perceived economic benefits that will accrue to the member states to the proposed commercial block: Transatlantic Trade Investment Partnership (TTIP)

 perceived economic benefits that will accrue to the member states to the proposed commercial block: Transatlantic Trade Investment Partnership (TTIP)

Introduction

The purpose of the following brief is to discuss the perceived economic benefits that will accrue to the member states to the proposed commercial block: Transatlantic Trade Investment Partnership (TTIP) that is expected to bring together the US and the EU member states. Besides, the brief shall discuss some of the possible drawbacks that are likely to be experienced from this arrangement.

The proposed pact between the EU and the United States shall help in boosting foreign trade, especially export trade for small and medium enterprises from the EU trading bloc to the US. Again this pact shall help in expanding the market base to the EU member states by allowing them to access more than 300 million potential customers domiciled in the US (Nick, 2016). The other benefits that TTIP shall give the traders include a reduction in regulatory differences between the trade partners, reduced tariff barriers, and seamless processing of custom duties and additional charges as wells as ease of access of foreign markets for both parties on either side of the Atlantic Ocean. Through the establishment of TTIP, the trade tariffs shall be reduced significantly, thereby promoting better terms for global trade (UK Department for Business Innovation and Skills 2014). The deal will also help in streamlining even the nontariff barriers that would otherwise limit trade between different blocks. On the side of the consumers, TTIP will help the customers to access a wider variety of quality products. This will allow customers to have unlimited choices and options for their purchases. Additionally, it will also help in regulating the cost of commodities in the market, thereby enabling the buyers to get quality products at relatively affordable prices. The establishment of TTOP shall also contribute to economic development by creating more job opportunities for the merchants and allied workers in the business sector.

Though it stands to create more economic benefits and progresses to the parties involved, the establishment of this deal may kill the growth of indigenous industries due to stiff competition from established global companies and manufacturers. Additionally, it may also lead to dumping off that would interfere with the sale of domestic products due to the influx of cheap foreign products. The power struggle is another drawback to the establishment of the pact. For instance, EU members maintain their position that the establishment of TTIP should not be used to compromise the sovereignty of the UK. Therefore, political hard lines may deter the successful establishment of the pact.  Again, the use of different currencies is another drawback to this deal. Lack of one universal medium of exchange would reduce the effectiveness of a trade.

Both parties readily accepted the proposed establishment of TTIP without any form of resistance due to the excellent knowledge of the member countries on the benefits of global trade. Member states to this pact perceived free trade deal as a beneficial plan that would boost economic prosperity to both parties (Mayer, 2014). Again, the parties involved considered this move as a potential for helping them in addressing their social and economic concerns such as unemployment, unfavorable balance of trade, among others. TTIP was seen as a lucrative plan that would help to boost the economy of the nations on either side of the Atlantic Ocean. It was thus seen as a stimulus package that would spur economic vibrancy and growth. Parties to this deal had a mutual understanding that it would yield a mutual benefit to them in terms of trade and economic prosperity (Joe, 2014).

References

Joe, K (February 2, 2014). “Why a US-European trade deal is a win-win.” The Wall Street Journal.

Mayer, R. ( 2014).  Transatlantic Trade and Investment Partnership (TTIP): A Discussion about Benefits and Drawbacks.  GRIN Verlag, Retrieved from https://www.grin.com/document/288972 Nick, D. (May 30, 2016). “Think TTIP is a threat to democracy? There’s another trade deal that’s already signed”. The Guardian

UK Department for Business Innovation and Skills (December 15, 2014).Transatlantic Trade and Investment Partnership (TTIP): benefits and concerns. UK Department for Business Innovation and Skills: Gov.UK