Peter Wolodarski wrote last week that the prospect of an EU/US trade deal was the best economic news in a long time.
I agree. The launch of talks on what’s known in the jargon as TTIP (Transatlantic Trade and Investment Partnership) is something really important and welcome.
TTIP should be a trade deal like no other, creating a transatlantic economic bloc covering almost half of the global GDP. Through developing global standards and trade rules, TTIP will have positive impact around the world.
TTIP would be a record-breaking Free Trade Agreement, aiming at deep economic integration between the world’s two largest economies, creating a transatlantic marketplace that already accounts for about half of world GDP (47%) and one third of global trade. Each day goods and services of almost € 2 billion are traded bilaterally; this could rise substantially. As our PM said, this could be “the biggest bilateral trade deal in history…a deal that will have greater impact than all other trade deals on the table put together.”
The aim for TTIP goes beyond reducing tariffs (which are already low), and includes narrowing the gaps between EU and US regulatory systems. Aligned regulation will drive business integration and create economies of scale. It will create common standards, reducing the cost of compliance for businesses that trade in both markets and in third countries too.
The aim is also to develop 21st century trading rules, in areas such as intellectual property rights, transparency and trade facilitation, which would create a model for future global agreements.
TTIP is designed to strengthen the world trading system. Britain, Sweden and the whole EU have been frustrated at the lack of a global trade deal in recent years. We hope TTIP will create a positive example.