EU-US trade deal claims ‘vastly overblown’
19 Nov 2013
The much-vaunted cash bonanza claims resulting from an EU-US free trade agreement are overblown and misleading, according independent analysis of key documents which make the case.
Political scientist Dr Gabriel Siles-Brügge from The University of Manchester says Prime Minister David Cameron is wrong to argue that billions of pounds will accrue from the negotiations between the two power blocks.
His co-investigator is Dr Ferdi De Ville from Ghent University in Belgium.
One of the documents, Reducing Transatlantic Barriers to Trade and Investment An Economic Assessment, claims an agreement could amount to €119 billion a year to the EU and €95 billion a year to the US.
That, it says, translates to an extra €545 in disposable income each year for a family of four in the EU, and €655 in the US.
“An impartial reading of these key documents relating to the Transatlantic Trade and Investment Partnership (TTIP) shows quite clearly that these huge figures are vastly overblown and deeply flawed,” said Dr Siles-Brügge.
“It’s an overly optimistic view coloured by the political imperatives of the likes of the European Commission and certain member state governments.
“David Cameron has latched on to the figures to convince Eurosceptic voters in the UK that membership will create jobs and prosperity. This is misplaced as a disappointing outcome might fuel further Euroscepticism.”
According to Dr Siles-Brügge, there is little chance that key sectors essential for TTIP to work will be able to standardise their markets – the underlying aim of the negotiations.
The EU will not, for example, change its policy on genetically modified organisms and alignment of safety and emissions standards in the car and chemical industries faces very steep obstacles he argues.
Nonetheless, he says, EU calculations assume that almost all sectors will be standardised.
But because the sum of the gains of each sector is actually greater than the parts, the absence of key sectors from the agreement will have a disproportionate impact on their sums.
TTIP talks resumed this week, and a further round of negotiations is scheduled for 16-20 December in Washington.
He added: “Previous attempts to standardise markets have come to very little, so there’s no reason to expect anything different this time –especially within the stated time frame of two years.
“All this rhetoric means that Governments continues to place emphasis on liberalisation of the economy.
“Indeed, you could reasonably argue that similar free-market policies in the financial sector are partly to blame for the economic crisis in the first place- so an entirely different approach of ambitious social and ecologically sustainable policies is required – not more of the same.
Notes for editors
The two impact assessments which Dr Siles-Brügge and Dr Ferdi De Ville study are:
• ECORYS 2009 study: http://trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145613.pdf called Non-Tariff Measures in EU-US Trade and Investment – An Economic Analysis
• CEPR 2013 (where the Commission gets the 545€ headline figure from): http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf Reducing Transatlantic Barriers to Trade and Investment An Economic Assessment
Dr Siles-Brügge is available for comment
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Faculty of Humanities
The University of Manchester
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