Sample Term Paper on Transatlantic Trade and Investment Partnership


The Transatlantic Trade and Investment Partnership (TTIP) entails a widespread agreement involving the European Union and the United States aimed at elimination of trade regulations, tariffs and nontariff barriers, for instance, supervisory measures between the two trading blocs. However, the bargain is still under negotiation. Given the fact that there are low mutual tariffs between the two trading blocs, the main aim of TTIP is to match the principles that are similar in objectivity as well as the level of protection to ensure that both the United States and the European Union attain economic development. These strategies are aimed at decreasing gratuitous expenditures for both EU and US organizations, thus enhancing accelerated economic activities between the two trading blocs. The TTIP negotiation in the US and EU has attracted politicians and other pundits’views in the two sides of the Atlantic regarding the issues of the transatlantic relationship, which is seen as the answer to the current EU economic troubles. This partnership is also considered an opportunity for creating an institution that will revive the Western alliance. Nonetheless, the negotiations will continue to upholduntil a point whena final inference will beattained. This paper presents a discussion on the main goal of TTIP in addressing the regulatory barrier and what it is doing at the moment in terms of business and politically.

History of Transatlantic Trade and Investment Partnership

There has beena historic and elaborateeconomic integration relationship between the European Union and the United States globally (Erixon 5). As a result, between 2011 and 2013,the two trading blocs established a High-Level Working Group on Jobs and Growth (HLWG)that was pioneered by the EU Trade Commissioner and the US Trade Representative.This process was aimed at establishing severalstrategies that were meant for enhancing employment creation, economic development, worldwide competitiveness and the growth of high global standards in numerous areas. The initiative received tremendous support from different stakeholders.With regards to thisexploration in February 2013, the HLWG suggested to the U.S. and EU leaders the launch of negotiations that were guided by their respective domestic procedures: an inclusive, aspiring agreement aimed at addressing a wide range of bilateral trade and investment issues. These included regulatory issues and other factors that will enhance development of effective trading mechanisms for the EU and the US.

Following this development, the member States in June 2013 gave permission to the European Commission to initiateconsultations with the United States. This was aimed atagreeingon the clear strategies for the European Commission. Specifically, the EU member States mandated the European Commission to ensure an equal resultamid the eradication of duties, the abolition of redundant regulatory impediments to trade, and enhancementofguidelines. This would result inasignificant outcome in each of the elements andenhance opening of each member states markets.Therefore, adetermined TTIP would be effective in eradicating tariffs worth 3.6 billion Euros. Furthermore, TTIP impact would also result in a bigger economic bearingattained throughremovingseveral inspectionsin the regulation field among the member states.

Despite the fact that TTIP negotiations are still going on, it is apparent that the final treaty will incorporate three main parts. The first part of the agreement will aim at enhancingmutual market access and touching aspects like public procurement and levies duties. Additionally, the second part of the agreement entailssupervisory cooperation, which is intended for decreasing costs by harmonizingguidelines and restrictions in specific areas like food safety. This agreement will also strive to establish institutions that will enhancecollaboration between EU and US controllers when creating and revisingguidelines. The third phase of the agreement aims at establishingnew provisions that will enhance trade and investment considering global issues, such asenergy, sustainable growth, quarrelclearancerequirements, and intellectual property.

The agreement has faced several oppositions. Antagonists of this agreement argue that theharmonization of regulations in the two trading blocs will decreaseconservational, labor, food and other public aspects standards, which have seen the administration of the partner nations come about to clear the fears. Moreover, other antagonists argue thatthe negotiations are undemocratic because specific national governments, particularly in Europe, have not been directly involved in the process, which means that they will either accept or reject the TTIP wholly after the negotiations have been concluded. In addressing this criticism, the Commission was forced to publish the negotiating copies online. Specifically, the main controversial issue in Europe was the investor-state dispute settlement (ISDS). This entails the tool to guard investors counter tolawmaking that damages their earnings by allowing global corporations asubstantialcontrol over public policy.

What Transatlantic Trade and Investment Partnership is Currently Doing

Business Regulatory Implications

One of the major issues that are highly regarded by many stakeholders in the TTIP is the concept of regulation, which is core in either making or breaking the treaty. In this category, the key sectors of interest in the agreement between the EU and the US include automobiles, substances, maquillages, information communication technologies, medical equipment, and pharmaceuticals among others (Akhtar 7). Therefore, the agreement is aimed at achieving economic gains that will emanate from the regulatory unity. Simultaneously, there is a general deliberation on whether the TTIP needs to completely agree on regulatory issues that can be reached. Firstly, the United States and EU have maintained a constant communication regarding several regulatory variances. Despite the fact that some have been resolved through the agreements, other regulatory issues persist. Moreover, through the TTIP negotiations, the US and the UK have experienced some differences in the regulation concept, which is as a result ofopposing public preferences and values. For instance, several European consumers fancy naturally produced foods as compared to American consumers who like products developed by alternative forms of agricultural production, for instance, genetically produced foods. The other concept that is apparent from the negotiations is that the US and EU regulatory methodologies to risk management have been different. For instance, while EU regulators favor a more preventativetactic, the US business segmentsfear that it can lead toa more severe risk regulation, which can negatively impact the small and medium-sized businesses. Therefore, to enhance a greater accord in regulations for specific sectors in the agreement, the negotiations have seen the establishment of possible ways in the regulatory arena including mutual recognition agreements (MRAs). These have madeofficials from the UK and US to accept products or services from each side grounded on tested once principle.

The TTIP negotiations are setting the stage that will see an enhanced market access by the member-statesstakeholders. For instance, the EU’smain objective is to guaranteeaspiring and well-adjustedresultsin the three main regulations, which are tariffs, services, and public procurement. This implies that trade in goods comprising tariffs will enable both the US and EU to establish effective proposals as provisionsin the trade between the blocs, for instance, in agriculture and other related non-tariff concerns. These matters are in the process of beingamalgamated in the TTIP agreement.

A regulatory cooperation is being witnessed between the US and the EU as a result of the TTIP agreement process. For example, the EU main aim in the agreement is creating acontext for improvedcollaboration between regulators from all the regions in a manner that will eradicate barriers to global trade and offerexplicitresults on fundamental industrial sectors. For example, this process will help in decreasing duplication of scrutiny of pharmaceutical producersby the EU and US regulators, thus saving time as well as resources for more sophisticated aspects. In the automobile sector, the agreement is harmonizing safety regulations among the manufacturing organizations, which is enabling the firms to meet the required market needs of consumers in both markets as steered by both the EU and US regulators. Additionally, the guiding principle that is being beheld in the agreement is that the TTIP agreementshould not decrease the prevailingprinciples of protection, which needs to remain the same or be improved.

One of the outcomes of TTIP that is apparent is the horizontal regulatory coherence, which is a product of the initial suggestion made in 2015.In this regulation,as at February 2016,the EU offered a reviewedapplication on regulatory cooperation as well as asuggestion on effectivemonitoring practices. On the other hand, the US has also projected written proposals in several areas as anticipated by the EU. In the TTIP agreement, technical barriers to trade (TBT) include issues, such asproduct conformity valuation, decrease of the associated costs and cooperation in standard settingthat are being negotiated. The amalgamation of the documentedsuggestions by both the UK and the US on the issues is ongoing and the differences are being explored.

Additionally, the TTIP negotiation on the sanitary and phyto-sanitary (SPS) sectionaddresses the issue of food safety, animal and plant health and the best mechanism of trade that will be conducted while upholding all the partners’protection. Under this section, the United States and the European Union have been able to interchange documentedproposalsthat are still underdeliberation. The TTIP agreement of sectoral cooperation has also enhanced discussions regarding significantsegments from both the EU and the US, which have remained highly mechanical and compound. Until now, the main aim of the deliberations on sectoral cooperation has been enacted to come up with ways of attainingbetter regulatory compatibility among the crucial sectors of the economy.

In the trade rules, the TTIP negotiations have also seen the EU augment its main purpose ofpositively contributing to the advancement of global trade rules globally. The negotiations have also seen thesmall and medium-sized enterprises (SMEs) being incorporated in the agreement. For instance, during the negotiationthat took place in March 2014 in Brussels, both the EU and US decided to incorporate a specific chapter in the T-TIPthat precisely focused on SMEs though creating strategies that will help them as small entrepreneurs to benefit from TTIP. This chapter is significant, particularly to the EU as it will be the first and sole SME chapter in the region (Trade 11). The negotiations have also seen tremendous progress approaching an agreement in the SMEs sectorwith only fewoutstandingconcerns.

In October 2015, there was a proposal by the EU in the TTIP agreement that entailed sustainable development. These incorporated essential requirements on labor and environmental protection that are significant in trade and investment.For example, the EU suggestion are far beyond any provisions in the prevailing EU trade agreements. The United States also made similar sector submissions in February 2016 concerninglabor and environment. The deliberation of the matters will see a common understanding on the regulation as provided in the chapter that will ensure effective and positive mechanism to benefit both the nations involved.

Political Implications of TTIP

The main essence of the U.S. government’s style to negations is built on the Congress holding that the United States is not ready for such an agreement. Therefore, several political impediments are built around the TTIP negotiations, which are challenging. On the European Union side, the 2014 elections of the European Parliament resulted in more representatives of parties who are doubtful about the integration process and possible formation of a functional TTIP (Bledowski). Moreover, national politics in numerous member nations, for instance, France, Netherlands and the recent Brexit,have also slowed down the whole process of TTIPagreement. Several other challenges emanate from pressures exerted by vocal subgroups’political voices in the nations, which weaken the internal unitywithin the European Union thus lowering the overall determination of the TTIP.

In the United States, severe pressure from vocal states regarding special interests also affects thestate’sdetermination in the formation of the TTIP. For example, the forthcoming November 2016 presidential election may have a huge impact on thedrive for concluding the TTIP negotiations and agreement.Furthermore, another political element in addressing the TTIP currently taking shape is the deep- rooted GMO plants and seeds subject that runs deep in Europe (De Gucht 2).For example, local European politics are imparted with apassionatenegation to consentthe concept of GMOs. This implies that evidence and science cannot be enough to overcome public holdings about GMO supposeddetriment. On the other hand, the United States has insisted on eliminating financial oversight from the treaty. This can take a different interpretation from the Congress and since it has the decisive authority to controltrade with foreign states, the matter affects the TTIP negotiations politically.

Tariffs on goods are more expensive when being imported into the European Union as compared to the United States. Furthermore, exceedingly higher tariffs are imposed on comparableclassifications of products when traded infabrics, clothing, fish, sweet meat and dairy products. Nonetheless, the United States administration is being genuineon decreasing tariffs on several products. Despite the fact that the transition periods may take different time frames for the commodities, the nation is determined to attain the objective. Additionally, it is apparent that tariffs on imports from the EU have been low in the U.S. trading partner with the trend decreasing over time. One of the biggest challenges of high tariffs on products such as sugar that is being imported to the US is the protection they receive from the Congress. With such commodities, it becomes challenging for the TTIP negotiation procedures due to the political processes and affluence involved.

In terms of services,sales of services contribute to approximately 70% of productivity and exports, whichcomprisean increasing share of nationally produced volume of services for both the US and the EU. Moreover, the EU represents the leading destination for American services. It is obvious that trade in services is a likelyaccompaniment to trade in goods. With the increasing trend of specialization and global supply chains taking shape between the two partners, other elements like engineering, transportation, and finance among others are also enhanced between the EU and the US. As a result of thehuge stocks of foreign direct investment in both the US and the EU, there is a likelihood of intra-company trade in goods and services. Nonetheless, some members of the Congress have been in support of the idea of including financial services in TTIP while others oppose to the idea. Those supporting the exclusion of the financial services argue that the international nature of the agreement necessitates international regulatory standards. On the other hand, the EU has maintained its support for the inclusion of financial services in the agreement. This has also provided another political influence challenge to the TTIP negotiation agreement.


The TTIP represents an agreement that is aimed at enhancing economic freedom that will have considerable economic benefits to the United States and the European Union. However, negotiating a wide-ranging TTIP that will attain the intended objective is challenging. Significant steps have been attained so far. Despite the fact that even the high-quality TTIP is not the solution to the falling economies of the EU, the agreement needs to be part of the TTIP majorUS strategy to encourage free trade and economic freedom among the trading partners. The discussion has clearly indicated that the main objective of TTIP is harmonization of the trading regulation between the EU and the US and has discussed what it is currently doing in terms of business and political involvement.With all the considerations, it is apparent that TTIPmerits can only be evaluatedeffectively when the agreement is determined. The partnershipcan attain its main objective by enhancingeconomic freedom through decreasing several governmental regulations and barriers to trade and finance without creating detrimentalmultinationalorganizations.This is because the two trading blocs also need to benefit from agreements aimedat stimulating economic freedom. At the moment, the high level of engagement will remainat the business and political levels.


Works Cited

Akhtar, Shayerah Ilias, and Vivian C. Jones. “Proposed transatlantic trade and investment partnership (TTIP): In brief.” Current Politics and Economics of Europe 24.1 (2013): 107-122.

Bledowski, Kris. Expectations for the Transatlantic Trade and Investment Partnership. (2014). Accessed on 25 October 2016.

De Gucht, Karel. “The Transatlantic Trade and Investment Partnership: Where do we stand on the hottest topics in the current debate.” European Commission, SPEECH/14/52.

Erixon, Frederik, and Matthias Bauer. “A transatlantic zero agreement: Estimating the gains from transatlantic free trade in goods.” ECIPE occasional Paper 4 (2010): 2010.

Trade, Investment. “Industrial Policies in India: Effects on the US Economy: Investigation No. 332-543.” (2014).