Business Brief Case Study

The Transatlantic Trade and Investment Partnership (TTIP) is currently a free trade consensus negotiation involving the United States of America and the European Union. The two signatories account for the one-third of the global trade flows and half of the world’s gross domestic product. Notably, an ambitious and fruitful TTIP can improve and boost the economy of the involved countries. The member states of the European Union are the world richest and largest trading partnerships, and as such, this initiative presents substantial gains to the union.

The Benefits of the TTIP

The TTIP provides a widespread acceptance for the international trade between the U.S. and the European Union. In this regard, getting involved in the agreement creates time and space for business development. Since a deal aims at making profits, the countries involved stand a favorable opportunity to improve their economies. Notably, the two parties have records of a sluggish growth since the onset of financial crises in 2008 (Benka, 2014). Even though the two enjoy relatively low tariffs between them, incorporating non-tariff barriers will be a remarkable milestone. Such coordination would help them agree on the best mechanism for removing the unnecessary red tape in these areas.

On the other hand, the agreement presents tremendous potential if it incorporates compatibility and coordination between its signatories. Most of the standards in the U.S. are compatible to those of the European Union even though they are not mutually acceptable (Benka, 2014). To this effect, there are massive costs associated with trade across their boundaries. For example, most products have to pass through safety tests twice during the certification process. For this reason, TTIP presents a favorable ground for saving costs of trade between the two regions.

Boasting extensive services exports records in the world, the U.S. and the European Union have the opportunity to grow their employment statistics. Such service jobs include express delivery firms, which could combine forces with the EU shipping business to spur economic growth in the region. Similarly, telecommunication service providers in America could join hands with EU’s online consumers to take advantage of lowered tariffs. These and other initiatives provide real-time and efficient transfer of services across the Atlantic.

The U.S. and the EU have led the campaign for environmental protection and the implementation of environmental laws. In this regard, the agreement does not compromise the regions’ commitment to environmental protection as an initiative for a good trading platform. As a result, TTIP eliminates the barriers to trade by including cutting-edge environmental technologies. Besides fighting harmful fisheries, the agreement could foster efforts to adopt clean energy and protect wildlife as well as endangered species (Benka, 2014). By including this aspect in the TTIP, the partners become a model for emulation by others, which may enhance even better transatlantic cooperation.

Potential Drawbacks of the TTIP

Despite the numerous advantages presented by the TTIP, there are also a few disadvantages arising from the same. The potentiality of the agreement to create employment is limited in some sectors, such as in the production of machinery. According to the Government of the Netherlands (n.d), TTIP has an adverse impact on the social model of the Europeans. On the other hand, there are fears that it could result in lower standards in areas of food, privacy, the environment, and labor conditions. To this effect, the EU demands that the concession maintains high social welfare standards as well as protection of privacy.

On the other hand, there are concerns that governments will have little influence on what companies set to do. The civil society believes that the investment protection provided in the agreement affords firms too much authority. In this view, it curtails the governments’ ability to make laws and regulations. However, the EU union has pushed for the inclusion of a chapter that could reverse the seemingly negative gains provided for companies. In this proposition, rules should be clear about the conflicts between governments and investors. As a matter of fact, the aim of TTIP is to improve the traditional system of investment protection

Why the TTIP is not Opposed

North American Free Trade Agreement between Canada and Mexico received a widespread rejection from several parties including some politicians and organized labor due to several reasons. One of the reasons for such uproar was the perception that it would lead to exacerbated environmental destruction. According to Global Exchange (2011), the model arose from the policies of IMF and World Bank, and it has resulted in the destruction of ecosystems in many parts of the world. However, TTIP involves two regions have environmental concerns at the forefront. EU and the U.S. have put up a spirited fight for environmental conservation for a long time, a fact that could have elicited acceptance from almost all observers.

All in all, the benefits of the TTIP transcend diverse social, economic, and environmental areas. Besides enabling free trade through reduced non-trade barriers, it encourages compatible measurement and safety standards for their products. Additionally, the agreement promotes the services industry as well as the environmental protection initiatives. Notably, it involves two regions that value environmental safety in the long run, hence the widespread acceptance. However, the EU fears a loss of employment resulting from the agreement.

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