This short talk presents a brief background to the Transatlantic Trade & Investment Partnership (TTIP), also known as TAFTA, and explains why the predicted benefits are far smaller than are generally believed. It also explores an important but neglected aspect: the likely costs.

1.
transatlantic trade &
investment partnership
glyn moody

2.
transatlantic trade
 EU+US
 one half world's GDP
 one third of world trade flows
 EU<->US trade €500bn (2012)
 trade agreement to reduce costs
 tariffs
 under 3%
 TTIP is not a traditional trade
agreement (except in its lack of
transparency)

3.
non-tariff barriers (NTBs)
 different regulations in EU, US
 health, safety, environment,
labour, financial
 EU bans on GMOs, chlorine washing
for chickens, hormones in beef;
greater data protection
 for citizens
 welfare enhancing
 cultural expressions
 for TTIP: "trade irritants"

4.
tackling NTBs
 levelling down - EU says no
 levelling up - US says no
 mutual recognition
 chemicals in cosmetics
 1300 ingredients banned in EU
 11 ingredients banned in US
 1289 chemicals banned in EU could
be used in US products sold here
 (future) convergence

5.
regulatory council
 "living agreement" - De Gucht
 "Horizontal Chapter on Regulatory
Coherence"
 "impact assessment/cost benefit
analysis on proposed regulatory
measures covered by this Chapter,
should assess impacts on
international and in particular
transatlantic trade"
 dilute/block legislation at a
very early stage

6.
investor-state dispute
settlement (ISDS)
 basic idea is to protect
investors from arbitrary
government actions or weak court
systems in developing countries
 achieved by allowing companies to
take action directly against
governments
 using specialist external
tribunals
 3 lawyers, meeting in secret

7.
ISDS (1)
 over 500 cases (since 1987)
 Ecuador - oil contract ($1.77bn)
 Germany - phasing out nuclear
power (€3.7bn; Energy Charter)
 Canada – fracking ban ($250m)
 Canada - Eli Lilly patents ($500m)
 Australia, Uruguay – adding
warnings to cigarette packs ($2bn)
 2013 saw 57 more; Czech Rep. (7),
Spain (6), Croatia (2), Hungary
(2), Slovakia (2), Greece (1)

8.
ISDS (2)
 EU - fracking, GMOs, pesticide
bans; labour laws; software
patents etc
 14,400 US companies with 50,800
European subsidiaries
 ISDS a ticking trade time-bomb
 even European Commission trying
to "improve" ISDS
 chilling effect on future policy
 Canada's experience under NAFTA

9.
do we need ISDS?
 "US investment in the EU is 3
times higher than in all of Asia"
 "EU investment in US is around 8
times the amount of EU investment
in India and China together."
 US invested €1.3 trillion in EU
 EU invested €1.4 trillion in US
 no problem to solve; no need
 insurance (World Bank)
 ISDS = socialisation of risk

10.
TTIP benefits (1)
 Bertelsmann Stiftung (June 2013)
 "The leveling of the barriers with
the USA thus leads to a decline in
trade that came about as a result
of preferential treatment of
intra-European trade flow"
 intra-EU exports fall by 25%-41%
 drop by €650bn/year
 TTIP would hollow out the EU
economically

11.
TTIP benefits (2)
 Centre for Economic Policy
Research (March 2013)
 for European Commission
 tariffs only: extra EU GDP of
€24bn - 0.1% of GDP
 ambitious comprehensive:
 50% of "actionable" NTB removed
 extra EU GDP of €119bn - 0.48%
 extra €90bn for US GDP, extra
€100bn for rest of world

12.
TTIP benefits (3)
 "ambitious comprehensive"
forecast gives extra 0.48%
 in *2027* - 0.48% is cumulative
GDP boost over 10 years
 GDP growth is measured year-on-
year - how much GDP goes up *in a
year* (UK 2013: 1.7%)
 on average, extra GDP growth per
year resulting from TTIP will be
O.05%

13.
TTIP costs
 OFSE report (31 March 2014)
 for GUE/NGL (Group of the European
United Left/Nordic Green Left)
 forgone tariffs - €30bn
 labour adjustment costs - €10bn
 forgone tax income and social
security contributions - €7bn
 ISDS - billions of Euros
 social costs of regulatory change
 health costs, ecosystem costs,
amenity loss, cultural loss

14.
is it worth it?
glyn.moody@gmail.com
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