Well, it’s been a rocky road for neo-liberal trade agreements this year. As the bigwigs of the European Commission and the high overseers of the US government meet for their 13th consecutive meeting about the framework of the TTIP and its effects, it’s become blatantly clear that those who are pushing for it are not exactly coming clean about the total implications of this agreement.
After the recent debacle over its impact on the agricultural sector of France, a lot of uncertainty has been thrown into the air. In fact, a lot of people might not even know what this whole trade agreement is actually meant to do. This is not surprising; the whole deal is shrouded in secrecy, with many of the more important details left completely in the dark.
Hopefully, we’ll be able to sort that out.
TTIP: What is it doing in my Europe?
Let’s get the nitty-gritty over and done with so that we can focus on the bigger picture. The Trans-Atlantic Trade and Investment Partnership is difficult to explain, as even harder to define. Part of this is because of how much is kept in secrecy. These discussions are primarily being held by the EU, the US Government, and some very large multi-national corporations. The gist of the TTIP is as such:
- Elimination of all tariffs
Getting rid of the pesky barriers to trading which stops the US from selling to European markets at a competitive level, and vice versa.
- More goods
Increase the number of goods sold between the European market and the US market.
- Cheaper goods
Reduce the overall costs of goods by deregulation. This is the big one, because the EU and its markets are all about regulation of goods and designing specifications for as many goods as they can to ensure proper competition in the market.
There are a few reasons for this deal to take place, though they haven’t really been known to use plebeians. Ultimately, it is of the opinion of the US that we need to improve the rate at which we trade between each other.
The Dutch implications
How do the Dutch benefit from this? I’ve spoken briefly about the agricultural impact on France being of major concern, as their economy is mostly based on agricultural produce. But the Netherlands is somewhat different. We have the mouth of the Rhine river, and one of the largest ports on the planet. Our economy is based on trade: exportation and importation. As such, the TTIP has a significant impact on our economy as a whole.
Firstly, around a third of our GDP is made on trade. Furthermore, 59% of the population work for companies that import and export their goods and services. With the barriers to trading eliminated, companies will be able to save more of their revenue, which will lead to more goods exported, and more goods imported. Most of these goods will be traveling to and from the Europort. To add to this, the companies that do export their services will be able to spend their larger amounts on expansion and investment, which means more jobs. Of course, companies which don’t export their goods and services will be incentivized to do so with the barriers to trading eliminated.
The Ecorys Research Agency conducted a study on behalf of the Dutch government to forecast the potential effects on the Dutch economy. They found that the Netherlands has a potential to earn anywhere from €1.4 and €4.1 billion. However, this is hotly disputed; some studies show that in the long term, the TTIP overwhelmingly benefits the US, and not even at a comparative level.
Despite this, our economy is already closely aligned to the States. We’re their third largest investor, and they’re our largest, non-European investor. It stands to reason that, given our investment, they would want our economy to grow so that their investment increases, right?
What’s the hold up?
The hold up is actually pretty simple to understand: the states involved don’t have a clue about what is going on. They don’t know jack about the TTIP, and they’re left in the dark just as much as we are. The EC has its negotiations with the US, and that is where the magic is happening. However, there’s obviously some degree of disagreement between what Europe wants, and what the US is offering. After all, you don’t have 13 consecutive negotiation meetings if there are no problems at all.
From what I can gather, the disagreements come from the EC trying to establish enough comparative advantage for all of its member states. The US has one simple aim; open trade up of that its product can better flow into the European market. The European aim is to ensure that their products can make it to the US, and enough products from each state to make it worth while for all the member state of the European Union, while also making sure that the product standards of the EU can be upheld by the lesser standards of the US.
Where does this leave us?
Ultimately, what we’re seeing here is Paradigm shift. For up to 70 years, the US has been the strongest economic, military, technological, and political force on the planet. Sure, it had a little competition from the USSR, and now China and the rest of the BRICS nations are actively creating multi-national institutions to rival those created by the US. However, slowly but surely, the US has been losing its grip.
The TTIP represents their attempt to strengthen the geopolitical relationships between the US and their allies. As it stands, the European single market has done wonders for those state privy to the continental benefit, but to outsiders, it’s a serious hindrance. Bridging that gap between the largest economic market on the planet, and the single largest economy is vital if the US wishes to retain it’s socio-economic grip on the globe.
Europe needs to consider the geo-strategic benefits as well. As of now, the US and its allies are slowly losing its ability to dictate global policy, and are losing their diplomatic power. The TTIP would allow the combined efforts of the EU and the US to expand their influence. The EU also needs to contend with the fact that our only global legitimacy comes from our economic strength. We’re clearly not a military power. With the US also pursuing a similar trade deal with its Asian allies, if the TTIP fails to deliver, then the EU could start falling very far behind its regional counterparts. Obviously, a strong trade agreement between the EU and the US would help the EU stay as a economic power.
Big long words, followed by serious implications. Then, simple words about the TTIP and how it solves the problems. What could possibly go wrong?
Ultimately, I’ve tried my best to deliver the facts as impartially as I can, though I’m not going to lie; I don’t think any good can come from the TTIP. Neo-liberal policy has had one major effect on states subjected to it. Goods from other countries start flooding their markets. The only people who truely benefit are those selling the products. Of course, companies benefits in two ways: selling cheaper products, and cutting their costs. This is not the first time we have seen this happen: NAFTA had almost the exact same implications with a significant reduction in pay and a significant increase in goods being imported and exported. Mexico got shafted by that trade deal, while the US managed to get away with losing a few jobs, but almost all of the trade benefits.
My final line of argumentation is this: if this deal was actually for the benefit of more than just the corporations and the political elite, wouldn’t we know more about it? Why would they have to hide it in the first place?
Recently, Greenpeace has delivered a massive dump (riskiest click of the day) revealing some of the details regarding the TTIP. If you’re interested in the economic framework and its environment implications, I recommend checking it out, and giving it a looksee. (We’re not responsible for any watchlists you’re put on afterwards)