ESTADÍSTICAS POBLACIONALES

The formal negotiations between the EU and the US on TTIP started in July 2013. TTIP is an agreement designed to boost economy, increase trade and investments between the EU and the US – these two economies together accounts for a half of world GDP. Among economists it is generally accepted that trade liberalization is beneficial, as it enables better allocation of economic resources. Greater trade liberalization between the EU and the US will allow both regions and their states to specialize in production of goods in which they have comparative advantage (for these goods the opportunity cost of production is lower). As a result of deeper trade liberalization, more consumption opportunities will become available as well as the final prices will fall. In addition, the new trade theory also shows that even if there is no specialization in particular production, free trade will constitute to an increase in variety of goods. Moreover, the deeper integration of the Western regions is expected to counterbalance the strength of other economic powers, first and foremost growing China.

Unlike conventional FTAs, TTIP is a new kind of FTA focusing on both tariff and particularly non-tariff barriers (NTB) removal. The main objective of the TTIP is to harmonise the different regulations and standards on both sides of Atlantic. It is expected that the regulatory coherence will boost the EU-US investments and increase transatlantic trade. It is calculated that the potential benefits of TTIP for both regions would be substantial, and thus “the costs involved may still be mitigated or reduced through partial regulatory convergence and cross-recognition of standards” (CEPR, 2013, pp. 9). However, many regulations on both sides of Atlantic cannot be simply removed since they have been established to serve legitimate domestic purposes. Moreover, providing that the legislative frameworks between the EU and the US, in terms of underlying values and approach, differ considerably, it is extremely difficult and sometimes nearly impossible to make the systems more compatible and coherent. This incompatibility of different systems and NTBs disparity across the sectors, confirm the sensitivity in the TTIP negotiations. It is also suggested that TTIP will emerge as a ‘living agreement’. As soon as TTIP is implemented there may be identified new areas of cooperation. In order not to re-open the initial international agreement neither to modify EU-US institutional frameworks, a new mechanism called regulatory cooperation will be established. The principal objective of this new concept is a permanent bilateral regulatory cooperation based on identifying, facilitating and increasing the level of future regulatory compatibility and convergence between the EU and the US, where feasible.

In the section eight of this paper, a particular attention is paid to the ISDS mechanism. It is outlined that ISDS was primarily set up, more than a half-century ago, to protect foreign

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investors operating in the third countries. However, this protection mechanism was lately embedded in most of the FTAs, including FTAs between two developed countries. However, since the foreign investors recognized weaknesses of this system, they have started abusing it. From 2001 onwards, the number of initiated ISDS cases, especially within developed countries, have skyrocketed. This mechanism empowers foreign investors and corporations to attack domestic policies. When investors feel that the new policy or regulation are threats to their property rights or investments they are allowed, on the basis of ISDS, to litigate against the state. Moreover, they are entitled to a monetary compensation if they able to prove that the measures taken by the host state has violated the investment treaty and caused him a significant damage. Current ISDS system thus hampers the ability of states to ‘freely’ generate new policies and to regulate in public interest, since the state firstly consider whether the new regulation or policy do not harm its foreign investors. Baring this in mind, the possible inclusion of ISDS into TTIP has evoked the major disagreement in the TTIP negotiations. As a result of increasing opposition, the negotiators have initiated a discussion to reform this mechanism or to find an alternative solution to protect foreign investors. The last proposal the ‘Investment Court System’ was submitted in the middle of September 2015 by EU Trade Commissioner Malmström. This new system is based on certain elements such as high transparency, accountability, a guarantee of no conflict of interest, and establishment of a new Appeal Tribunal. Last but not least, it should guarantee the governments’ right to regulate in public interest.

The last section of this paper overlooks the main empirical studies of TTIP - their findings and methodology were summarized and compared. It combines both the main ‘pro-TTIP’ studies, namely: Ecorys (2009), CEPR (2013), CEPII (2013) and Bertelsmann/GED (June 2013), and two other alternative analysis, particularly OFSE and GDAE, that assess critically the findings and the underlying methodology. According to the ‘pro-TTIP’ studies, TTIP will be beneficial for the EU, the US and global economy in terms of GDP growth. Furthermore, it will enhance competition, as well as it will increase export and import, job creation and overall wages. These findings, especially those of CEPR (2013), are also the main argument of the EC while presenting TTIP’s benefits. On the other hand, all these four analysis are criticized by Austrian Research Foundation OFSE and by US Global Development and Environmental Institute GDAE. It is argued that all four ‘pro-TTIP’ studies have used the same underlying methodology (the CGE model - GTAP and MIRACE) that is considered to be inappropriate, and thus, their assumptions (GDAE, 2014; OFSE, 2014). In addition, GDAE commissioned its own alternative analysis in order to provide unbiased estimates. Applying different model (GPM), it has been concluded that TTIP will mostly have negative effect on export, jobs, wages, government revenue, financial stability, social and environmental costs etc. What is more, it is stressed that

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neither of the four ‘pro-TTIP’ analysis has considered the adjustment costs, such as social and environmental costs, in the calculation of TTIP’s outcome.

TTIP is an exceptional bilateral trade agreement that pursues to liberalise two biggest economic players in the world. Considering the magnitude and the gravity of such an agreement, its negotiations give a unique opportunity to reconsider the current ‘old’ paradigm of FTAs. Moreover, it provides a room for establishment of a new futuristic model that may serve as an example for forthcoming FTAs. An evidence for such an assumption regards the TTIP negotiations on, for instance, ISDS mechanism or regulatory cooperation body. Last but not least, in certain areas, particularly ISDS, it has been shown the power and the significance of civil society and of the public voices. Therefore, it can be further anticipated that the final form of TTIP will be, to some extent, based on the direct input of civil society, thus, in accordance with democratic principles.

43 | P a g e Appendix I

Figure 4 – Export Soybean and Soymeal to the EU in 2013

Source: EC-GMOs, 2015

The map represents data from 2013, 32 million tonnes of soymeal and soybean (96% of EU consumption from which 90% was GMOs origin) were imported to the EU, where most of it was used as a feed for livestock

44 | P a g e Appendix II

Figure 5 - Regulatory Cooperation Under TTIP

Source: BEUC, 2015

Figure 5 represents a draft of horizontal structure of regulatory cooperation under TTIP. BEUC argues that the complicated structure is likely to become an impediment in pursue of new regulations.

45 | P a g e Appendix III

Figure 6 – Known ISDS cases, annual and cumulative (1987-2014)

Source: UNCTAD, February 2015, pp. 5

From the graph is obvious that relative ISDS claims have been dramatically increasing for the past decade. The most frequent accused state, in 2014, was Spain, followed by Costa Rica, the Czech Republic, India, Romania, Ukraine and the Bolivarian Republic of Venezuela (UNCTAD, February 2015, pp.5)

46 | P a g e Appendix IV

Figure 7 - An Increase of Real per capita Income in EU Members

Source: Bertelsmann/GED, June 2013

The Figure 7 represents an estimated increase of real per capita income in the EU Member States. The researchers from Bertelsmann/GED assume that under comprehensive liberal scenario of TTIP, it is expected a significant increase of real per capita income in all EU Member States.

47 | P a g e Appendix V

Figure 8 - EU Members and their support for TTIP

Source: PEW 2015

The map from November 2014 displaying the EU region and particular countries and their support for free trade agreement with the US.

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