European Union is about to resume trade negotiations with the United States next week on Monday (11 November). It is going to be the second round of talks that should eventually lead to a free trade agreement called the Transatlantic Trade and Investment Partnership (TTIP). The talks were interrupted by the shutdown of the U.S. government and should include topics ranging from trade in goods and services to investment, energy, commodities and regulatory framework. The first round of negotiations took place in Washington in July 2013 and both sides negotiated their ambitions in more than twenty areas.
The aim of TTIP is mainly to remove trade barriers in a variety of economic sectors to facilitate trade in goods, service and investment across the Atlantic. Moreover, both sides expressed their wish to act beyond the customs border and to tackle issues such as standards, technical regulations and approval procedures. Attention will be also put on the reduction of transaction costs so that bilateral trade is less costly. Because the daily volume of EU-US trade is estimated at 2 billion EUR, any relaxation of trade barriers is a significant move towards economic gains. An independent study calculated that TTIP has the potential to create millions of jobs and increase gains for a European household by 545 EUR annually. Once fully implemented, the EU economy would be boosted by 0.5% every year- that is about 120 billion EUR.
For reference, the United States is the EU’s biggest trading partner. The bilateral trade between the U.S. and the EU is three times the volume that the Union trades in entire Asia, and EU investment in the U.S. is about eight times more that its FDI in China and India. In fact, it is estimated that about a third of all trans-Atlantic trade relations are formed by intra-company transactions of either American or European firms. Moreover, the U.S. and the EU are responsible for more than a half of the world’s GDP. If TTIP is completed, it will become the biggest bilateral trade agreement ever negotiated.
