Editor’s Note: The Center for Transatlantic Relations (Johns Hopkins/Paul H. Nitze School of Advanced International Studies) has release a detailed analysis of the ever-deeper economic ties between the US and the Europe. The complete study includes the Executive Summary of The Transatlantic Economy 2014, Transatlantic Economy 2014, Vol. 1 – Headline Trends and Transatlantic Economy 2014, Vol. 2 – State-by-State and Country-by-Country.
The Importance of TTIP
» 2014 is a pivotal year for the Transatlantic Trade and Investment Partnership (TTIP).
» A transatlantic zero-tariff agreement could boost U.S. and EU exports each by 17%—about five times more than under the U.S.-Korea free trade agreement.
»Even greater gains would be realized through reductions in non-tariff barriers and aligning regulatory standards. Eliminating or harmonizing half of all non-tariff barriers on bilateral commerce would add 0.7% to the size of the EU’s economy and 0.3% to America’s economy by 2018. Such an effort would be 3 times more beneficial to the U.S. and EU economies than current offers on the negotiating table in the Doha Round. Even a 25% reduction in non-tariff barriers could lead to a $106 billion increase in combined EU and U.S. GDP.
» Eliminating barriers to services would have a substantial impact on jobs and growth, since most American andEuropean jobs are in the services economy, and protected services sectors on both sides of the Atlantic account for about 20% of combined U.S.-EU GDP—more than the protected agricultural and manufacturing sectors combined. Removing services barriers would be equivalent to 50 years’ worth of GATT and WTO liberalization of trade in goods.
» TTIP’s global impact could be even more important than opening transatlantic commerce. Transatlantic alignment on basic standards and norms is likely to set the tone for high, WTO-plus global standards; failure will mean lowest-common-denominator standards set by others.