26 May 2014

TTIP: 5th round of negotiations

European Business Summit (EBS) panellists discussing the TTIP included Karel De Gucht, EU Commissioner for Trade, and Anthony Luzzato Gardner, US Ambassador to the EU, as well as business representatives. Participants agreed that the TTIP is a big opportunity for both sides of the Atlantic. The European Commission is negotiating the agreement on behalf of the EU. In its 2013 impact assessment based on studies by ECORYS and the Centre for Economic Policy Research, the Commission presented potential economic and social benefits of a deal, estimating that this could lead to overall annual GDP gains of up to 0.48 per cent for the EU (or €86 billion in national income) and 0.39 per cent (€65 billion in national income) for the US, once fully implemented (2027). A detailed appraisal of the Commission’s impact assessment, written at the request of the EP’s Committee on International Trade, has just been published. According to Ambassador Luzzato Gardner, a TTIP agreement represents the biggest debt-free stimulus available.

Concerns and protests

Opponents to the agreement contest the Commission’s estimates, they also believe that the process lacks transparency and would mainly benefit big corporations. In addition, concerns have been raised about a possible weakening of environmental and safety standards, for example in the framework of regulatory convergence processes and through rules on investor protection and investor-to-state dispute settlement (ISDS).

State of play in the negotiations

The 5th round of negotiations took place in Arlington (Virginia) this week. The EBS debate mentioned some possible sticking points on the way to an agreement, such as: the inclusion of financial services in the deal, which is supported by the EU and opposed by the US; and different level of expectations on the two sides of the Atlantic, since the US is negotiating at the same time another significant trade agreement – the Trans-Pacific Partnership. EU Commissioner De Gucht considers that the political window of opportunity for the deal is by the end of next year, before the US 2016 elections.

Full press release

Detailed Appraisal of the European Commission’s Impact Assessment

The paper examines the appropriateness and validity of the methodology behind the European Commission’s Impact Assessment (IA) of the Transatlantic Trade and Investment Partnership (TTIP), focusing in particular on the underlying economic model, a computable general equilibrium (CGE). The methodology applied by CEPR for this economic modelling is analysed in depth, together with the assumptions used to make the TTIP amenable to an economic appraisal. The research paper also compares the IA on the TTIP with selected previous empirical economic assessments of EU trade agreements and with a set of alternative studies on the TTIP itself. In reading our findings, two central caveats should be kept in mind that affect any analysis of the CGE model included in the European Commission’s Impact Assessment. First, the TTIP is a rather unusual bilateral trade agreement; and second, the TTIP is so wide-ranging that an alternative approach, such as the so-called ‘partial’ (equilibrium) approach – already a second-best solution – would be totally inappropriate to the case under examination.

Press release

Full study

EESC press release 

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