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What is the TTIP, who and what does it affect, and who ultimately benefits from it? Transatlantic Trade Investment Partnership is currently still being negotiated by the United States (US) and the European Union (EU [comprised of its 28 countries]). Through these negotiations, these countries are trying to reduce (or eliminate) tariffs, customs duties, red tape (excessive regulation or unbendable rules), and restrictions on investment on each side of the Atlantic Ocean. As of right now, for example, the US apple (agricultural) industry pays a 7% tariff when exporting their products to Europe, but with the help of TTIP, all industries affected (including, but not limited to, the chemical, cosmetic, engineering, high technology devices and instruments, pharmaceuticals and automotive), would be put on the same level as other suppliers, overall increasing competition, and reducing prices.
If TTIP is signed, Europeans companies, both big and small, would receive better access to an overseas market. Companies would be allowed to export more, win government contracts, import more US goods/services needed to make final products, as well as invest in the US economy more easily. On the down side, this could be costlier to smaller firms that have difficulty meeting the US requirement standard for their products. Negotiators are pushing for compromises where both (US and EU) standards meet. For example, an idea is that European exports to the US only need to meet the European standards. This could cut down on the spending that small businesses would need to do to “perfect” their product for overseas usage when both standards are already somewhat similar.
The United States agricultural products get hit by an 18% tariff when being sent to Europe, while EU’s exports to America are only about half of that. With the elimination of EU tariffs on US products, including innovative and high technology products (industrial and electrical machinery, precision and scientific instruments, chemicals and plastics), both parties will prosper.
In areas such as the automobile and chemical industries, the US and EU don’t recognize each other’s regulations. In the automobile industry, US cars cost 25% more in Europe because US manufacturers must test US crash dummies as well as European crash dummies, even though both dummies are practically the same size, and the tests are designed measure the same goal. The same pretty much goes for the chemical industry. By coming to an agreement on the regulation of chemicals, a significant reduction in red tape would be needed. If regulators are able to come to an agreement on these regulations, the same tests in US and EU on the same chemicals could be conducted. These negotiations would establish an agreement on how to classify chemicals, companies (on both sides) would save time and money, and products for consumers would be cheaper and more accessible
With the positives of increased purchasing power, more jobs, cheaper products, and more choices for consumers AND lower costs, and more opportunities for businesses, let’s bring up some negative things that could happen if TTIP is signed.
First, with increased competition, there is usually always a loser. This means that the disappearance of some jobs in some sectors is inevitable. To combat this, the Netherlands is looking for compensation and is looking for ways to compensate job loss. Along with job loss, there are concerns that the European standards on food safety, privacy, the environment and labor conditions might deteriorate to a lower standard than is already in place.
There are also concerns that lower and middle income countries and their products could be affected much more negatively since they are not as wealthy as other countries. The Netherlands believes that TTIP should benefit both high and low income countries without benefiting some, at the expense of others.
And last but not least, there are concerns that companies will be able to do as they please. They will be given more power and ability in the international arena, and some civil society organizations believe that TTIP will give companies too much power. The EU is pressing for a balanced investment system that will prevent the abuse of power from being possible.
The push for the agreement to be signed has been assisted by the Transatlantic Business Council (TABC), the European Automobile Manufacturers Association (ACEA), the Chemical Industry Council, as well as many companies among them, such as, Apple, IBM, Microsoft, Shell, Exxon, Siemens, HSBS, City Bank, Proctor and Gamble, Coke, BMW, Ford and Samsung.
How could Russia be affected if TTIP is signed? The flow of goods from America to Europe may not affect Russia very much, but since Europe is dependent on Russian oil, open barriers in Europe from the United States may impact Russian energy markets. Causing prices for oil to be more competitive (and lower) as well. TTIP has also been considered a tool to weaken Russia. The author of “Vladimir Putin hates the TTIP,” James Stavridis, a retired U.S. Navy admiral and recent NATO Supreme Allied Commander Europe, sees TTIP as a geopolitical tool to weaken Russia.
So far, the main beneficiaries of TTIP are Germany, the United States, and the United Kingdom. Germany could expect 181,000 news jobs and a per-capita income increase of 4.68%. The US and the UK, could have an estimated per Gross Domestic Product (GDP) increase of 9.7% and 13.4%, respectively, and would benefit from above 1 million, and 400,000 new jobs, respectively. Ultimately, if signed, the world would benefit from TTIP. TTIP would increase the Global per-capita GDP by an estimated 3.3% and would create an additional 2 million new jobs. Both of these numbers do take into consideration the inevitable losses that some countries could experience. So far, round number 15 of the TTIP negotiation took place in October of 2016, but no new information has been released as to when the next round will be held.