From USA-ITA OFF THE CUFF for September 27, 2013
On September 24th, the Atlantic Council, in partnership with the Bertelsmann Foundation and the British Embassy in Washington, released a study showing that the Transatlantic Trade & Investment Partnership (TTIP) would lead to jobs and economic growth in all 50 U.S. states. During the study’s launch event in Washington, D.C., UK Deputy Prime Minister Nick Clegg, along with bipartisan U.S. Senators, called for the liberalization of trade between the United States and European Union—because as the study shows, it’s clear that everyone wins.
We’re only on round two of the TTIP negotiations (which begin October 7th in Brussels) but we already have evidence that an ambitious agreement would significantly benefit the citizens and economies of both the United States and European Union. According to the study authors, “The EU-US relationship already supports a combined 13 million jobs and nearly $3.9 trillion in investment, and represents 45 percent of the global GDP.” TTIP, however, presents an opportunity to increase jobs, investment, and GDP for both partners.
Annette Heuser, Executive Director of the Bertelsmann Foundation, kicked off the event by reviewing the study’s methodology—and impressive findings. To conduct the study, the authors assumed an ambitious scenario, including the elimination of all tariffs, a 25 percent reduction in non-tariff barriers, and a 50 percent reduction in procurement costs. Under this scenario, Heuser explained, U.S. exports to the European Union would increase 33 percent per state and lead to net employment gain of over 740,000 jobs across all sectors. While all states would benefit, California, Texas, New York, Florida, and Pennsylvania would see the largest jobs gain, along with states with significant services, motor vehicles, and chemicals sectors. And, perhaps of most interest is that the study shows that TTIP will add about $865 in the pockets of each American family per year. The full study is available online at www.atlanticcouncil.org/publications/ttip-and-the-fifty-states-job-growth-from-coast-to-coast.
Ambassador Stuart Eizenstat introduced the honored guests and added that with subpar growth in the United States and almost no growth in Europe period, TTIP provides an opportunity for a “deficit-free stimulus.” In fact, if an ambitious TTIP goes into effect, we can expect to see GDP growth of nearly 1 percent in both the United States and Europe.
UK Deputy Prime Minister Nick Clegg, arriving a few minutes late from a meeting with U.S. Vice President Joe Biden, praised the TTIP negotiations and said that we have an “economic necessity to capture the huge potential of trade liberalization” that we would see from such an agreement. The United States and European Union already cover about 1/3 of global trade, he said, but we need to go further. Noting that Biden reminded him that “all politics is local,” as is surely the case in the UK’s parliamentary system, Clegg said this study is so critical because it “enables us to make the case locally for TTIP,” as every state is able to clearly see the benefits.
UK Deputy Prime Minister Nick Clegg at the Atlantic Council (Credit: USA-ITA)
TTIP has broad support across all parties in the UK, and also bipartisan support in the United States, explained U.S. Senator Chris Murphy (D-CT) and U.S. Senator Ron Johnson (R-WI), the leaders of the Senate Foreign Affairs Subcommittee on European Affairs. Murphy, the Committee Chair, called TTIP “transformational” for the economy given its economic and geopolitical benefits, and said that he and Senator Johnson are united in their support for it. Johnson, the Committee Ranking Member, added that the study is important because it shows that while there may be some winners and some losers in specific sectors, overall society wins.
When asked about the prospects for TTIP in the U.S. Senate, Murphy said that he thinks there will be greater agreement on the Democratic side for TTIP than there has been for previous trade agreements, though he added that “there is a reason it has not been done yet.” Nonetheless, the divide on TTIP will be by region not party, which is again why this study is so important. Murphy also noted the importance of Trade Promotion Authority (TPA) to concluding TTIP or any other trade deal.
And, it’s not just the United States and European Union that will benefit from an ambitious TTIP, but the entire world. As Johnson said at the conclusion of the event, “Developed countries need to set the example and lift up all economies” by enacting ambitious free trade agreements. “It’s the moral thing to do.”