The US has just hammered out one trade agreement stretching across the Pacific. But the much discussed wide ranging agreeement across the trans-Atlantic with the EU is still being negotiated with the target of sealing it under Barack Obama’s second term looking doubtful.
A deal on the Trans-Pacific Trade Partnership, between the United States and 12 countries, including Australia, Canada, and Japan, was hammered out at the start of October 5. It marks a significant achievement for Barack Obama’s second term.
But other big trade deal on the horizon, the Trans-Atlantic Trade and Investment Partnership (TTIP) is still very much a work in progress. In theory the TTIP should also be sealed by the time Barack Obama leaves the White House in January 2017.
But there are still a series of problem points to be cleared up by the negotiators, not least the major issue of what shape the final arbitration system for disputes between companies that feel their investment opportunities have been damaged or infringed by their host countries. The European Commission has advanced the idea of a sort of arbitration court, with three judges nominated by it, three by the US, and three independents. But Washington has been cautious about this radical move.
The Czech Republic is closely following developments from a distance. And on November 10, the Ministry of Industry and Trade should make public the Czech National study of what the impact of TTIP would be on the local economy.
While the details are unknown, it can be safely be said that the ministry’s conclusions will be that TTIP is generally good news for the Czech economy. The overall argument will be that as a small and open exporting economy, the Czech Republic has everything to gain from a deal that could bring down barriers between the world’s two biggest trading blocks. The Czech government has been a major cheerleader for the whole TTIP process.
Of course, there might be some qualifiers that take a less rosy view. Some of those were voiced at a seminar and debate on TTIP in Prague on Wednesday night. One of the agreement’s goals is that many of the diverse standards that have developed across the Atlantic would be unified or their trade disrupting character de-fused. But in the auto sector, the standards are so legion and progress so far on tackling them been so disappointing that one participant doubted how realistic this goial will be.
Another pointed out that European import tariffs on US cars are several times higher than US charges on European exports, perhaps raising questions about whether ironing out these differences will be such a great idea for the European automotive sector. The panellists, who were mostly upbeat on TTIP, said they did not expect any major changes in consumer, ie car buyer, behaviour.
It seems that one of Europe’s biggest hopes for a pay off from an eventual TTIP deal is the access that it could give to US public tenders. This is a market which is still largely closed to European companies while US companies are said to enjoy greater access to European public markets. Some of the mechanisms that help close off the US markets to foreign competition are state subsidies, often for environmental and transport projects, which companies can only qualify for by meeting the demands of the individual states. Local states are likely to be very reluctant to see these disappear.
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