The European Union and the United States are each others main trading partners and enjoy the largest bilateral trade relationship in the world. Transatlantic trade flows (goods and services trade plus earnings and payments on investment) averaged $4 billion each day through the first three quarters of 2011. The total stock of transatlantic investment exceeded $3 trillion in 2010. In 2008 EU/US combined economies accounted for nearly 60 % of global GDP, approximately 33% of world trade in goods and 42% of world trade in services. Both partners make up for more than half of Foreign Direct Investment (FDI) in each others economy.
However, for all its value and importance, the EU-US trading relationship still suffers from numerous obstacles, preventing it reaching its full potential to provide growth and jobs. To put this into perspective UK goods such as sportswear have a 32% tariff when exported to the US, this ultimately affects the competitive price of the product in the US market. Moreover, the intellectual property variation between the US and UK means that musicians are not rewarded when their songs are played in the US outlets. Moreover, in the US only 32% of the US procurement market is currently open to EU businesses. For instance all internal US flights can only be operated by US airlines, they are not subject to international competition, therefore flight prices remain high and it restricts the connections that EU flights can make in the US. Whereas in Europe the US are granted greater freedoms, it is this imbalance which has caused much irritation. There are many barriers that we can reduce to increase opportunities for EU-US trade.
The European Commission estimates that a comprehensive deal with the US would benefit the EU to the tune of €120bn, which translates on average to an extra €545, (£433), in disposable income each year for a family of four in the EU. This is the best value stimulus that Europe can afford. For the UK in particular exports could increase by over £400million.
The aim of this agreement is to increase trade and investment between the EU and the US by unleashing the untapped potential of a truly transatlantic market place. The agreement is expected to create jobs and growth by delivering better access to the US market, achieving greater regulatory compatibility without lowering standards between the EU and the US, and paving the way for setting global standards. The European Council adopted a mandate for negotiations on 14 June 2013 which has since been made public.
The Transatlantic Trade and Investment Partnership (TTIP) will consist of three pillars:
• Market Access - Aims to lower tariffs, more open services markets and greater access to public procurement.
• Regulatory Co-operation - Aims to achieve as much regulatory convergence and mutual recognition as possible while seeking to remove as many of the technical barriers blocking trade as possible without lowering any safety standards on either side of the Atlantic.
• Rules - Aims to develop a common approach to global trade issues following the failure of the Doha Round
A World Institute led study which looks at the impact of TTIP for each Member State in the EU. This study demonstrates the benefits and costs for the EU of an ambitious TTIP.
Studies and Reports