WASHINGTON — The prospect of the Transatlantic Trade and Investment Partnership (TTIP) constitutes a signal policy opportunity between the United States and the European Union.
Hailed by some as potentially the largest trade agreement in history, TTIP would reduce trade barriers by enacting a non-tariff paradigm in which myriad public- and private-sector players could spur growth, create jobs, and do business in markets previously inaccessible.
TTIP’s promises have not won all hearts, however. Detractors see the deal as a menace to their own interests, even to national sovereignty. TTIP could also fail on purely procedural grounds: given recent resistance to legislation on the “Fast Track” Trade Promotion Authority (TPA) framework, the US Congress inspires only mild confidence.
A dose of cautious optimism is therefore appropriate about the chances of success for the proposed TTIP trade regime.
The deal benefits from a gust of support among policymakers in Europe and the United States. Karel de Gucht, the EU’s trade commissioner, has said that TTIP will “fully enshrine democratic prerogatives” espoused by each continent.
House Ways and Means Committee Chairman David Camp (R-Mich.) said last month that a new TPA could be secured in early 2014, according to Reuters. Victoria Nuland, US Assistant Secretary of State for European and Eurasian Affairs, has argued that “TTIP can be for our economic health what NATO has been to our shared security.”
The numbers seem to support Ms. Nuland’s bullish outlook. Thirteen million EU and US jobs are currently supported by the transatlantic economy, a figure that would increase if TTIP were to become a reality.
According to the European Commission, the agreement’s annual benefits are calculated at $165 billion for the European Union, $124 billion for the United States, and $137 billion worldwide. The transatlantic share of global GDP, already at roughly 50 percent, would grow even larger.
Strategically, the potential benefit is just as strong: TTIP would establish a Western-oriented economic system of consequence, push the fallout of the 2008 financial crisis decisively into the past and provide the most unified transatlantic response to global competition in decades.
Yet, detractors pose significant obstacles to the deal’s passage. TTIP’s opponents hail from a broad spectrum of interest groups and experts, some of whom warn against any compromise of national sovereignty.
Instead, organizations like the Heritage Foundation vouch for “mutual recognition rather than regulatory harmonization,” which would rule out the possibility of a “transatlantic managed market” seen as detrimental to US economic and political autonomy. Likewise, advocates for labor unions, farm subsidies and intellectual property stipulations have each expressed reservations that threaten a comprehensive transatlantic trade program.
Hurdles in the US Congress could also pose challenges, which means international-level concerns may be moot if the United States fails to rally consensus at home. A bipartisan group in the US House of Representatives has voiced opposition to new TPA legislation, saying they are not being consulted adequately on the negotiations underway, and that a new TPA might deny Congress its constitutional right to review trade agreements.
In December 2013, 194 House members from the same group signed a letter to President Obama expressing their view that “Fast Track is simply not appropriate for 21st century agreements and must be replaced.” If the number of members of Congress opposed to TTIP should grow, odds for the deal’s passage will shrink proportionally.
On the European side, hackles have been raised over issues like investor-state dispute settlements, a legal mechanism by which corporations can reportedly sue governments through non-state arbitration panels and do so away from the public eye.
Though the advantages of closing the TTIP agreement are enormous, the possibility of failure is real and rooted in legitimate democratic concerns. The European Union and the United States will have to spend more time reconciling the priorities each has long pursued.
TTIP bears the potential for great benefit to its stakeholders, but the road toward completion demands a strong and sustained measure of caution along the way.
William C. Fleeson is a foreign affairs professional based in Washington. He is the founder of the blog, "EurAmerican: Transatlantic Politics and Culture."