A crucial negotiating session will take place in Miami Florida from 19th to 23 October on the terms of a possible US/EU trade and investment pact.
An independent study by Copenhagen Economics has calculated that a Transatlantic Trade and Investment Pact (TTIP) would add 1.1% to Ireland’s GDP.
This is twice the rate of gain that would be experienced by the European Union as a whole.
I spoke recently at a seminar organised by the European Ideas Network (EIN) which is a thing tank associated with the parliamentary group of the European Peoples Party, the biggest party in the European Parliament.
I said that TTIP would be good for Europe because
+ It would reduce the cost of regulation by eliminating the necessity for duplicate standard setting and inspection regimes, the cost of which has to me met by the consumer without any compensating benefit.
+ The reductions in the cost of regulation would disproportionately help small and medium sized businesses to break into the transatlantic market. The present duplicative system acts as a barrier to entry and helps bigger well established companies keep markets to themselves
+ It would open the US Federal , State and local government market to European tenders, who are now discriminated against by “buy America” rules, which deliver poor value to US taxpayers
+ It would help high tech start up businesses on both sides of the Atlantic by creating a single market of almost 1 billion consumers
+ It would help to keep Britain in the EU, in order for it to access this market. A failure to conclude TTIP could, on the other hand, push the UK towards the exit, on the supposition that it might be able to negotiate better on its own.
+ It would give a confidence boost to the global economy at a time when the burden of debt precludes other forms of stimulus
There is, unfortunately, quite a bit of opposition, in Germany and Austria in particular, to the conclusion of TTIP. This seems to be linked to a general suspicion of globalisation and a perception that it adds to inequality.
Austrians are 53% to 35% against, Germans 41% to 39% and Luxembourgers 43% to 40% against. The rest of the EU is pretty overwhelmingly in favour with the biggest favourable votes in Ireland and Denmark, at 71%
On the far side of the Atlantic, trade is not a big concern of Americans.
Their big concerns, according the Pew Research Centre, remain international terrorism and building up their own economy.
69% of American under 28 believe trade deals are good, as against only 50% of over 65s.
Interestingly, 59% of Democrats favour concluding TTIP, whereas only 45% of Republican voters do so.
This is opposite to the traditional position in the US Congress, where Republican Congress members generally favoured freer trade, and Democrats often did not.
US public opinion will be less willing to accept European standards until the trust, damaged by the Volkswagen and LIBOR scandals, is repaired.
It is also important to recognise that differing standards sometimes reflect genuine differences in priorities among populations. For example, Europeans put a higher value on data privacy. Americans probably put a higher value on national security.
So the negotiations will be intensely political