Long gone are the days the American economy by itself producing
almost the 50% of the total world economic output immediately
following the Second World War. Gone, together with the
predominance in the global economic output is the cheap energy
prices that sustained the American economy and its new role back in
the post war world as the workshop of the world following the
British political and economic decline. The United States'
share of global economic output standing at around 30% in early
1980s steadily declined in to 20% at the turn of the millennia.
The story is not different for the European economies now
forming the largest single market in the world as members of the
European Union. 28 member union can only muster as much as the
United States' economic output despite the inclusion of new
member states during the last decade in to the union. By some
estimates, when combined EU-US
economic block only produces 37% of the world total economic
output. This represents a monumental shift in the world economy
where the focus has been shifting towards the Asia-Pacific region
and the countries like China are making their presence felt in the
TTIP As a Response to Global Economic Shift
Transatlantic Trade and Investment Partnership (TTIP) is
basically a Free Trade Agreement proposal between
the United States and the European Union. Given the ever increasing
competition in the world economy, such an initiative is a plausible
answer to the ongoing shift of global economic balances. The
conventional wisdom behind the free trade agreements lists
benefits like better market access, reduction of the inflation
rates and multilateral economic growth for the signatories. Even
though there were efforts on both sides of the Atlantic since the
early 1990s for a free trade agreement,
protectionism prevailed in a global economic environment where the
aforementioned shift has not yet taken place and the pressure for
such a close cooperation between these two economic powers were not
felt, at least not as intense as it is being felt today.
The agreement is expect to focus on the issues like removing the
obstacles for bilateral investments, enhancing the opportunities
for e-commerce, introducing market value compensation for the
corporations in cases of expropriation, free movement of business
managers and employees that fell short of a general right of free
movement and cross border subsidies. The agreement is expected not
only to further ease the trade between two important global
economic players but also generate millions of jobs that both
markets direly need. The agreement is also expected to provide an
additional advantage of reducing duplication rules and regulations.
Moreover the agreement will inevitably lead to a closer
collaboration between the American and the European companies
especially with regard to R&D to redefine these two economic
power blocks as pioneers in new technologies. The estimate provided
by Center for Economic Policy Research in 2013 includes an economic
growth prediction of around 100 billion Euros for each economic
Implications for the Legal Community
The proposed content of the agreement clearly demonstrates a
trend towards further harmonization of law between two economic
giants. The efforts to boost e-commerce and the proposed measures
to be taken to prevent duplicate rules and regulations point a need
for further compliance between the American law and the EU
Acquis with regard to the specific areas of law regulating the
economic activities that will be part of the agreement. Especially
problematic are the areas where, what the economists call the
negative externalities can occur such as the environment. European
Union has already set stringent standards for its environmental
policy. How such ambitious standards will be made to reconcile with
the American standards on environment are yet to be seen. The
compliance might also be problematic for the areas like food safety
and pharmaceuticals which are well regulated with high standards
attached by the European Union. For instance given the
EU's unwelcoming attitude vis-à-vis the
genetically modified foods, it remains to be seen how the
compliance will be attained in the business sectors related with
TTIP is a logical outcome of a world economy increasingly marked
by stiff competition and shifting of economic balances further to
the East; to the Asia-Pacific region. Even though the benefits are
there to be reaped in the form of higher economic growth, lower
rates of unemployment, a certain degree of free movement for the
business professionals and the reductions of duplicate regulations,
the challenges remain as well especially with regard to the sectors
that the two economic powers have not only diverging standards but
also different views.
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