Transatlantic Investment Partnership
- The reasons why the US and EU should be interested in implementing the Transatlantic Investment Partnership
US and EU are among the largest economies that can make the world’s largest trade partners that already had a strong trade relation before embarking on making trade agreements. Trade talks between the two started in 2013 with the aim of making the Transatlantic Trade and Investment Partnership (TTIP) which could lead to a decrease in trade barriers (Kennedy, 2020). The TTIP agreement could also give the US and EU the power to control the world trade and tame rising economies like China, which was giving then significant competition in the world market. The free trade agreements could have cemented the successful economic bond that existed for decades between the European countries and the US.
The US and EU technocrats were tasked with the responsibility of drawing an agreement that could include elements of trade that matches with the evolving global economy. The TTIP could improve the trade deals already in place. Among the considerations that the two parties had is the successful past relations that saw a trade of 30 percent of the worldwide trade in 2013. The bilateral investments between the EU and the US totaled to around $4 trillion, with an everyday trade in goods and services worth $ 2.7 billion across the Atlantic (Kennedy, 2020). A TTIP agreement could improve trade relations and contribute to further growth in trade and bilateral investment that will benefit allow the countries to realize the full potential and benefits.
The TTIP trade agreement could also create more job opportunities for the US and EU. The reduction of the existing trade barriers could create 1million job opportunities in a span of 10 years by cutting of both tariff and nontariff barriers. The increase in employment opportunities could lead to a growth in the GDP of the two parties by 0.5% each in a period when their economies were struggling with recession and increased levels of unemployment (Kennedy, 2020). A High-Level Working Group commissioned by the US and UE ascertained the benefits the two sides could realize through a comprehensive report in 2013.
- Areas in the TTIP that the US and EU possibly disagree
- Market accessibility
The EU countries upheld the protection of specific sectors that they considered culturally sensitive. France, in particular, was not ready to allow the inclusion of audiovisual services in the TTIP negotiations. The US targeted the audiovisual sector in the EU because of its worldwide power in that sector. The US encouraged the policy of Buy America, and the states’ representatives could not accept the removal of a system that protected them from the competition through the TTIP negotiations (Kennedy, 2020). The contracts at the state governments could be negotiated at the TTIP because they were without the USTR’s jurisdiction unless the state government agreed to volunteers.
- Coherence in regulatory
The US and EU had significant differences in regulations that affected multinational corporations in different factors such as safety procedures of consumer products, process of drug approval, and diverse standards of automobile safety. The differences in the regulations were more significant trade barriers than the quotas and tariffs (Kennedy, 2020). The standardization of processes between the US and EU markets could reduce the costs of trade and boost mutual economic growth. The concern raised by the EU and US was whether the standardization of the processes could achieve its objectives of increasing trade without compromising the environment and consumer protection
- Mutual recognition system
The concept of adopting Mutual recognition between EU and US faced immense challenges as it could have interfered with the already set procedures that were completely different in US and EU. The EU recognized the equality in standard in different European countries where a product that reached the set standards in one country could be accepted in all the other European countries (Kennedy, 2020). The mutual recognition system could have affected the US standard significantly if the TTIP agreement allowed it application.
- Protection of data
The TTIP agreement could have streamlined the flow of data between the EU and the US, but the US was not ready to remove sanctions on the data surveillance program. The situation was worsened by the allegations of snooping scandals, such as the tapping of Angela Merkel’s calls (Kennedy, 2020).
- The financial services requirements
The EU was focused on using the TTIP to remove duplicative requirements between the US and UE financial institutions. There was a mutual necessity to remove the regulations, but the two sides could not find a way of effecting the changes without affecting the operations of the financial institutions.
- What is DOHA and describe the “emerging market” and related countries’ significant disagreement(s) with the G7
The Doha multilateral trade negotiations were held in 2001 in Doha Qatar by 155 WTO member countries. The talks could have achieved a world economic growth of $280 billion per year (Kennedy, 2020). It was meant to streamline aspects that affect trade liberalization, such as the flow of goods and services, agriculture products, and antitrust rules and intellectual property. The developing countries raised issues about farm subsidies and increase of market access to farmers in from emerging countries in the developed economies. The negotiations bore fruits in 2013, and procedures to remove bureaucratic costs were supported by the 159 countries who were WTO members. The less developed countries could now access the G7 markets easily due to the removal of trade barriers.