Hendrik Bourgeois is Vice President European Affairs at GE and Chair of the American Chamber of Commerce to the EU (AMCHAM).
Undoubtedly, concluding a comprehensive EU US Transatlantic Trade and Investment Partnership (TTIP) agreement would boost transatlantic investor confidence, and therefore contribute towards releasing corporate cash holdings on both sides of the Atlantic for ambitious investments. Estimates say that over €2 trillion worth of corporate cash is being held in the Eurozone, while reports indicate that US non-financial companies have record amounts of cash estimated at $1.5 trillion, on their balance sheets.
There are, however, from a European perspective, at least three main hurdles to be jumped over to bring this initiative to a successful and positive conclusion. First, Europe and its leaders will have to speak with a single and unified voice and be ready to compromise on key aspects of the trade pact among themselves which may be easier said than done. Unfortunately, having Europe speaking in one voice is not a new challenge for Europe. Some Member States are more enthusiastic about free trade and about bolstering relationships with the US than others, and the reality is that some stand to gain more from the agreement than others. The EU’s Member States will have to come together and make the necessary comprises to make this work for the EU, even if it may be seen by some to be potentially adverse to some vested interests in certain countries.
Second, both the EU and the US will have to go beyond their usual limits in trade negotiations and provide more concessions than they are used to. This is because TTIP includes a significant regulatory chapter and needs to deal with the more thorny issue of non-tariff barriers, and because both sides negotiating are of relatively equal size and economic strength. This is unprecedented for both parties. DG Trade and USTR will need to change their traditional approach to negotiating and think ‘out of the box’ to bridge problematic differences to make TTIP work.
Last and by no means least, an ambitious and comprehensive TTIP agreement will only become a reality if consumer, labour, environmental, and other civil society groups can reach a sufficient level of comfort that the benefits of the agreement will outweigh potential risks to their core interests. The European Parliament has a vital role to play in overcoming this last hurdle.
Time is of the essence and the clock is ticking. Significant progress will have to be made before Karel De Gucht’s term as EU Trade Commissioner ends later this year, and certainly before the US Presidential election period in the US in 2016.
This transatlantic deal, if successful, will not make everyone happy but it will increase the prosperity of many. This is a huge opportunity that neither the US nor Europe can afford to waste. So it requires all involved to give it the greatest possible chance of success, which means undertaking all efforts necessary to address at least the main hurdles with realism and determination. The potential prize offered by a successful TTIP makes undertaking these efforts very worthwhile and an economic imperative for the EU and the US.