The U.S. and Europe face significant challenges. The EU is struggling to address a wave of human migration, an auto manufacturing scandal, and the risk of losing the U.K. The U.S. seems afflicted by partisan divisions and declining confidence in the economy. The two can help each other to meet these challenges by accelerating negotiations of the Transatlantic Trade and Investment Partnership. TTIP would not only promote free trade and investment, but also strengthen the transatlantic alliance, the bedrock of Western security.
The two economies account for $35 trillion in GDP. U.S.-EU trade tops $1 trillion annually and accounts for 15 million jobs. U.S. businesses have invested 40 times more money in the EU than in China. The transatlantic sphere is home to the world’s highest environmental, labor and health and safety standards. These protect consumers and result in higher quality exports.
Yet many of these standards are inconsistent, creating barriers to trade and investment. TTIP offers the opportunity to bring coherence to the high standards that make the transatlantic economy unique.
The U.S. and the EU are home to the world’s highest standards on the environment, labor rights, and health and safety.
TTIP will require difficult compromises, which politicians can achieve by focusing on the strategic value of an agreement and the adverse consequences of letting it founder. Short-term political costs will be offset by long-term gains in innovation, competitiveness, and economic growth for the EU and the U.S. Case studies in the pharmaceutical, energy and wine sectors demonstrate the powerful benefits TTIP can have for the transatlantic economy.
Take pharma. The inclusion in TTIP of robust intellectual property protections, transparent pricing and reimbursement procedures, and harmonization of pharmaceutical plant inspections would foster the development of new drugs and establish strong standards for future negotiations around the globe.
TTIP could also bolster competitiveness by creating a more vibrant transatlantic energy sector. In addition to weakening Russia’s energy dominance over central and eastern Europe, liberalized exports of U.S. natural gas would provide American producers with lucrative new markets and reduce the energy input costs for European manufacturers. The benefits of fostering mutual energy security are self-evident.
A key benefit of the transatlantic trade agreement would be the liberalization of U.S. natural gas exports to Europe.
The agreement also presents a tremendous opportunity for economic growth by bolstering key small and medium-sized companies. The EU is by far the largest export market for American wineries, representing 40 percent of U.S. wine exports.
Vintners from America’s winemaking regions are finding great opportunity in Europe, but are also hampered by onerous regulations, including the process for protecting their individual and regional names in Europe. European winemakers are also frustrated by the lack of full place-name protection in the U.S. Finding a mutually acceptable way to safeguard appellations seems reasonable and achievable.
We must find consensus on such issues to reap the benefits of innovation, competitiveness, and growth that TTIP promises. In a world of rising geopolitical competition, the transatlantic alliance remains as significant and strategically important as ever. Let’s not allow political inertia to frustrate our goals.
Gen. James Jones is chairman of the Brent Scowcroft Center on International Security at the Atlantic Council and a former national security adviser.