2016 will most likely see the Transatlantic Trade and Investments Partnership (TTIP) come into play, should it pass through both the US Congress and the European Commission. Since the new trade deal between the EU and USA was originally tabled, it has met fierce criticism from some on the Political Left, who believe it will give too much power and control to corporations at the expense of individual governments and democracy.
The bottom-line idea behind TTIP is to increase profits for both American and European companies; therefore, aiding growth all round. It has been suggested by the UK Government that TTIP could increase national income by £4-10 billion each year, or £100 billion over a ten-year period. Most importantly for current governments is the fact they will be able to boast about any income increase and growth come election time. The general public do like to know that the economy is doing well prior to an election, even when this does not represent long term stability.
So, how will this deal actually increase income and growth both at home and abroad? Essentially, one of the major properties is lowering the import tariffs between the EU and US. Supporters claim this will give greater consumer choice as American companies will be in a better position to offer merchandise at a similar price to their European counterparts. It will of course increase the bottom-line profit for companies already dealing across the Atlantic as import costs decrease. It will also give the opportunity for more companies to trade across the sea due to the lower costs.
As stated above though, this deal is not being met with widespread happiness for a number of reasons. With wider consumer choice, individuals do not always receive better deals. Instead, the marketplace can become saturated with substandard products. Moreover, our current government has a habit of privatising various national institutions both in public (Royal Mail) and quietly (Local Government). The railways in our country are already overpriced and under maintained, with TTIP opening the door to American corporations bidding for the next contracts in pursuit of profit. The Left also fear that the NHS would fall into American investors hands.
Even more worrying, is that with the deal comes Investor State Dispute Resolution (ISDS). This undemocratic term in its current form will essentially give corporations the opportunity to sue governments should they introduce legislation which may harm the profitability of said business. The Australian government faced legal action in recent years when introducing plain packaging for all cigarettes across the country. Theoretically, should the current or future government decide to try and do something about the increasing diabetes epidemic and write a form of sugar tax into legislation, then a worldwide soda company, as long as they have employees in the UK, could sue the country for loss of business. Simply put this removes the power of the state and places it in the hands of the largest corporations and their lobbyists.
There is a variety of further concerns regarding TTIP, such as the fact small businesses maybe forced to close when priced out of competition by larger companies who find themselves with increased margins. The UK Government has recently blocked a Freedom of Information request for copies of the legal advice they have received on ISDS, which suggests it may not have made pretty reading. There is hope in the fact that the deal has been pushed through by the Obama Administration. Whilst of course Obama has needed to show that the American economy is expanding, he is also one of the more Liberal leaders today. Regardless, before being passed into law, the deal will face increasing scrutiny and protest by those who feel that it is undemocratic, a threat to working standards and bad for small business.
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