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What The EU-US Free Trade Deal Means

Chances are you haven’t heard of the Transatlantic Trade and Investment Partnership, a trade pact between the E.U. and the U.S. mentioned briefly by President Obama in his 2013 State of the Union speech.

However, negotiations are already underway, paving the way for a deal that will remove or reduce barriers between the two economies, greatly increasing trade.

According to the European Commission (EC), the U.S. and the E.U. already trade more than €2 billion ($2.6 billion) each day, making it the largest trade relationship in the world.

With Gross Domestic Products (GDPs) of $15 trillion and $16 trillion, respectively, the U.S. and the E.U. make up almost half of the world’s $71 trillion GDP, as estimated by the World Bank.

Possible Benefits

  • An income growth of 13.4% in the U.S. and 5% in the E.U., according to the online European politics magazine Public Service Europe (PSE).

  • The creation of an additional 1.1 million jobs in the U.S. and 1.3 million jobs in the E.U., PSE says.

  • Adding more than $120 billion to the U.S. economy, and more than $150 billion to the E.U. economy, according to a study cited by the EC.

  • A common regulatory system for products that have strict, but differing safety standards, such as cars, according to the EC.

Possible Downsides

  • A possible loss of privacy for Europeans, as the controversial copyright law Anti-Counterfeiting Trade Agreement, which the E.U. shot down in 2012, could be part of the deal, PCWorld reports.

  • The introduction of European airlines to the domestic American market could reduce fares, but could also result in bankruptcies for American companies and a loss of jobs in the U.S., according to Slate.

  • Reduced trade within the E.U. could weaken eurozone bonds, and reduced trade with countries not in on the deal could weaken those countries’ economies, according to PSE.

  • The mutual recognition of regulation could mean a “race to the bottom,” adopting the most lax regulations of each economic zones in areas such as cars, medicine, and finance, Slate reports.

Do you think the TTIP would be beneficial, or do the disadvantages outweigh the benefits? Tweet @curiousmatic

Ole Skaar