February 22, 2015
Much has been written already about the Transatlantic Trade and Investment Partnership, a trade agreement currently in negotiation between the European Union and the United States of America. It entails a comprehensive product-specification and trade on equal terms between the two blocks. Well, for the sake of accuracy, between a Federation (the USA) and a Federation in the making. Many will argue that the EU is not a federation but rather a union, a few would prefer to call it a “common trade area”, some would not agree to any of those definitions.
Negotiations began in July 2013, under the former Barroso administration, in furtiveness as you would expect strategic defence meetings would be led, while the eighth round of negotiations has been completed a few weeks ago. Secrecy has been relaxed along the way and some Countries have put their feet down against potential trade dumping in specific industries, France obtained the exclusion of the Audiovisual sector and the the UK and US declared Financial Services off the table. Ms Malmström, incumbent EU Commissioner-designate for Trade, assured that all discussion papers have been made available to parliamentarians, made available online and negotiations are being pursued in complete openness today; the agreement is scheduled for completion by end 2015, then member countries will be called to ratify the act.
A few comments about the whole chronicle are opportune at this stage.
Supporters of the TTIP, proposed by the USA to the EU, suggest that the EU-US trade relationship, already the biggest in the world, is in the range of € 500bn, and trade expansion derived by this agreement would rocket to circa € 750 bn. However, talk about figures is irrelevant today given that we don’t know what is in and what out of the agreement. Nevertheless, we have ideas about the impact caused by the present wild globalization: vast loss of jobs caused by industry delocalizations and substantial increase in profits by multinational corporations; benefits that missed to seep through the wider economy causing individual poverty and the crisis we are witnessing in Europe. The danger of a worldwide interconnected economy is today under our eyes.
It is logical to assume that a 50% (or less) growth in trade between the US and EU, as estimated in force of the TTIP agreement (a honeyed word for unification), will be effected by those large and medium-sized companies able to support transatlantic marketing costs. Small local companies operating on a regional basis would have their prices undercut and the Mediterranean agricultural industry might see their tariff barriers removed with imaginable consequences. It is reasonable to expect that ensued competition will negatively impact local small companies in the Union causing a prolonged if not renovated crisis in Western Europe. As a consequence governments could be forced to reduce the “social welfare” to the level of the US in order to balance their budgets, swayed by increased unemployment.
Moreover, the agreement closed with Australia, Mexico etc. envisages that industry corporations who have invested in a country may sue that government if a new-introduced law goes against the investment done by that company. This article has been put on hold (frozen) for the EU; why frozen and not deleted?
A study by the Centre for Economic Policy Research suggests that EU households could see their average annual income increased by a max of € 500 ; but has the Trade Commissioner calculated the subsistence cost for those possibly losing their job?
Although plug & socket specifications have been set since years, the European Union has not succeeded yet in imposing their standard type among member countries; unlike in the US, TV channels cannot be seen in all member countries, some not even on subscription!
Mobile phones work still in roaming among countries while US users can subscribe to a flat rate for the whole Federation; motorway rates – where charged – are set on diverse criteria within the EU. Aren’t those the priorities in the European Union?
For what transpires, the TTIP agreement consists of the two “political subjects” submitting themselves to the same product specifications and trade rules governed by a unique judicial authority; a straitjacket useful to whom? Is the World Trade Organization, setting standards by product, no more a suitable option?
In terms of unification, the USA may succeed in Europe in what the EU has not succeeded since its inception.Author : Elio Pennisi