The mention of the Transatlantic Trade and Investment Partnership served as stamp of approval to prominent EU leaders such as German Chancellor Angela Merkel and British Prime Minister David Cameron who have been waiting for a sign of clear commitment from the US. Now that America is seemingly on board, it is predicted that trade could “generate economic growth of up to 1.5 percent on both sides of the Atlantic” (Spiegel). It could also be considered a politically smart move for Obama to reassure EU governments that the US is not turning away from the EU to pledge its allegiance to Asia.
But the promise of trade talks is not nearly enough to ensure the actions of the agreement. Even with the launch of talks, the two nations will need to overcome cultural and ethical differences regarding standards on genetically modified produce and production methods. Another barrier involves the US Congress approving the whole plan. The biggest hurdle could come from conservative lawmakers that “have little faith in European unity” and their eagerness to promote free trade. There is also the belief that the Transatlantic trade agreement is merely a “defense against the new economic superpower of China and an attempt to cement ‘Western values’" (Spiegel). In addition, the trade agreements have gained significant criticism with outcries from human rights activists. The claims are that the new deal will "impede access to medicines and degrade labor standards" (Huffington Post).
Taking in both the pros and cons of this transatlantic free-trade zone, it is still too early to foresee the impacts resulting from such a trade agreement. However, the promise of new export markets for American goods could pave the way for "limitless fruits of success".
This would be a fantastic out come for both sides should this get pushed through. It has to be ratified within two years though, which might be difficult to accomplish, because this trade arrangement is extremely complex!
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Is there any talk about which markets will be opened up to free trade? It doesnt seem like the EU would open up their agricultural sector, most likely due to our use of GMOs.
ReplyDeleteThe two-year self-imposed deadline for the trade agreement is problematic for a number of reasons. For one, the proposed trade agreement is extremely complex and it will take a significant amount of time to iron out all the fine print. Additionally, the two year deadline falls right around the next midterm elections for the United States. President Obama is already facing a hostile Congress and elections will up the pressure for many senators facing reelection. Congressmen are more sensitive to special interests groups (including the ones that will be hurt by this new trade agreement) because they are responsible to a small constituency. The odds are hardly stacked in President Obama's favor.
ReplyDeleteThe two-year self-imposed deadline for the trade agreement is problematic for a number of reasons. For one, the proposed trade agreement is extremely complex and it will take a significant amount of time to iron out all the fine print. Additionally, the two year deadline falls right around the next midterm elections for the United States. President Obama is already facing a hostile Congress and elections will up the pressure for many senators facing reelection. Congressmen are more sensitive to special interests groups (including the ones that will be hurt by this new trade agreement) because they are responsible to a small constituency. The odds are hardly stacked in President Obama's favor.
ReplyDeleteI think this trade agreement will be a good for both US and European economies for a couple reasons. First being that there is not as much need to worry about lose of American jobs to a lower wage economy because both Europe and the US are high-wage economies. Secondly, because creating such a large relationship with one of the largest trading markets will lead to more cooperation and less conflicts in the future. Though this agreement will not be easy coming with having to achieve agreement on regulations and standards, I think politicians on both sides realize the importance of creating a trade agreement between the US and EU which together produce half of the global economic output.
ReplyDeleteIt is interesting to see things like this discussed at STOTU addresses which are usually so shadowed by discussions of social issues and domestic problems. Nonetheless, i think this trade agreement will prove to be beneficial to both US and EU economies. I do believe that the US needs to step up its quality of goods to want the EU to import more of our goods. As an American we value things made in Europe whether thats Italian Fashion, German Automobiles and engineering, or even things like cheese and wine. America needs to produce things that can eventually become goods that are valued throughout their culture.
ReplyDeleteOnce again, here we have a case of intentional vagueness by our President. Free trade by nature boosts exports by allowing one country specialize in the factor in which it has comparative advantage, but how specifically would the US economy gain by a free trade agreement with the EU? Which products will we begin to produce for export that we do not already produce? Furthermore, how would this affect our (and their) agricultural sector?
ReplyDeleteI fail to see how this will "support American jobs." Is he referring to the creation of new jobs? As we discussed in class last week, specializing in a specific sector after opening free trade involves transferring capital and labor into the new sector. In the long term this will work, but in the short term workers will suffer from unemployment. This is the last thing our country needs right now.
I wonder if working on larger FTAs like this will allow for the industrialized countries to come closer in any way to reaching an agreement on some of the terms of the Doha Round. A large thorn in the side of compromise has been crops. Perhaps working out a transatlantic trade agreement will allow for some more constructive compromises to be made that can be carried forward. This would do a lot to ease cooperation and bypass coordination problems. I am interested to see where this will go.
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