For the last few years the U.S. and Europe have been developing a free trade agreement called the Transatlantic Trade and Investment Partnership Agreement. The goal of the T-TIP is to eliminate tariffs and other barriers to trade. The overview of the agreement through the link provides information on the U.S.'s objectives and benefits. It states that the U.S. exports $730 million in goods to the EU daily. Without trade restrictions prices would drop and demand would rise. In the end the U.S. will export more goods each year, rising the total terms of trade. There are people who still oppose the T-TIP agreement for environmental and labor reasons.
Environmentalists are concerned about corporations involved with the agreement will not need to adhere to high environmental standards already in place. Corporate profits would benefit by not needing to maintain standards. However, the WTO says a country has the right to refuse products from a country that doesn't meet a certain environmental law if and only if those same laws are implemented domestically. This means neither the U.S. or the EU needs to accept all products offered as exports.
Another concern is labor standards weakening as a result of increased competition. Though, the textbook states that U.S. trade laws give the president the right to refuse trade from a country that lack proper labor standards. That places a large responsibility on the president to be aware of labor standards around the world and to take intiative against a country when necessary. This shouldn't be a large issue working with the EU considering they have similar labor standards as the U.S.
Overall, the T-TIP is going to benefit the U.S. and the EU greatly. The agreement shouldn't take away from trade from other countries, but only increase existing trade between the U.S. and the EU. They want the agreement to set standards for future agreements with other areas around the world. Hopefully it will open more doors for other free trade agreements, but when working with developing countries questions of environmental and labor standards will be more difficult to address.
I do not think that there are too many downsides to this agreement for both the U.S. and the EU. For the environment, the article states that the U.S. is known for our leading role in the protection and enforcement of environmental laws in trade agreements. We have already eliminated many barriers involved in the trade of clean energy. If this agreement were to have effects on the environment, they would mainly be positive. For example, with the removal of trade restrictions comes a decrease in prices as mentioned in your post. This price decrease will force corporations to produce more efficiently with their limited resources in order to maintain and raise their profits. This will indirectly help the environment, as producers will want to cut their waste by manufacturing their products with the least amount of materials necessary. In the end, I believe the TTIP will become a prime example of free trade agreements that many nations will soon follow.
ReplyDeleteI agree with you about the T-TIP will benefit US and EU overall, but I think it might somehow take away the profit of US or EU's original trading partners. Because if US or EU can offer each other the same good as other countries at a lower price or higher quality, then US or EU will choose to trade with each other. This might lead to a fall in the amount of US or EU's trade toward other countries.
ReplyDeleteThis trading agreement sounds like a good idea for both parties involved. Both parties will experience an increase in their terms of trade, as they will see their price of imports decrease from one another. I feel like there is potential danger with an agreement that doesn't include other countries that trade with Europe and the United States. It would be interesting to see how China feels about the EU and the United States receiving breaks from tariffs while they are still paying them. It is an interesting dynamic that could have a very positive effect, however there are some underlying issues that have the potential to cause problems.
ReplyDeleteT-TIP is truly an effective agreement in favor of trade between the U.S. and the EU. It eliminates tariffs and non-tariff barriers to encourage the trade. For people who oppose the T-TIP because of environmental and labor reasons, it is hard because the standards about those aspects are quite the same in the U.S. and the EU. The rules that WTO made will help developed countries to refuse products from developing countries only. Therefore, developing countries will try to improve their environmental and labor standards. However, those standards also go along with the national economies. If countries have good economies, they can afford for better environmental and labor standards.
ReplyDelete