T-TIP: Transatlantic Trade and Investment Partnership agreement

President Obama's trip to Europe this week, and the news reporting on it, will undoubtedly be dominated by the Crimean Crisis and security issues. Also, there will be a nuclear summit ad meetings with Asia and Middle Eastern leaders.

One issue that is likely to get back-burned is the ongoing negotiations over the  Transatlantic Trade and Investment Partnership (T-TIP) agreement. This agreement seeks to not only reduce tariffs between the US and EU, but also to reduce regulatory barriers to trade between the US and EU.

From the European point of view, "What the European Union wants to do with TTIP is to find common-sense ways to make regulations set by the EU and the United States more compatible, while keeping
people protected." The EC thinks this can be done in the following ways:

Existing regulation can be tackled in different ways:

• One idea would be to formally recognise that some regulations have broadly the same effect. This would mean that companies, under certain conditions, could simply comply with  one set of rules in order to sell in both markets. 
• Another idea would be for both sides to move their regulation closer to internationally agreed ways of solving the problem at hand. 
• A third way to work, where EU and US regulations are very different, would be for regulators to cooperate more on how they put the regulation into practice.

From the US point of view (with regard to regulations), "We seek to eliminate or reduce non-tariff barriers that decrease opportunities for U.S. exports, provide a competitive advantage to products of the EU, or otherwise distort trade, such as unwarranted sanitary and phytosanitary (SPS) restrictions that are not based on science, unjustified technical barriers to trade (TBT), and other “behind-the-border” barriers, including the restrictive administration of tariff-rate quotas and permit and licensing barriers, which impose unnecessary costs and limit competitive opportunities for U.S. exports."

In general, the EU view leans towards regulations as a means of protecting the safety of its citizens while the US leans towards seeing regulations as a means of protecting domestic industries. It will be interesting to see how (or if) the EU and US reconcile their contrasting views.

It is also interesting to note what the EC thinks is in it for Europeans:

The aim is to increase trade and investment between the EU and the US by unleashing the untapped potential of a truly transatlantic market place. The agreement is expected to create jobs and growth by delivering better access to the US market, achieving greater regulatory compatibility between the EU and the US, and paving the way for setting global standards. If such an ambitious agreement were achieved, it is expected that every year an average European household would gain an extra €545 and our economy would be boosted by 0.5% to up to 1% of GDP, or €119 billion annually, once fully implemented.

Note that the result of an "ambitious agreement" is expected to be a 1/2-1% increase in GDP. Nothing to sneeze at, but not a huge increase in well-being.