TTIP&TRADE in Action – June 15, 2016

The Atlantic Council’s Global Business & Economics Program‘s latest EconoGraphic Britannia, Rule the Trade!” analyzes the benefits of Britain’s accession to the European Union, and the negative effects a “Brexit” would have on the British economy. 

If you missed last week’s new Atlantic Council publication “To Brexit or to Bremain- That is the Question“, make sure to read it before the referendum!

In Focus

With the British referendum approaching fast on June 23, we will dedicate this week’s “in focus” section to coverage of the “Brexit Vs. Bremain” debate. 
Cameron Confirms He’ll Pull UK Out of the Single Market After Brexit
British Prime Minister David Cameron affirmed on BBC’s “The Andrew Marr Show” that voting for Brexit would mean Britain leaves the single market because the Brexit campaign had made it clear to voters that voting to leave also meant pulling out of the single market in order to restrict immigration and strike trade deals with countries outside the European Union. There have been reports that MPs in the House of Commons could still vote against leaving the single market to protect Britain from devastating economic consequences. (Politico)   
Market Volatility Ahead of Brexit
As referendum polls tilted recently towards Brexit, the pound fluctuated significantly as the cost of insuring against volatility in sterling to dollars neared its financial crisis peak. Alex Holmes at Capital Economics stated, “Although the latest polls suggest that public opinion in the UK has swung in favour of voting to leave the EU, the weight of money being wagered on the outcome still implies that a Brexit would come as a big surprise and therefore cause waves in the financial markets.” (Financial Times)

France Will Take Tough Stance on Post-Brexit Britain 
Politico reports that if “Vote Leave” wins, France will do everything in its power to sever ties with Britain, because it does not want anti-EU political parties to gain traction if their electorates see that Britain can still enjoy single market access without having skin in the game. Accordingly, Paris plans to withdraw subsidies, re-evaluate trade relationships by sector, and establish new immigration rules. It also plans to revoke the authority of British supervisory bodies, thereby restricting the “passporting” of financial services.This could potentially lead to the establishment of a new European financial hub distinct from London. (Politico)
Further reading suggestions: 
Britain: A time to lead rather than leave the EU? , Philip Stephens, Financial Times
The referendum rollercoaster, Mark Leonard, European Council on Foreign Relations

Speeches & Announcements 

Commerce Secretary Pritzker: Trade Agreements “Essential” for US Leadership 

“[T]hose agreements are our best answer to the challenges that come with globalization and automation. They help us shape the rules and guide how globalization proceeds to best protect the interests of Americans.” – Secretary of Commerce Penny Pritzker 

US Secretary of Commerce Penny Pritzker discussed the role America’s private sector can play in helping shape modern commerce and the importance of trade agreements to strengthening American global competitiveness. Among other benefits, trade agreements can utilize “commercial diplomacy” to help set labor and environmental standards, rules for e-commerce, intellectual property and trade secret protections, and strengthen national security. (Commerce Department)

Chancellor Merkel: Pros Outweigh Cons in TTIP 
“Let me stress once again: Existing as well as future EU standards will be maintained and incorporated in a final TTIP agreement.” – Chancellor Angela Merkel 

At an event earlier last week, German Chancellor Merkel reiterated her support for TTIP and asks the audience to ask themselves the question if they want “maker” or a “taker” of global standards. Considering the high level of unemployment in many European countries, Merkel sees TTIP as the needed impetus for European economic growth and called upon the audience to support a “satisfactory” agreement for the sake of Europe. – Original speech in German (Bundeskanzlerin)

Trade Leaders Talk TTIP
“For an open and trade-dependent country such as Sweden, it has never been an option to say no to trade, and the TTIP negotiations are a historic opportunity to contribute to Sweden’s and the EU’s prosperity.” -Minister for European Union Affairs and Trade Ann Linde

Minister Linde was joined by US Trade Representative, Ambassador Michael Froman, and EU Trade Commissioner Cecilia Malmström in an event hosted jointly by the Swedish Government Offices, theSwedish Trade Union Confederation, and the Confederation of Swedish Enterprise to bring together representatives of business, civil society, and the environment from the European Union and the United States for a full-day dialogue on TTIP. (Government Offices of Sweden



BusinessEurope Head Explains How to Close TTIP
In a meeting with US Trade Representative Michael Froman, head of BusinessEurope Emma Marcegaglia stated that she would be dissatisfied with a “watered-down” agreement that only addresses customs duties and tariffs, and doesn’t mention public procurement measures that will eliminate access barriers for American contractors and protect characteristic regional products. Marcegaglia also stressed that this year would be the last window in several years to productively conclude TTIP negotiations- “at least a political agreement the European Union could then formalize with the next US administration.” (Italy24)
Geographical Indicators Issue Divides American Vintners 
The US wine industry is divided on the European Union’s demands on “geographic indications” in TTIP negotiations: While Napa Valley wants Washington to give in to the EU demands on this issue, the rest of the US wine industry wants to uphold a deal struck in 2006. In March, the European Commission published a new proposal under the TTIP that would “update and improve” the 10-year-old wine agreement, ending American use of 17 semi-generic wine names and extending the 2006 agreement to distilled spirits. It also would create a committee on trade in wine and spirits to manage changes to the list of protected names. (Politico)

TTIP Action Partners

Would you like to hear how you can partner with the Atlantic Council and our trade work? Click here and learn more!


Recent Analysis

“Fundamental Rethink” of Trade Agreements Needed to Embrace TTIP
Ana Palacio, former Senior Vice President of the World Bank, and a current member of the Spanish Council of State, stated that in the short run, governments should prioritize support programs that will help those who lose out from Free Trade Agreements (FTAs). With regards to TTIP, she insists that free trade, guided by international rules and standards, has a net positive macroeconomic impact. To avoid losing these benefits, we need to recapture public support for growth-enhancing deals like the TTIP. “The key will be to smooth out free trade’s negative impacts and prepare societies better for increasing economic openness.” (Project Syndicate)
The Benefits of Lowering Trade Barriers
Nando Cesarone, President of UPS Europe, published a piece touting the new “de minimis” standard: the maximum dollar value of exports to the United States that remain exempt from customs duties has jumped from $200 to $800. This will benefit Europe’s small and medium enterprises (SMEs), which according to a UPS survey have typically been export-averse because of high trade barriers between the United States and the European Union. Cesarone stated that TTIP can open further opportunities to SMEs on both sides of the Atlantic. (American Chamber of Commerce to the EU)
How TTIP Will Benefit Germany
In the latest installment of its “TTIP World Tour”, American pharmaceutical company Lilly analyzed how TTIP will benefit Germany. The United States recently became Germany’s number one export destination. Of the 31 million export-related jobs in Europe, Germany’s comprises 23% of these, and many are specific to the United States. TTIP will help fortify an already strong economic and export foundation and create new jobs for German citizens. (Lilly)

TransPacific Partnership – News & Analysis

President Barack Obama Slow Jams For TPP 
In his June 10 appearance on The Jimmy Fallon Show, President Barack Obama listed some of the accomplishments of his administration. Notably, he also mentioned the TPP, to which Fallon responded: “Now, hold on there, Prez dispenser — are you saying you’re down with TPP?”  to which Obama responded, “Yeah, you know me. Look, Jimmy, the TPP allows American businesses to sell their products both at home and abroad. The more we sell abroad, the more higher paying jobs we provide here at home. It’s that simple.” Fallon then asked, “So what you’re saying is, this trade deal will help put everyday Americans back to—” and then he and Obama launched into a rendition of Rihanna’s hit song “Work.” (Vox)
TPP A Focal Point of America’s Small Business Summit
As hundreds of small businesses travel to Washington this week for the US Chamber of Commerce’s annual America’s Small Business Summit, it is important to keep in mind that 98% of the nearly 300,000 American companies that export are small and medium-sized enterprises (SMEs), and they account for one-third of American merchandise exports. Trade agreements such as the TPP and TTIP are even more important to smaller companies than to multinational corporations because tariffs, testing costs, licensing fees and other burdens that may be minor irritants to a large firm can be show-stoppers for smaller companies. (US Chamber of Commerce)

Read an Atlantic Council report on the issue here

Google Announces Support for TPP
In a blog post, Google’s Senior Vice President and General Counsel Kent Walker supports the TPP because it “promotes the free flow of information in ways that are unprecedented for a binding international agreement.” He listed some of the numerous benefits that TPP will have on digital transparency, including allowing cross-border transfers of information, prohibiting members from forcing companies to store data exclusively locally, limiting governments’ ability to demand access to encryption keys or other cryptographic methods, and preventing customs duties on digital products.

Google joins many other tech groups like the  Information Technology Industry Council (ITI), the Tech CEO Council, and the Software Information Industry Association (SIIA) in voicing support for the TPP. (Google Public Policy Blog)


The Bigger Picture – Trade in Action

25 Years Later: The Future of Mercosur
After twenty five years, Mercosur, the southern common market comprised of Argentina, Brazil, Paraguay, Uruguay, and Venezuela, seems unlikely to galvanize any further intra-trade liberalization, and has instead turned into a political echo chamber, Global Risk Insights reports. The organization could improve if Brazil and Paraguay step in to prevent conflict-riddled Venezuela from succeeding the presidency of the group, but this seems unlikely. Another option is to conclude negotiations with the European Union. (Global Risk Insights)
Report from the 18th Round of Trade in Services Agreement Talks
The 18th round of Trade in Services Agreement (TiSA) took place from May 26 to June 3. The action plan consisted of discussing the twenty two revised offers submitted in early May, specifically with regards to telecommunications, e-commerce, transportation, and transparency in financial services, among other topics. The next round of negotiations will take place from July 8 to 18 in Australia. (European Commission)
China’s Market Economy Status Under Fire From French, Americans
French Trade Minister Matthias Fekl declared that China is not a market economy and that the European Union is collaborating closely on this definition issue with the G7 and the United States. Meanwhile, the United States is also leery of granting China market economy status until it can clean up its dumping practices, as elaborated in this editorial from the Washington Post editorial board. (Politico)

Upcoming Events

Regional Comprehensive Economic Partnership Trade Negotiations – June 12-18, in Auckland – More Information
Transformations in the Middle East: The EU’s response – June 14, in Brussels – More Information
The Brexit Debate and What it Means for Europe – June 15, in Washington – More Information
European Elections: Past and Future – June 15, in Brussels – More Information
Transparency and Freedom of Information Within the EU Institutions – June 21, in Brussels – More Information
Young Transatlantic Network: UK-EU Referendum: Will They Stay or Go? – June 22, in Washington – More Information
 Please send us suggested news stories, opinion pieces, publications, and upcoming events that you would like us to highlight! 
Email with your ideas and suggestions.