The European Union and the United States are each other’s main trading partners and enjoy the largest bilateral trade relationship in the world. Transatlantic trade flows (goods and services trade plus earnings and payments on investment) averaged $4 billion each day through the first three quarters of 2011. The total stock of transatlantic investment exceeded $3 trillion in 2010. In 2008 EU/US combined economies accounted for nearly 60 % of global GDP, approximately 33 % of world trade in goods and 42 % of world trade in services. Both partners make up for more than half of Foreign Direct Investment (FDI) in each other’s economy.
However, for all its value and importance, the EU-US trading relationship still suffers from numerous obstacles, preventing it reaching its full potential to provide growth and jobs. To put this into perspective UK goods such as sportswear have a 32% tariff when exported to the US, this ultimately affects the competitive price of the product in the US market. Moreover, the intellectual property variation between the US and UK means that musicians are not rewarded when their songs are played in the US outlets. Moreover, in the US only 32% of the US procurement market is currently open to EU businesses. For instance all internal US flights can only be operated by US airlines, they are not subject to international competition, therefore flight prices remain high and it restricts the connections that EU flights can make in the US. Whereas in Europe, the US is granted greater freedoms, it is this imbalance which has caused much irritation. There are many barriers that we can reduce to increase opportunities for EU-US trade.
That is why the EU and the US are seeking to establish a free trade agreement between them to enable trade to flourish across the atlantic. The aim of this agreement is to increase trade and investment between the EU and the US by unleashing the untapped potential of a truly transatlantic market place. The agreement is expected to create jobs and growth by delivering better access to the US market, achieving greater regulatory compatibility without lowering standards between the EU and the US, and paving the way for setting global standards. The European Council adopted a mandate for negotiations on 14 June 2013 which has since been made public.
The European Commission estimates that a comprehensive deal with the US would benefit the EU to the tune of €120bn, which translates on average to an extra €545, (£433), in disposable income each year for a family of four in the EU. This is the best value stimulus that Europe can afford. For the UK in particular exports could increase by over £400million.
Both the Conservative Party and I believe that this agreement is fundamentally beneficial to all in the UK, EU and the US. The broader and deeper the agreement, the greater the benefits that can be achieved for large companies, small and medium sized enterprises and most importantly consumers. I have been disappointed at the slow progress of talks to date and I hope that they will accelerate following the midterm elections that took place earlier in November. However, if there is a choice between speed and substance my colleagues and I are firmly on the side of achieving substantial gains for the UK. If the agreement falls short in breadth or depth in any way, I feel it will be a missed opportunity that will hinder growth in the UK, Europe and US.
As the ECR group Co-ordinator on the International Trade Committee (INTA) which is following TTIP negotiations, I am keen to see this agreement come through. More details about the benefits and debates surrounding TTIP can be found here on our TTIP specific website: http://www.ttipunpacked.org/