The EU’s transatlantic trade deal loses its teeth

Jonathan Lindsell, 1 July 2013

You wouldn’t think it to hear the ecstatic, almost utopian announcements arising from the Northern Ireland G8 summit, but the much-vaunted ‘Transatlantic Trade & Investment Partnership’ (TTIP) has already run aground.

Kenneth Clarke, minister very evidently without portfolio, wrote last month in the Telegraph that the proposed deal was one of the key reasons his party should pipe down about EU renegotiation or ‘Brexit’. Obama, Cameron and Barroso seemed equally triumphant after their Loch Erne summit.

This bluster belies the fact that the TTIP has experienced several setbacks, even before it truly kicks off later this month. This was inevitable, given the hopeless optimism with which the deal was announced around Christmas.

Back then, we were calling it a ‘Free Trade Agreement’ (FTA). As I pointed out at the time, there are too many areas of protectionism, across 28 European member states plus the US, for tariff elimination to be a realistic goal. Sure enough, this summer’s rhetoric has quietly ditched free trade and now focuses on ‘non-tariff barriers’ (NTBs), essentially the work of harmonising regulations.

Back then, both sides of the pond were going to work together so seamlessly that everything would be ready by late 2014. Now we see that Francois Hollande has dragged his feet so much on the issue of the French cultural exemption (French film is strictly off the free-trade table) that the negotiations have only just been given a full green light.

Back then, EU Trade Commissioner Karel De Gucht was promising the deal would bring an extra 1% GDP growth to the EU. This is the same Karel De Gucht, remember, who has just taken our continental bloc into a trade war with China over solar panel prices, which barely affect the UK at all.

A comprehensive study from the UK government creates four scenarios ranging from ‘modest’ to ‘ambitious’. Even the ‘ambitious’ scenario only brings 0.35% growth; the ‘modest’ one as little as 0.14%. Heaven knows what a ‘pessimistic’ scenario would look like – perhaps the we’d manage to get negative growth out of the deal? Still, 0.14% is about £4.0 billion per annum, which would be nice. However, that isn’t a sum ground-breaking enough to convince the public to embrace Brussels with open arms.

Nor should it be.

When Ken Clarke dangles the TTIP carrot before the public’s eyes, he is hiding a much juicer one behind his back. He argues that on our own, the UK wouldn’t be able to negotiate such big trade deals, knowing full well that this is nonsense. I show here that even tiny Iceland has the ‘clout’ to arrange serious FTAs with huge economies like China, and here (pp.12-13) that Britain would certainly be able to make trade deals with both Europe and America.

Next time a Europhile sings the TTIP’s praises, remember the UK could have a better deal, sooner, without European obstructions.