On May 24th, THO hosted “World Economy, Bridging the Atlantic,” a roundtable panel discussing the Transatlantic Trade and Investment Partnership (TTIP) and the future for global trade networks under the possible bi-lateral trade agreement. The panel included Professor Carlos Vegh of Johns Hopkins University, Monica De Bolle of the Peterson Institute, Peter Sparding of the German Marshall Fund, and moderator Sabeen Malik of the US Department of State.
All of the speakers agreed that it is unlikely that Turkey will become a member of TTIP in the near future. However, this EU-US agreement is important to Turkey because it will signal a change in tariffs for the country. According to Peter Sparding, there is a big push to finish talks this year but the end of 2016 represents a tight and ambitious timeline with key German and French elections coming up. However, this Agreement is important for Turkey because it will signal a shift in tariffs.
Mr. Sparding, just returned from a trip in Europe, characterized the issues surrounding TTIP for Europeans. He explained that instead of the conventional worries of job loss that have historically accompanied trade agreements, many Europeans are now more concerned “about standards and lack of democratic control.” For EU consumers, standards surrounding food production and labor are of great importance, and these consumers worry that TTIP may lower standards at home. Indeed, 70% of Germans view TTIP negatively.
Monica De Balle offered a different perspective by focusing on how other parts of the world view TTIP. She used Brazil as an example to illustrate the changes we are seeing in emerging markets and how these markets play into the larger trade community. Many emerging markets have built up institutions, frameworks, and fiscal laws to now be able to handle economic setbacks without letting them snowball into crisis. Although there is currently a political crisis in Brazil, the country is now embracing negotiations with outside parties on economic issues. Professor Vegh explained how South American countries in general are opening up without being part of trade agreements, shifting the balance with regards to emerging powerhouses and which countries may be affected by TTIP.
Technology was important topic covered during the event. Mrs. De Balle highlighted the reality that the manufacturing sector is being replaced by the service sector in this digital age, recommending that “we need to foster the internet in order to keep trade between EU and US strong.” Sabeen Malik elaborated on the importance of good internet policy with regards to trade agreements, saying “it is necessary that the IT sector is supported through access, connectivity, good infrastrucuture.” Ms. Malik believes that large trade partners like Turkey and the US should look to smaller developing economies for new partnerships in technology and trade even if TTIP negotiations are stalled. In general, smaller emerging markets have been doing better than large ones.
The panelists left the audience with reasons why there has been some confusion surrounding TTIP talks for citizens on both sides of the Atlantic. Monica explained that “we as economists have not been vocal enough about people being patient and waiting for [economic] benefits to come slowly--real change happens slowly.” Conversly, Professor Vegh believes “It is a failure of the politicians in a country like the US not to educate the public on how to look at this.” Whatever the reason, the goal, according to Malik, should be “getting above the rhetoric and talking to people about the actual deal and what it will affect.”