When traveling between the United States and Europe, one of the most startling differences that I observe is the concoctions that we put on our French fries. First of all, we can’t agree whether or not these delicious fried potatoes should be called fries, chips, or “freedom fries.” Once served to us, Americans love their ketchup, continental Europeans love their mayonnaise, and the occasional Brit won’t eat their chips without a particular brand of brown sauce named after Parliament. However, we all can agree that, while bad for you, fried potatoes are delicious.
The EU and U.S. also mostly agree that international trade is a good thing. Trade stimulates job creation and incentivizes economic growth. Markets are often opened by the implementation of preferential trade agreements between two jurisdictions. The U.S. and EU are currently negotiating the Transatlantic Trade and Investment Partnership (TTIP) to strengthen the ties between the two continents and to stimulate growth.
Many expect the recently-negotiated Trans Pacific Partnership (TPP), which removes most tariffs, duties and fees between TPP member countries and the US, to lay the groundwork for the TTIP agreement and accelerate negotiations.
With the implementation of TTIP, there is great controversy as to what the benefits will be between the two major nations. People understand trade agreements as “trade incentives” and do not understand why the U.S. and EU would even need “trade incentives,” as these are typically used with developing countries to encourage jobs and growth. Most people see it as the U.S. and EU are so big that this free trade agreement wouldn’t have the same impact. This is where most people may be mistaken. Regardless of the size of these two major economic powers, there are major incentives for implementing this trade agreement. Today, the U.S. is the EU`s biggest export market and together the two customs territories account for half of the world`s GDP.
TTIP also differs from previous trade agreements struck by the EU and U.S. with other countries because the text focuses on regulatory co-operation. By streamlining the regulatory environment of the two customs territories, this reduces the regulatory cost of a company in one market complying with the regulations in another when exporting their product.
According to a report released by the European Commission, referencing an independent study by the Centre for Economic Policy Research in London, an ambitious and comprehensive Trans-Atlantic trade and investment partnership could bring the EU economic gains of €119 billion a year once the agreement is fully implemented. The transatlantic economy currently supports 15 million jobs between the U.S. and EU.
Negotiations on the text of TTIP have not yet been completed, and we don’t expect this to occur until sometime in 2016. In the meantime, Tradewin recommends that you sample a bit of the fare across the atlantic. If you’re sitting in Wisconsin, break away from the Canadian influence, hold the gravy and cheese curds on your fries, and try a little mayonnaise. If you’re in Amsterdam, feel free to give a bottle of ketchup a squeeze.
To see how these negoiations will impact you, contact a Tradewin representative for more information.