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The Transatlantic Trade and Investment Partnership: Great Promise for Transatlantic Economic Growth

A Historic Moment in US-EU Economy Strategic Partnership

On March 20, the Obama Administration notified the US Congress of its intent to enter into negotiations on a comprehensive trade and investment agreement with the European Union. As it is stated in the announcing letter of the acting United States Trade representative Demetrios Marantis, it is a decision that follows a year-long examination of options for increasing US-EU trade and investment conducted by the US-EU high level working group, established by president Obama and EU leaders during their November 2011 Summit Meeting. After consulting closely with a wide range of public and private sector stakeholders on both sides, it was concluded that “/…/ an agreement that addresses a broad range of bilateral trade and investment policies, as well as global issues of common interest, could generate substantial economic benefits on both sides of Atlantic”.

The American Chamber of Commerce in Slovenia (Member of AmChams in EU) warmly welcomes the European Commission’s follow up to the announcement of the intention to negotiate a Transatlantic Trade and Investment Partnership (TTIP). AmCham EU Members believe the Commission proposal for a mandate to negotiate this agreement reflects the broadly shared conviction that transatlantic trade and investment can be an even stronger driver of mutual job creation, economic growth and competitiveness.

Transatlantic Trade and Investment are Key Pillars of the World Economy As well As of European and American Prosperity

According to the study of the AmCham EU Transatlantic Economy 2013 survey presented at the annual Transatlantic Conference on 21 March in Brussels, despite economic turbulence, the US and Europe remain each other’s most important markets. The transatlantic economy generates $5,3 trillion in total commercial sales a year and supports up to 15 million jobs on both sides of the Atlantic. It is the largest and wealthiest market in the world: accounting for one third of total goods and services trade and nearly half of global economic output. The US and Europe are each other’s primary source and destination for foreign direct investment: Europe has attracted 56% of US global foreign direct investment (FDI) since 2000, US FDI to Europe in 2012 topped $206 billion!

However, as a result of a globalization proceeding and emerging markets rising, transatlantic markets are loosing their predominance position, which is at the time still considerable, but less overwhelming than in the past and most probable to change.

TTIP Expands US-EU Trade and Investment thus Increases Prospects for Growth and Employment

The aim of an ambitious, comprehensive and high-standard agreement is to significantly expand trade and investment between the US and EU. Ambassador Demetrios Marantis, United States Trade representative, Demetrios Marantis explained that TTIP will seek to substantially eliminate existing trade barriers and establish mechanisms that help the two sides involved to address any trade concerns that may arise and thus further deepen economic integration. New and innovative approaches to reducing the adverse impact on transatlantic commerce of non-tariff barriers will be an important focus of the negotiations. Beside, reducing costs associated with regulatory differences that may unnecessarily impede trade, while continuing to meet legitimate regulatory objectives, will also be a significant element.

Among numerous opportunities for both sides to gain from this partnership, one of the most important is that through increased efficiency, business prospects are also likely to rise, which in turn should help increase prospects for growth and employment.

Furthermore: “The TTIP will bring rules and principles on emerging global issues of common concern, thus strengthening the rules-based trading system from which all economies benefit.” So the aim of the TTIP is also to establish rules and disciplines that address emerging challenges to the global trading system.

TTIP should be concluded before the end of 2014, and should:

• Eliminate tariffs and other border obstacles to trade in goods

• Liberalize trade in services, including the data flows that underlie them

• Expand and protect investment

• Open government procurement markets

• Stimulate innovation and protect intellectual property

• Enhance capital markets

• Facilitate the movement of people, and

• Promote regulatory cooperation.

“The Potential Gains Overwhelmingly Justify the Effort.”

According to AmCham EU, one of the biggest challenges facing TTIP is that both the EU and the US have high standards that are not always compatible. The aim of the agreement is not to undermine these regulatory standards but rather to merge them and encourage the EU and US to work together to set high regulatory standards that the rest of the world will listen to. We must not underestimate the challenge of concluding such a comprehensive trade and investment agreement but as Ambassador Demetrious Marantis put it: “The potential gains overwhelmingly justify the effort.”

AmCham Slovenia Initiative to Raise Awareness of the Importance of TTIP

Since US and all EU national governments are involved in the TTIP, at AmCham Slovenia we believe that besides governments setting up the rules it is also very important for business to decide what the issues are and suggest the solutions.