The Costs and Benefits of the Transatlantic Trade and Investment Partnership

The Transatlantic Trade and Investment Partnership (TTIP) has been under negotiation since July 2013 with claims in the EU of substantial potential economic benefits. These will come it is claimed, from reducing non-tariff barriers, largely meaning differences in regulatory systems and outcomes. This paper assesses the likely impact of TTIP starting with a critical assessment of expert studies prepared for the European Commission and some EU member governments. For various reasons, there has been strong political pressure to play up the predicted benefits. However, this paper concludes that likely benefits have been overstated. In practice it will be very difficult to achieve a substantial increase in compatibility of regulatory systems and benefits from reducing non-tariff barriers are therefore likely to be small. The effects of many barriers have been overstated partly because of difficulties in their quantification and partly because the EU and US economies are already closely integrated through the activities of multinational companies, reducing the potential for greater trade in goods. The likely impact of TTIP is assessed against the progress of negotiations and the inputs from outside actors in Europe, including business interests and civil society.