alternative strategies that the European Union could implement to more effectively achieve those objectives.

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