Another "free"- trade agreement under the radar: the TTIP

[BelgianMadCow]

TTIP= Transatlantic Trade & Investment Partnership

A study has been published today showing the benefits of the TTIP, by the Atlantic Council, the Bertelsmann foundation and the british embassy in washington.

TTIP and the Fifty States: Job Growth from Coast to Coast
source: the Atlantic council

In summer 2013, representatives of the United States and European Union opened negotiations to establish this new trade partnership, which would deepen the relationship between the world’s two leading economies and create the world’s largest free trade area.

If successful, this effort is expected to significantly strengthen the European and American economies by aligning the two regions’ regulatory regimes, without compromising environmental or product safety standards. This will dramatically increase transatlantic trade and investment flows and support hundreds of thousands of related jobs—creating as many as 750,000 new jobs in the United States alone.

TTIP also figures to be a key driver of wealth creation across the transatlantic economy for years to come. By lowering the costs of trade and driving job growth in a range of industries, American households (defined as a family of four) stand to gain approximately $865 annually while their European counterparts gain $720.

This mirrors the good-news show Karel De Gucht (EU Trade Commissioner) has given at the start of negotiations.

I went looking for this study because of an article about it in the Frankfurter Allgemeine. That article has this brilliant bit (translation mine):

The institutes stress the fact that exports aren't the only driver for the expected job growth. At least equally important is that the lowering of barriers to trade and the higher competition wil lead to more efficient production and thereby lower prices. Through the increased production, the incomes will rise, which will make extra consumption and employment in other sectors possible.

Bullshit economics of the first degree, imho. There are several non sequiturs in that paragraph.

To finalize my post, here is a leaked draft of the TTIP negotiation framework. Just like the TPP, it's much more about (de)regulation and investment protection than it is about trade.

Just saying, with the awareness on DU about the TPP quickly rising, be aware that the battle should be waged on two fronts. The two agreements are supposed to be very alike, and have been described as a pincer move. Personally, I think "going local" is a way forward through the crisis, and solves many problems at once. I see the TPP/TTIP as a full frontal attack on that. The leaked draft says that local authorities such as state and municipalities are to be bound by the TTIP - "all sub-central authorities should effectively comply" - p 9.

All your base are belong to us.

[Lasher]

1. The US-EU trade deal: don't buy the hype

The first point to recognize is that the promised pot of gold from this trade deal is illusory. Last week, the media held out the promise of an increase in US GDP of $122bn from the trade agreement. The facts that this referred to GDP in 2027, and that the $122bn would be in 2027 dollars, were absent from the discussion.

It also might have been worth mentioning that this $122bn was a best-case scenario in the study that was cited (pdf). This figure assumed that the trade agreement included all plausible reductions in tariff barriers.

The study also gave numbers for a deal that it described as "less ambitious" and, presumably, more realistic. Its projection of the increase in 2027 GDP in this scenario is 0.21% of GDP. That is roughly equal to a normal month's growth. Since it will take 14 years to achieve this gain, the boost to growth would be just 0.015 percentage points annually.

If that sounds too small to notice, you've got the picture. And just to be clear, this study was produced by an organization in the United Kingdom, the Centre for Economic Policy Research (CEPR),* that is for the most part very supportive of the trade deal.

<snip>

As far as the projected gains to the economy from the deal, finding a quarter on the street is the right comparison. If we apply the projected income gain of 0.21% to the projected median personal income in 2027, it comes to a bit more than $50 a year. That's a little less than 15 cents a day. Don't spend it all in one place.

http://www.theguardian.com/commentisfree/2013/jul/15/us-trade-deal-with-europe-hype

Figures don't lie, but liars figure.

[BelgianMadCow]

2. Wow. Thanks for the addition

I hadn't seen that analysis.

[Lasher]

3. Your excellent OP deserves the contribution.

My linked article is worth the read. It helps us better understand the true motives of those who are actually behind these 'free' trade agreement lies.

[BelgianMadCow]

4. Here are the true motives

from your link:

As growth policy, this trade deal doesn't pass the laugh test, but that doesn't mean that it may not be very important to a number of special interests and, for this reason, bad news for most of the public. Since conventional barriers to trade between the US and EU are already very low, the focus of the deal will be on non-conventional barriers, meaning various regulatory practices.
In reality, this trade agreement is not about promoting prosperity for all, but powerful industry lobbies trying to dodge regulation

It then follows up with a list of concerned industries (you know, the ones that ARE at the table) and what they stand to gain.

[DJ13]

5. Through the increased production, the incomes will rise

Since 1980 US productivity gains have gone almost entirely to the bottom line, not into wages.

A 60% increase in productivity since 1980 has left wages flat when inflation is factored in.

We arent buying this bullshit anymore.

[Populist_Prole]

12. That's what makes me me angriest of all

The condescending way they push trade. They still use the same canards as though this is the absolute first time we've heard of the theory and their arguments in favor of it; and, as though we haven't seen the negative effects of "free trade" over the past decades. Do they honestly and truly believe we were born yesterday?

[SomethingFishy]

6. I'm not an economist but I was here for NAFTA

and that worked out real well

Not to mention that most of the talks on this trade agreement are being held in secret. Nothing fishy there. I guess it's a matter of national security.

[BelgianMadCow]

10. The secrecy is equally bad for the TTIP as the TPP

apart from the sales pitch by De Gucht, zero information. No cosmumer advocacy or unions in on the talks either.
I've gotten it on the radar of an online newspaper, co-founded by the unions over here, so I at least have hope some people are awake. And as far as I know, the end result will have to be presented to the EU parliament, and not with fast-track authority, so we'd have our chance to speak up still.

By the way, not being an economist probably helps

[antigop]

7. Thanks, Belgian and Lasher for the info in this thread. K&R nt

[jsr]

8. Recommend

[Hydra]

9. More free trade! Yay!

I love how they buff it until it shines, but there's no substance under the glitter.

[pampango]

11. If you are happy using the WTO to deal with trade issues, don't change anything.

I can imagine a trade deal with Europe that would be good - one that makes the US compete fairly with Europe by forcing us to adopt European-style labor, environmental and regulatory standards. I can also imagine a deal that would be bad - one the ended up with Europe lowering its standards to our level in order to compete with us. Europe has more people and a bigger economy. I hope they use that power in their negotiations with us.

I frankly think Obama is wasting his time. He may be aiming high in terms of his goal for this, but the only deal the House will approve is the bad version. The tea party that controls the House will want no part of a deal that raises labor, environmental and regulatory standards. Heck, according to polls right wingers don't like trade period, so they may not approve of any deal of any sort, particularly one negotiated by the current president.

[Enthusiast]

13. Apparently those pushing these trade deals hate us for our freedoms.......nt

[magical thyme]

14. K&R This and TPP are my next red line

Since Summers graciously bowed out when he realized how truly despised he is, he has fallen off my list.

I believe raising hell with our reps helped to force PNAC and the MIC back to their evil drawing boards.

I believe raising hell with our reps over this will also help to force the 1%ers back to their white boards as well.

Luckily in Maine we have real-world litigation experience -- tiny, poor, rural village by tiny, poor, rural village -- with Nestle's evil plan to steal control of water. Their CEO, btw, is the one on record as stating that water is not a human right and rightfully should be privatized.

I expect even our lunatic teabagger Gov. 38% would not be happy with this. I have no doubt that our senators, congresspeople and population will not be happy with this either.

But I still intend to send them a reminder of the implications of these so-called trade deals for our very good aquifer.

[Democracyinkind]

15. These agreements are about erecting parallel legal structures for corporations...

... totally removed from anything that happens at the ballot box. The EU as it exists today is just as - or even more - corporatist than the US. My job has given me some insight into the inner workings (I do not work for the EU, though) of it and I couldn't be more disappointed.

The TIPP, if passed and ratified, will create a parallel bureaucracy that will be impossible to get rid of.