UK, US See Benefits on Both Sides of the Atlantic in TTIP
UK cabinet minister Ken Clarke held a roundtable last week to discuss opportunities for UK businesses in the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement currently being negotiated between the US and the European Union (EU).
Meanwhile, US trade representative Michael Froman is also pushing for the deal, which he believes could be necessary as tensions with Russia continue to escalate.
The roundtable, which brought together accountancy, legal, management consultancy and financial services firms, was intended to inform the UK government’s position on negotiations with the US. Attendees included representatives from Deloitte, PricewaterhouseCoopers (PwC), the Law Society for England and Wales and Baker Tilly.
The roundtable focused on issues such as data protection, and mutual recognition of regulations qualifications. The UK intends to push hard on all these issues, Clarke said. The UK government is keeping up the pressure to include financial services in the proposed deal, which has the potential to be the largest bilateral trade and investment agreement in history. UK ministers believes that the TTIP – which they hope can be reached by 2015 – could add as much as £10bn annually to the British economy.
Exports of professional services make up about £52bn to the UK economy. The US is the second-largest destination for those exports, worth more than £5bn. “That is why it is so important to agree to a trade and investment deal between the EU and the US that will help to create many more jobs for British architects, lawyers and other professionals,” Clarke said. “By consulting businesses and listening to their concerns, the government can make sure it is best placed to deliver a better deal for British businesses, employees and their families through the EU.
Lord Livingston, minister of state for trade, added that the TTIP has the potential to be the largest bilateral deal ever, and one of the most beneficial to both sides. “Professional and business services are particularly important to the UK, demonstrated by our trade surplus in services,” he said. “Greater co-operation on regulatory issues, better recognition of professional qualifications and simpler visa requirements are just some of the potential benefits of TTIP for British and US firms.”
The EU and US account for 47% of the world’s gross domestic product (GDP) and one third of global trade flows at nearly £1.6bn of trade daily. Aggregate investment stocks are in excess of £2 trillion. UK exports are projected to rise by £18.4bn as a result of the TTIP and UK imports are projected to rise by £19.7bn.
The UK wants a broad agreement that will reduce consumer prices and increase the choice and quality of goods and services by eliminating the vast majority of tariffs, harmonising regulations in both nations and reducing the costs to consumers, and addressing behind-the-border barriers to trade across all sectors of the economy.
EU Energy Needs
At a weekend conference in Brussels, Froman said that the TTIP
could help ease Europe off of Russian energy supplies
, the
New York Times
reported.
There are concerns that EU sanctions against Russia over Crimea control could lead to Russia ultimately restricting natural gas supplies. The country has cut supplies to Europe in the past due to disputes with Ukraine and other nations, which has led to severe shortages in parts of the EU.
Encouraging the export of American natural gas to Europe is “yet another rationale for completing” the trade talks, Froman said. If the TTIP were in place, it would be much easier for the US Department of Energy to grant licences to US companies looking to export shale gas. “If you’re a free trade agreement country, those licenses are deemed to be in the public interest,” he said.
President Obama is scheduled to arrive in Belgium this week to discuss the deal with EU and US officials. Energy is expected to be a key topic at the meeting. Another round of talks is expected to be held in Washington, DC before summer.
Though it appears to be an ideal time to strike an EU/US trade deal, the
Times
noted that political differences have strained the relationship. In 2011, the US expressed concerns that European leaders’ use of austerity measures could be a threat to the global economy. Europe, meanwhile, has become disgruntled over US National Security Agency (NSA) spying, which included tapping German chancellor Angela Merkel’s mobile phone.
Additionally, many Europeans believe that an agreement with the US would jeopardise environmental and food safety standards, while US companies are concerned that investors would not be protected in the deal.