TTIP and TPP: Trade Pacts in Trouble

Under the radar of the big news items, fueled by the migration and Russia crises, populism and the threat of Brexit, terrorism and (once again) the Eurocrisis, another issue is emerging: trade. Now while this seems pretty boring, tens of thousand ds of people assemble on squares in Europe to protest against the TTIP, the planned trade agreement between the USA and the EU, and its sibling, the TPP, the related treaty between the U.S. and ASEAN countries, also suffers from a mixed reputation. All current U.S. presidential candidates have positioned themselves more or less against these trade agreements.

And indeed, there is data that suggests previous trade agreements have cost industrial workers in America jobs. On the other hand, David Ricardo would argue even today that nothing better may happen to a country then healthy trade relations. As well, these deals have geopolitical benefits, serving as a way of tightening links between the US and EU in the case of the TTIP, and the US and its ASEAN partners with the TPP. Nonetheless, there are two major issues turning people against these negotiations: first, that there are useful or ‘just’ standards that would have to be reduced for assuring consensus among signatories; and second, that there is an inbuilt trend away from national legislation, towards arbitration in the case of conflicts.

Now how do we, the experts, assess these two treaties? Should they be finalized soon, before there will be a new U.S. administration, or does it pay off to let the talk linger indefinitely?

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  1. Alexei Voskressenski 2 days ago

    Difficulties are political, and the understanding of these difficulties is always short sighted and parochial. It is clear that the new level of competition will be among macro-regional blocks that may establish transregional ties between them. From my point of view this is our next future, and I wrote a forthcoming book to explain it.

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  2. Justas Paleckis 2 days ago

    No-one has yet seen the draft TTIP agreement except the experts working on it and a very narrow circle of politicians. This is already causing suspicion to millions of people on both sides of the Atlantic. Their negativity towards the TTIP reflects also their sceptical views of the political elite of the EU and the US who supports this project.
    Brussels is trying to convince people that the treaty is mutually beneficial and will create new jobs and raise the GDP of each EU country. Supposedly, laws and standards would be valid as before. The disagreements would be settled in the arbitral commission made of representatives from both sides.
    Obama, heroically fighting for this agreement, is quite popular in the US and the EU and likely more popular than his successor. So maybe one could trust him and hope that the TTIP agreement will be finalized this year. However, an avalanche of crises and bad news which fell upon the world in recent years already disaccustomed us to good news.

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  1. Tom Owens 2 days ago

    America, particularly right-wing politicians, seem to be under the impression that somewhere within its borders are legions of unemployed factory workers ready to bring industrialization back to 1950s levels. Unfortunately, the reality is that many industries that brought the United States economic prosperity are no longer viable in a modern economy – and many of America’s young people have turned away from the occupations of their parents and grandparents. Quelling world trade with nostalgia of the early 20th century is counter-productive for the world’s economy. Instead, America should spend its energy finding new niches, and keep in mind that they may look very different from the automotive factories of yesteryear.

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