The Transatlantic Trade and Investment Partnership (TTIP): earnings in a high price
Author: Pierre Varasi
Translated by Ilaria Oberti
The Transatlantic Trade and Investment Partnership (TTIP) is a free trade agreement between the United States and the European Union. The agreement has been negotiating since 2013 and after years of informal drafts, it should be published within 2015, or at least this is what his supporters hope. Anyway criticism is hard and comes from different sides. The TTIP is officially defined by the EU as a trade and investment deal with the aim to improve trade and investment between EU and United States creating a real transatlantic trade, generating new economic opportunities – such as new job places – and creating growth through a bigger access to the market and a best regulatory compatibility. It will lay the foundations for global laws. In the case that this agreement will be approved, it could be extended to other primary partners of the two, European and American, giants.
Some of his main points are: opening up of the United States and EU markets, cutting off of the administrative burdens for the export companies (custom duties), setting of new rules to make export, import and investments overseas easier and fairer. To sum up, the agreement will open a new free trade zone with easier and better procedures. In economy the commercial policy instruments can be divided into: tariff tools – custom duties on the import and benefits on the export; quantitative tools – maximal quotas and voluntary restriction; non-tariff barriers – production, health standards and so on; dumping – the sale of products below the market value in the foreign markets; retaliatory measures – against unfair operation made by some countries or companies.
The TTIP has the aim to level out the non-tariff barriers, having as result zero custom duties and anti dumping. Even the public invitation to tender will be open to foreign companies. EU, United States and companies want to create new job places and to cut off the costs for the end users at the same time with an increase in the choice of the products. Just in Italy is expected a growth between 0,5% and 4% of the GDP and an increment in employment. In all, it is expected a growth of the export about 28%, in the amount of 187 billion of euros. These effects in this crisis period will surely bring a significant growth and optimistically they could bring to a complete end of the crisis. Moreover, the benefits would be also for the bureaucracy and the administration and even the biggest competition could bring to a bigger innovation.
However, the TTIP has to face hard criticism from some slow food associations, economists, private agencies and citizens. The criticism is based on reasons of any sort. Since the TTIP had been for long time a secret agreement regarding his contents, there was a lack of transparency, at least until January 7th of this year, date when the European Commission published the body copy of the negotiations.
More specific critics are about the standardization of the non-tariff barriers: for instance, in the United States the use of GMO, hormones for the meat and a really high quantity of pesticides is deliberately allowed. The American producers of groceries don’t have to follow the environmental protection or the animal health standards.
Obviously, leveling out the productive standards, the European users will be disadvantaged, seeing the growth of less quality products in their supermarkets due to the introduction of GMO products, which are not allowed in Europe for now. Moreover, the EU has some principles such as “farm to fork” and the precautionary principle. The first one is about a control of every steps of the production, always supervised and traceable. In the United States, instead, just the final products are controlled. The second principle is about another fundamental difference: as in Europe it is possible to pull back a product from the market if exists the risk that it is unhealthy – even if there are no scientific proofs – in the United States, without a clear correlation evidence between the product and the damage, the product remains in the market. In addition, in Europe is the company, that tries to put its product into the market, to have to proof its safety; in the United States is the public authority who has to claim for a harmful evidence, which happens rarely.
Also the economic boom, which is so promoted by the supporters of the agreement, can be attached by some criticism: lots of economists think that the job places will decrease instead of increasing – for instance because there will not be any laws about the national preference in case of an invitation to tender. Mr. Stiglitz, famous economist also for his critics against the IMF, affirms that “the United States, in fact, don’t want a free trade agreement, they want instead a management agreement that encourages some specific economic interests”. The quality controls of the products, in particular food and drugs, are in any case at the core of the thesis of the non-sympathizers of the agreement. The issue is: is it worth sacrificing some regulations and standards, to have a completely opening to the United States markets and to give a boost to both economies?
- http://ec.europa.eu/index_en.htm (European Commission – Trade)
- ilpost.it “che cos’è il TTIP”