Global Supply Chains and the Transatlantic Trade and Investment Partnership

The short and medium term effects of the successful implementation of a significant set of agreements following the TTIP negotiations have focused on magnitude and sectorial impacts of increased trade in goods and services.  What has been given much less attention is the medium and long term potential for structural changes in cross-border capital investment.  As trade and investment barriers are diminished there stands the potential to re-evaluate manufacturing and service production locations and supply-chain networks.  On a smaller scale we have witnessed the results of these adjustment processes to fundamental structural changes in the EU’s internal market project, membership expansion, and the common currency developments of the past quarter century. 

The paper will outline the potential future direction and magnitude of investment decisions brought about by implementation of the new TTIP.  A key element of contemporary locational-based capital investment decisions is cross-jurisdictional public competition policies whereby municipal, state, and national entities offer alternative sets of tax and investment packages to attract sizable capital investment projects.  The analysis will focus on models and empirical evidence of the success and limitations of such jurisdictional competition and the nature and effects of limits on governmental subsidies.  Particular attention will be paid to the nature and practice of state-aid rules within the European Union (EU).