What Was the Transatlantic Trade and Investment Partnership (TTIP)?
The proposed Transatlantic Trade and Investment Partnership (TTIP) was a proposed comprehensive trade deal between the European Union (EU) and the United States with the aim of promoting trade and economic growth.
The TTIP would have been a companion agreement to the Trans-Pacific Partnership (TPP), from which the United States withdrew in 2017. It was billed as the biggest trade agreement ever negotiated at the time, but negotiations ended in 2016 without an agreement.
- The Transatlantic Trade and Investment Partnership (TTIP) was a proposed bilateral trade and investment relationship between the U.S. and the Eurozone.
- Proponents advocated for lowering trade barriers and increasing investment between the two regions, while critics argued the deal would only benefit large corporations.
- Many Europeans worried that reduced trade protections would allow the sale of low-quality American goods.
- Negotiations for the TTIP were shrouded in secrecy. In 2016, Greenpeace leaked secret files from the negotiators, prompting a public outcry.
- Negotiations ended in 2016 after three years of back-and-forth without a signed agreement. TTIP negotiations that had been carried out are now considered obsolete and no longer relevant.
Understanding the Transatlantic Trade and Investment Partnership
The TTIP negotiations were launched in 2013 and ended without a conclusion at the end of 2016. There was some controversy surrounding the agreement because the negotiations were not considered by some other countries to be transparent.
The objectives of the deal were to improve trade conditions between the EU and the United States to boost their economies. The agreement was opposed by certain groups such as charities, NGOs, environmentalists, and unions because the agreement would have reduced regulations in areas such as food safety and banking, mostly benefiting large corporations.
Proposed Actions from the TTIP
The TTIP proposed various tools to boost bilateral trade.
- Eliminate both tariff and non-tariff barriers on goods (including agriculture, industrial, and consumer products)
- Lower trade barriers on services
- Eliminate customs duties on digital commerce and IT (including movies, music, TV shows, and video games)
- Introduce comparable rights for investors in participating countries
- Reduce or eliminate artificial or trade-distorting barriers
- Enhance customs cooperation among the EU and the United States
- Ensure equal labor rights in the EU and the United States to avoid unfair labor competition
- Obtain mutual agreement on environmental standards, intellectual property rights, and product standards
Transparency, Uncertainty, and Criticism
The secrecy surrounding the negotiations and a lack of transparency was the root of harsh criticism of the TTIP. In 2016, Greenpeace—an environmental activist group based in the Netherlands—leaked 248 classified pages from the negotiations. The documents revealed the negotiating positions of the United States and the EU and showed significant discrepancies in certain areas.
For example, in Europe, critics were arguing that the EU would have to lower certain standards, such as permitting imports of genetically modified food—which is highly regulated in the EU—to continue negotiations with the United States. The majority of America's major crops contain genetically modified organisms, and excluding these products from export markets would place a burden on American farmers and food producers. European officials flatly denied that the EU would lower its standards for a trade agreement.
Proponents of the TTIP argued that the agreement will liberate global trade and create millions of jobs. Others considered that any positive economic effect on US and EU households would be only minimal.
Negotiations on the Transatlantic Trade and Investment Partnership (TTIP) stalled in 2016. Three years later, the European Council declared the negotiations "obsolete and no longer relevant."
Advantages and Disadvantages of the Transatlantic Trade and Investment Partnership (TTIP)
Proponents of the TTIP predicted that both economies would benefit from increased trade as a result of lower tariffs and trade barriers. For example, a 2014 webpage published by the government of the United Kingdom argued that "TTIP will make it easier for businesses in the EU to access a market of more than 300 million American consumers," due to the reduced costs of cross-border trade. The same page claimed that "TTIP will benefit the consumer by widening the range of products available. It will also reduce trade costs, leading to cheaper goods, and increase job opportunities and wages."
However, opponents in both countries believed that the TTIP would decrease protections for local workers and consumers. A 2014 working paper by the Global Development and Environment Institute at Tufts University. cast question on the rosy predictions of EU policymakers. In contradiction of official estimates, the researchers projected that "almost 600,000 jobs would be lost as a result of TTIP." Further, the reduction in trade and labor protections would cause a "transfer of income from wages to profits" resulting in a net loss in terms of employment and GDP.
There were also concerns that the TTIP could erode the consumer protection standards that had been established in both countries. "Americans pump their cattle and pigs with growth-promoting hormones banned in the EU," an article in The Guardian said, noting the liberal use of pesticides and genetic modifications in American farming. If TTIP were enacted, American agriculture could flood the strictly regulated European market.
Would reduce the cost of imports and exports between the U.S. and Europe
Would benefit certain consumers and SMEs in both countries.
Advocates claimed it would increase employment and reduce consumer expenses, although this is disputed.
Could have cost hundreds of thousands of jobs, according to some estimates.
Would have damaged European farmers, due to competition with the low standards of American agriculture.
Negotiations were shrouded in secrecy, raising fears of an opaque agreement.
The Future of the Transatlantic Trade and Investment Partnership (TTIP)
After three years of discussion, talks on the TTIP stalled in 2016 following the leak of confidential negotiations documents and stopped following the election of U.S. President Donald Trump. On April 15, 2019, the Council of Europe declared the TTIP negotiations to be "obsolete and no longer relevant." Any attempt to revive the trade talks would have to restart the negotiations from scratch.
Is TTIP Still Being Negotiated?
No. Negotiations on the Transatlantic Trade and Investment Partnership (TTIP) ended in 2016 with no signed agreement. With the U.K. now separated from the European Union, any new trade partnership would have to be renewed from scratch.
Is There a Current Trade Agreement Between the U.S. and the European Union?
While there is no free trade agreement in force that is as broad as the TTIP, there are more limited agreements between the U.S. and European Union on trade and customs. In 2020 the two parties agreed on a bilateral tariff reduction that would "increase market access for hundreds of millions of dollars in U.S. and EU exports."
What Industries Would Have Benefited From TTIP?
Research by the European Parliament predicted that the TTIP would likely benefit European auto manufacturers, other manufacturing, and processed foods, while metal and electrical machinery manufacturers would likely decline in favor of U.S. competitors. The study also suggested increased innovation and benefits for small-to-medium enterprises.