4real2014 internship report samlet - IBP · PDF file04.02.2014 · The$Transatlantic$Trade$and$Investment$ Partnership$and$the$global$trade$regime$$ Report$of$internship$at$the$Danish$Embassy$in$Washington,$D.C.$

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Report$of$internship$at$the$Danish$Embassy$in$Washington,$D.C.$

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Bsc.!International!Business!and!Politics!–!Copenhagen!Business!School!2014!!

Saila!Naomi!Stausholm!

Supervisor:!Edward!Ashbee!

Date:!08.01.2014!

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23!pages!incl.!front!page,!table!of!contents!and!bibliography!!

STU!excl.!front!page,!table!of!contents!and!bibliography:!43.228!


Report!of!internship!at!the!Danish!Embassy!in!Washington,!D.C.!!

Copenhagen!Business!School!2014!!

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Table$of$Contents$$Introduction:$Regionalism$and$the$global$trade$regime$ 3!

Experience$from$the$internship$and$description$of$workplace$ 3!The$trade$department$ 3!The$economic$department$ 4!Considerations$on$the$relevance$of$my$work$for$the$IBP$study$ 5!

Transatlantic$trade$relationship$ 6!The$Transatlantic$Trade$and$Investment$Partnership$ 6!Comprehensiveness!of!a!possible!agreement! 8!Regulatory!trade!barriers! 10!Development!of!global!rules! 12!

Trade$theory$ 12!International$trade$ 13!Global$policy$coordination$ 14!The$contemporary$trade$regime$ 15!The$current$state$of$the$trade$regime$ 17!

Discussion:$how$can$regionalism$and$the$TTIP$change$the$trade$regime?$ 18!

Conclusion$ 20!

Bibliography$ 22!!!

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Introduction:$Regionalism$and$the$global$trade$regime$$In!the!spring!semester!of!2013,!I!held!an!internship!at!the!Embassy!of!Denmark!in!

Washington!DC.!My!position!was!split!between!two!departments:!the!Trade!department!and!

the!Economic!department.!In!this!report,!I!will!briefly!outline!the!nature!of!my!work!and!my!

key!experiences.!I!will!then!go!into!a!deeper!analysis!of!an!issue!I!addressed!through!much!of!

my!work!at!the!embassy:!the!transatlantic!trade!relationship!and!the!ongoing!negotiations!on!

a!preferential!trade!agreement!between!the!EU!and!US.!I!will!briefly!describe!how!these!

negotiations!have!formed!my!internship!and!then!go!on!to!engage!in!a!critical!discussion!of!

trade!theory!and!the!political!economy!of!trade.!I!seek!to!analyze!how!regional!trade!

agreements!such!as!the!Transatlantic!Trade!and!Investment!Partnership!(TTIP)!can!change!

the!global!trade!regime!developed!through!the!General!Agreement!on!Tariffs!and!Trade!

(GATT)!and!the!World!Trade!Organization!(WTO)!in!the!20th!century.!I!will!answer!the!

research!question:!How!are!regional!trade!agreements!changing!the!trade!regime?!I!pose!this!

question!because!regionalism!is!becoming!increasingly!important!in!the!global!trade!regime,!

and!as!the!larger!powers!EU!and!USA!negotiate!entering!into!one,!the!impact!of!such!an!

agreement!might!alter!the!arena!where!trade!policy!is!negotiated!for!good.!My!aim!is!to!give!

an!account!of!the!impact!of!regionalism!in!general!and!the!TTIP!in!particular!on!the!global!

political!economy!of!trade.!!

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Experience$from$the$internship$and$description$of$workplace$The$trade$department$The!trade!department!of!the!Embassy!is!formally!a!part!of!the!Danish!Trade!Council.!This!

means!it!works!as!a!consulting!firm,!although!owned!and!operated!by!the!government.!Danish!

businesses!serve!as!customers,!to!whom!the!department!provides!knowledge!and!support!in!

export!to!the!American!market!in!all!parts!of!the!process.!While!many!services!are!free!of!

charge,!a!big!part!of!the!work!is!to!get!larger!longYstanding!agreements!with!companies!

wishing!to!pursue!the!American!market!and!thereby!entering!into!a!paid!contract.!!

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The!nature!of!the!support!granted!for!companies!varies!a!lot.!However!the!embassy!is!mostly!

focused!on!the!heavily!regulated!life!science!and!Cleantech/environment!sectors,!while!other!

sectors!are!represented!at!other!missions!in!the!US.!Some!of!the!specific!work!that!I!did!was!




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market!analyses!to!find!the!market!tendencies,!players!and!drivers!in!the!market!for!a!specific!

product,!e.g.!an!innovative!and!energy!saving!way!to!cleanse!swimming!pool!water.!!

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This!taught!me!a!lot!about!the!nature!of!the!American!market!and!transatlantic!differences.!

Specifically!I!would!say!that!branding!and!management!matters!more!at!the!American!market!

than!the!Danish,!and!that!drivers!tend!to!be!more!economic!than!social!or!environmental!

concerns.!Furthermore!it!taught!me!a!great!deal!about!the!Danish!exporting!industries!and!

how!we!brand!ourselves.!Through!a!marketing!event!held!at!the!embassy!open!house,!we!

tried!to!brand!Danish!businesses!as!sustainable!and!environmentally!friendly.!While!that!does!

speak!to!a!segment!of!American!consumers,!the!majority!of!customers!will!often!be!more!

concerned!about!the!possible!savings.!Often!Danish!companies!are!very!surprised!by!this!fact.!!

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Another!important!lesson!from!working!with!analysis!of!the!American!market!is!how!much!it!

can!differ!between!states.!A!common!surprise!for!Danish!companies!is!the!need!for!different!

distributors!and!different!permits!in!the!states!they!wish!to!export!to.!Furthermore!this!work!

has!been!an!excellent!exercise!in!research,!as!I!have!had!to!find!stakeholders!and!knowledge!

on!niche!areas,!as!well!as!communicate!these!findings!to!the!people!who!will!actually!be!

basing!their!business!decision!upon!them.!Through!working!with!businesses!needing!permits!

and!FDAYapprovals,!it!became!clear!to!me!how!different!it!is!to!trade!within!the!internal!

market!of!EU!and!exporting!to!the!US.!While!tariff!barriers!are!low,!there!are!a!lot!of!“red!

tape”!to!deal!with!for!any!business,!small!or!large,!pursuing!the!American!market.!!

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The$economic$department$The!economic!department!mostly!handles!American!domestic!politics,!with!a!great!focus!on!

economics.!This!means!reporting!back!to!the!relevant!ministries,!as!there!are!important!

developments!in!the!Administration,!Congress!or!the!Federal!Reserve.!This!work!is!far!less!

instrumental!and!much!more!“classic!diplomacy”!than!the!work!in!the!Trade!Council.!I!found!

this!part!of!my!job!most!interesting,!as!it!gave!me!a!chance!to!follow!the!(lack!of)!progress!in!

Congress!as!well!as!the!monetary!policy!the!Fed!is!practicing.!This!gave!me!an!inYdepth!

understanding!of!the!US!macro!economy!and!political!system.!!

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My!key!tasks!in!this!department!have!been!to!arrange!visits!for!Danish!politicians!wishing!to!

learn!from!US!policies.!This!meant!extensive!research!on!their!topics!of!interest,!defining!the!

most!interesting!people!to!meet!with!and!setting!up!these!meetings.!This!includes!the!

Committee!on!Housing!and!Urban!Affairs!(who!wanted!to!review!American!student!housing!

policies),!the!Minister!for!Education!(IT!learning!and!preYschool)!as!well!as,!most!

interestingly,!the!Committee!on!European!Affairs!(growth!policies!and!international!trade).!

These!tasks!mainly!included!various!forms!of!research,!defining!the!key!people!to!meet!with!

and!connecting!with!them.!Also!here,!a!key!lesson!has!been!how!to!research!in!a!way!that!can!

be!used!in!practice!and!finds!the!right!people!rather!than!the!right!text.!!

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Before!my!internship,!an!exchange!semester!at!American!University,!also!situated!in!DC,!had!

taught!me!a!lot!about!American!politics!and!economics.!This!knowledge,!as!well!as!my!

knowledge!of!various!think!tanks!in!DC,!was!very!useful!in!my!work!with!the!more!general!

surveillance!of!American!politics.!Approximately!once!or!twice!a!week!I!would!go!to!events!at!

places!like!the!Woodrow!Wilson!Institute,!Brookings!institute!or!Bipartisan!Policy!Center!to!

hear!scholars,!politicians!and!authors!discuss!current!issues!in!American!politics.!I!specifically!

focused!on!trade!policies,!as!that!is!relevant!for!Denmark,!as!well!as!very!high!up!on!the!

President’s!agenda!as!stated!in!his!State!of!the!Union!speech!2013.!These!events!gave!me!a!

key!knowledge!of!the!think!tank!environment!in!DC,!the!stakeholders!and!issues!in!American!

politics!as!well!as!an!inYdepth!knowledge!of!priorities!and!expectations!of!trade!agreements!

that!are!being!negotiated!at!the!moment!(TPP!(Transpacific!Partnership)!and!TTIP).!!

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Considerations$on$the$relevance$of$my$work$for$the$IBP$study$$My!lessons!from!the!two!departments!are!very!different,!because!one!focuses!on!the!US!as!a!

collection!of!specific!markets,!and!another!focuses!on!it!as!a!political!entity.!But!being!from!

the!IBP!program,!I!view!the!microeconomic!and!macroeconomic!side,!and!both!the!business!

and!the!politics!side,!to!be!equally!important!and!that!it!is!important!to!combine!them.!I!had!

several!opportunities!to!combine!businesses!and!politics.!In!a!research!project!for!the!Danish!

company!Roxul,!I!did!a!summary!on!all!regulation!of!insulation!in!buildings,!including!

legislation!that!is!pending!in!congress!and!what!caucus!is!driving!the!legislation.!On!the!other!

hand,!I!used!my!knowledge!of!current!export!policies!as!well!as!an!understanding!of!the!




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global!trade!regime!and!political!economy!of!trade!in!surveying!and!reporting!about!trade!

policies.!The!internship!has!given!me!a!more!thorough!understanding!of!the!practical!

relationship!between!business!and!politics!as!well!as!between!the!macro!and!micro!levels!of!

regulation!and!business.!!

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Transatlantic$trade$relationship$Through!my!internship!I!have!gained!practical!knowledge!of!how!international!trade!is!being!

conducted!in!practice!and!what!challenges!it!poses!to!businesses.!Moreover!I!have!learned!

how!international!trade!policy!is!being!coordinated!by!closely!monitoring!the!process!of!trade!

negotiations!between!the!EU!and!the!US.!In!the!rest!of!this!paper!I!will!go!into!what!

international!trade!means!in!the!global!political!economy,!how!policies!are!coordinated!and!

what!changes!to!the!current!trade!regime!a!transatlantic!agreement!might!cause.!First!off,!I!

will!provide!a!thorough!overview!and!analysis!of!the!TTIP!with!respect!to!content,!goals!and!

challenges.!Then!I!will!go!into!an!analysis!of!the!current!trade!regime!and!what!challenges!it,!

before!I!discuss!my!findings!and!the!answer!to!my!research!question!on!how!regional!trade!

agreements!such!as!the!TTIP!could!change!the!global!trade!regime.!!

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The$Transatlantic$Trade$and$Investment$Partnership$$$In!his!state!of!the!union!speech!2013,!shortly!after!I!started!my!internship,!Obama!launched!

his!intend!to!conclude!two!major!trade!deals!with!the!Pacific!countries!as!well!as!with!EU.!I!

have!followed!the!process!of!the!TTIP!closely,!from!the!speech!to!his!official!letter!of!intent!to!

Congress,!through!the!90Yday!hearing!period,!the!nomination!of!Michael!Froman!to!USTR!and!

until!the!first!round!of!negotiations!in!July.!!

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An!EUYUS!free!trade!agreement!has!been!discussed!several!times!in!the!last!20!years,!but!no!

attempts!to!conclude!an!agreement!has!been!successful.!The!discussion!has!been!kept!alive!in!

academic!and!think!tank!circles,!but!there!hasn’t!been!sufficient!political!action.!Furthermore!

trade!policy!has!not!been!very!high!up!on!the!agenda!in!Obama’s!first!term!as!president.!This!

changes!a!lot!in!his!second!term,!as!he!prioritizes!the!TPP!and!TTIP.!The!US!congress!formally!

has!the!power!to!enter!into!agreements!on!trade.!However!the!way!it!is!usually!conducted!is!




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that!they!give!a!Trade!Promotion!Authority!(TPA)!to!the!president,!thereby!giving!him!a!

specific!mandate!to!negotiate!trade!agreements!on!their!behalf.!If!the!President!has!TPA,!

Congress!can!only!vote!yes!or!no!to!the!agreement!but!not!make!any!alterations!once!it!is!

negotiated,!which!makes!it!easier!to!conclude!an!agreement!with!other!parties!when!they!

know!there!will!not!be!a!second!round!of!negotiations!in!DC.!However,!congress!is!currently!

in!a!stalemate!where!the!two!houses!bloc!each!other,!and!the!administration!only!has!limited!

ressources!to!get!things!through!congress!(Committee!on!European!Affairs!2013).!Therefore!

the!TPA!has!not!been!renewed!for!years.!Even!though!trade!negotiations!are!going!on,!it!is!

unlikely!that!they!can!be!concluded!before!a!new!TPA!is!passed.!On!the!European!side,!the!

Commission!has!been!given!a!mandate!to!negotiate!from!the!Council,!and!the!Parliament!has!

adopted!a!nonYbinding!paper!of!their!opinion!of!the!negotiation.!After!negotiations!the!final!

agreement!has!to!pass!in!the!council!as!well!as!the!parliament,!and!then!go!on!to!be!ratified!in!

the!member!countries!(European!Commission!2013).!!

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US!and!EU!leaders!met!in!November!2011!to!discuss!the!possibilities!of!further!strengthening!

jobs!and!growth!opportunities!though!trade.!A!working!group!called!High!Level!Working!

Group!on!Jobs!and!Growth!(HLWG)!was!established!with!the!aim!of!identifying!“policies!and!

measures!to!support!mutually!beneficial!job!creation,!economic!growth!and!international!

competitiveness”!(HLWG!2013).!With!the!aim!of!reaching!a!comprehensive!agreement,!

negotiations!have!started!in!July.!These!are!set!up!with!different!working!groups!split!into!

specific!aspects,!trying!to!reach!agreements!on!the!specifics.!While!political!support!is!high,!

there!are!still!a!lot!of!obstacles!to!overcome.!I!will!use!the!HLWG!final!report!to!analyze!the!

content!of!the!TTIP!negotiations!and!how!these!differ!from!standard!trade!agreements!and!

the!WTO!regime.!!

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After!thoroughly!analyzing!the!trade!relationship!between!the!two!regions!and!interviewing!a!

wide!ranger!of!stakeholders,!the!HLWG!concluded!that!negotiations!of!a!bilateral!agreement!

between!the!regions!should!be!issued.!Their!recommendation!is!that!the!agreement!should!be!

comprehensive,$address$all$trade$barriers$including$regulatory$issues,$and$contribute$to$the$

development$of$global$rules.$$

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Comprehensiveness$of$a$possible$agreement$A!comprehensive!agreement!means!“everything!is!on!the!table”,!meaning!no!sectors!or!

barriers!are!excluded.!This!means!the!potential!will!be!fully!exploited.!While!the!

recommendations!from!the!HLWG!do!leave!some!room!for!excluding!particularly!sensitive!

sectors,!they!do!urge!lawmakers!to!“consider!options!for!the!most!sensitive!products”!(HLWG!

2013).!The!HLWG!states!that!a!comprehensive!agreement!would!be!an!ambitious!farYreaching!

agreement!giving!reciprocal!market!access!in!not!only!goods!market,!but!also!services!and!

investment!markets.!In!their!definition!of!a!comprehensive!agreement!lies!also!the!idea!that!it!

should!address!modernizing!trade!rules!and!regulatory!trade!barriers,!which!we!will!get!back!

to.!First!of!all!they!propose!that!free!trade!should!not!only!be!applied!to!goodsYmarkets!but!

also!to!services,!investments!and!public!procurement.!!

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Reciprocal!market!access!through!the!elimination!of!tariffs!as!soon!as!possible!is!the!core!

element!of!any!agreement.!Although!tariffs!are!already!relatively!low!between!the!two!

regions,!the!sheer!volume!of!trade!makes!it!very!valuable.!The!economic!effects!would!be!

enormous!for!both!parties!(Committee!on!Ways!and!Means!2013)!by!increasing!exports.!!

Furthermore!trade!facilitation!is!a!large!burden!on!small!and!mediumYsized!enterprises,!

possibly!keeping!them!from!exporting!at!all.!The!representative!from!Business!Coalition!for!

Transatlantic!Trade,!Slater,!suggests!in!the!congressional!hearing!May!16th!that!these!barriers!

should!be!replaced!with!a!common!set!of!standards!for!security!screenings!and!a!single!unit!

collecting!information!regarding!transport!of!goods.!!

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Trade!in!services!accounts!for!36!%!of!the!transatlantic!trade.!Included!in!services!are!

accounting,!bank!services,!entertainment,!insurance,!computer!related!services,!logistics,!

transport!and!teleYcommunication!(Committee!on!Ways!and!Means!2013).!The!HLWG!

suggests!liberalizing!the!services!sectors!to!the!highest!extend!possible,!concretely!by!looking!

at!trade!agreements!the!parties!have!made!recently!with!other!nations!and!making!the!level!

of!these!agreements!count!for!the!TTIP!as!well.!Both!the!US!and!EU!have!recently!made!trade!

agreements!with!South!Korea,!which!would!serve!as!a!stepping!stone!to!release!the!potential!

of!liberalizing!services!between!the!two!giant!economies!(Woodrow!Wilson!Center!2013).!

Especially!crossYcountry!data!flows,!information!technology!and!scientific!research!is!an!area!

where!the!potential!for!increased!trade!is!big.!According!to!Slater,!liberalizing!trade!in!these!




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services!wouldn’t!only!increase!trade!but!also!increase!productivity!in!sectors!depending!on!

these!services.!(Committee!on!Ways!and!Means!2013)!Furthermore!the!HLWG!recommend!

that!the!agreement!includes!binding!commitment!to!transparency!regarding!licensing!

procedures!of!service!providers!(HLWG!2013).!Slater!goes!even!further!and!suggest!100!%!

liberalized!work!force!mobility,!meaning!there!shouldn’t!be!any!geographical!discrimination!

when!it!comes!to!licensing!service!providers!(Committee!on!Ways!and!Means!2013).!

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Investment!between!EU!and!US!constitutes!even!larger!flows!than!trade,!making!it!especially!

important!part!of!the!agreement!in!terms!of!increasing!the!value!of!it!(Committee!on!Ways!

and!Means!2013).!Especially!because!increased!investments!will!create!jobs!and!spur!growth.!

The!HLWG!recommends!the!agreement!includes!investment!liberalization!and!high!standards!

of!investment!protection!(HLWG!2013).!!

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The!aim!of!including!all!sectors!in!the!negotiations!is!a!challenge.!On!the!European!side,!

especially!the!French!are!not!as!keen!to!accepting!free!trade!as!the!rest!of!Europe!may!be.!

Already!before!the!formal!negotiations!started,!they!managed!to!get!an!exception!through!for!

the!French!film!industry,!which!is!very!trade!protected.!While!the!area!in!itself!is!not!the!

largest!factor!for!the!comprehensiveness!of!the!agreement,!there!is!fear!that!it!might!lead!to!

other!areas!being!excluded!as!well!even!before!the!specific!terms!of!a!market!opening!have!

been!discussed!(European!Institute!2013).!!

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One!of!the!biggest!issues!is!the!food/agricultural!sector.!First!of!all,!this!is!a!sector!where!both!

parties!have!a!tradition!for!high!subsidies!as!well!as!other!price!mechanism!protectionist!

measures!that!it!has!previously!proved!to!be!hard!to!get!rid!of.!A!strong!agricultural!sector’s!

political!influence!as!well!as!the!fear!of!losing!domestic!jobs!in!this!sector!makes!this!an!area!

where!there!is!little!hope!of!a!result!turning!it!into!100!%!free!trade.!Because!the!agricultural!

area!poses!hard!political!struggles!at!home,!none!of!the!parties!are!interested!in!the!fight!over!

subsidies.!Furthermore!the!American!side!is!already!decreasing!subsidies!(Nunes!2013),!

while!the!Europeans!are!limiting!the!CAP!to!support!that!isn’t!tradeYdisturbing!(Brookings!

2013).!Instead!an!option!could!be!to!work!on!the!barrier!of!geographical!markings,!which!

makes!products!such!as!Parmesan!and!Champagne!very!limited!to!a!few!(European)!

producers,!as!well!as!other!SPSYrelated!regulatory!barriers!(European!Institute!2013).!!




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As!the!HLWG!recommends!that!an!agreement!is!as!comprehensive!as!possible,!it!is!very!

uncertain!whether!there!is!political!will!in!both!Congress!and!the!28!countries!in!EU!to!go!

very!far!on!areas!that!are!charged!with!cultural!values!or!could!endanger!domestic!jobs.!

Among!the!negotiators!though!there!is!definitely!positive!signals.!The!European!Daniel!

Caspary,!member!of!the!European!Parliament!committee!on!trade,!states!that!“Europeans!

don’t!believe!in!the!figures!or!that!they!will!have!a!part!in!it.!And!people!who!have!a!job!will!

not!think!that!it!is!what!is!important.!Internet!makes!it!difficult!to!control!message,!but!we!

must!try!t!find!the!best!way!to!convince!the!public.!Many!people!don’t!understand!what!the!

gains!are.”!(European!Institute!2013)!The!US!Trade!Representative!Michael!Froman!makes!it!

clear!in!his!confirmation!hearing!in!the!Senate!that!he!would!work!for!a!comprehensive!

agreement!and!that!he!would!prefer!no!deal!to!one!that!doesn’t!go!far!enough!(US!Senate!

Committee!on!Finance!2013).!!

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Regulatory$trade$barriers$$In!classical!economic!theory!literature,!a!sack!of!corn!or!a!bottle!of!wine!usually!exemplifies!

free!trade!and!internationalization!of!markets.!It!is!elegantly!demonstrated!how!an!import!

quota!or!a!tariff!will!harm!aggregate!economic!output,!and!how!an!abolition!of!these!will!lead!

to!mutual!gains.!However,!the!trade!barriers!of!today!are!much!more!complex!than!a!simple!

fee!(Ravenhill!2011).!!

!

NonYtariff!barriers!are!more!important!than!tariff!barriers!and!quotas!today.!These!issues!will!

be!addressed!in!future!trade!agreements,!and!be!the!biggest!part!of!the!TTIP!negotiations,!but!

also!the!toughest!part,!because!it!involves!domestic!political!issues.!It!is!a!game!of!high!stakes,!

high!reward!(Brookings!2013).!!

!

TBT,!or!Technical!Barriers!to!Trade,!refers!to!technical!regulation!and!product!standards.!

These!are!usually!implemented!to!increase!safety!of!the!products!in!relation!to!human!health,!

animal!safety!or!the!environment.!However!these!can!also!be!used!actively!by!politicians!to!

protect!domestic!industries!from!outside!producers,!whose!products!do!not!live!up!to!the!

standard.!This!is!illegal!in!the!WTO!TBTYchapter.!But!an!important!part!of!the!TTIP!




!

! 11!

negotiation!is!to!focus!on!the!ones!that!are!still!in!place,!merely!because!there!is!no!dialogue!

between!legislators!of!the!two!regions.!This!causes!regulation!to!diverge!although!often!with!

the!same!goals!in!sight,!creating!an!unnecessary!and!unintentional!trade!barrier!(Committee!

on!Ways!and!Means!2013).!!

!

The!HLWG!suggests!regulatory!barriers!be!dealt!with!by!greater!compatibility,!including!

harmonization!and!mutual!recognition!where!possible!and!increased!cooperation!on!future!

regulations!and!standards!(HLWG!2013).!In!the!negotiations!following!the!working!group,!

this!has!been!concretized!by!the!suggested!Horizontal!Chapter!on!Regulatory!Coherence.!This!

suggests!establishing!a!Regulatory!Cooperation!Council!where!the!regulators!from!both!

parties!can!meet!on!relevant!subject!areas.!In!the!proposed!framework,!both!parties!are!

obligated!to!notify!the!other!of!upcoming!legislation,!as!well!as!perform!an!impact!assessment!

of!legislation!on!international!trade!in!general!and!transatlantic!trade!in!particular!(TTIP!

position!paper!2013).!!!

!

Sanitary!and!Phytosanitary!(SPS)!rules!refer!to!the!regulations!and!standards!of!the!food!

industry,!and!an!important!part!of!the!negotiations!on!the!TTIP.!The!European!precautionaryY

principle!and!unwillingness!to!use!GMO!products!are!a!thorn!in!the!eye!of!American!

producers.!Rather,!they!will!push!for!scienceYbased!standards.!On!the!other!hand,!Europeans!

are!unwilling!to!import!hormoneYtreated!beef!or!chicken!that!has!been!treated!with!chlorine!

to!avoid!salmonella!(Committee!on!European!Affairs!2013).!The!HLWG!suggests!a!chapter!on!

SPSYmeasures!in!the!agreement!based!on!“scientific!risk!assessments”.!These!will!be!hard!to!

reach!an!agreement!on!because!the!European!precautionary!principle!is!not!instituted!as!a!

trade!barrier!but!reflect!actual!differences!in!political!preferences!(Committee!on!European!

Affairs!2013).!While!the!HLWG!does!leave!room!for!some!exceptions!where!rules!reflect!

political!differences,!there!is!still!a!big!push!from!American!producers!to!get!into!the!

European!market.!However!these!issues!are!very!culturally!charged!and!could!harm!the!

overall!support!for!a!deal,!if!they!are!picked!up!by!the!media!and!framed!as!the!“chlorine!

chicken!agreement”.!This!is!what!has!happened!before!and!might!lead!negotiators!to!leave!

this!out!of!the!agreement!(Committee!on!European!Affairs!2013).!!

!




!

! 12!

Development$of$global$rules$$The!HLWG!have!worked!out!a!set!of!recommendations!on!how!to!make!the!TTIP!of!global!

importance!rather!than!just!local.!These!include!intellectual!property!rights!and!environment!

and!labor!protection,!which!are!areas!where!both!the!EU!and!US!have!higher!standards!than!

many!emerging!economies.!Other!areas!that!represents!shared!interests!in!global!trade!are!

concerns!over!competitionYobscuring!policies!such!as!stateYowned!enterprises!and!export!

restrictions!on!raw!materials.!Here!the!HLWG!suggests!that!the!TTIP!should!address!these!

issues!even!though!they!are!mostly!concerning!parties!that!do!not!participate!in!the!

negotiations,!so!the!US!and!EU!could!stand!together!in!multilateral!negotiations!(HLWG!

2013).!!

!

As!the!eastern!economies!are!emerging!as!economic!and!political!powers,!the!transatlantic!

relationship!becomes!more!important!as!a!geopolitical!factor.!If!western!economies,!and!

especially!the!US,!are!going!to!be!the!hegemon!in!the!future,!it!is!important!to!be!the!one!

setting!the!terms!in!the!world!economy.!!If!the!TTIP!is!realized,!the!trade!zone!would!account!

for!40!%!of!world!GDP,!making!it!an!enormous!economic!power!(Boskin!2013).!This!market!

power!enables!western!countries!to!be!setting!the!standards!for!products!and!services!that!

eastern!countries!would!be!forced!to!follow.!For!example!food!quality!standards!or!other!

product!quality!standards!would!have!to!be!followed!by!the!eastern!producers!as!well,!if!they!

wanted!to!export!to!the!entire!world.!Apart!from!setting!the!standards!for!products!–!which!

could!also!include!labor!rights!and!human!rights!related!to!the!production!–!the!market!power!

of!such!a!large!economic!partnership!could!also!apply!political!pressure!to!emerging!

economies.!The!transatlantic!relationship!in!the!TTIP!could!become!very!political,!stretching!

into!areas!such!as!development!policies!and!climate!change!mitigation.!(Committee!on!

European!Affairs!2013).!!

!

Trade$theory$Liberal!economic!theory!of!international!trade!focuses!on!the!gains!of!trade:!when!two!

countries!trade!with!each!other,!they!both!benefit.!The!historical!discussion!in!the!field!of!

economics!is!focused!on!whether!these!gains!are!only!possible!when!a!country!is!better!at!

producing!something!in!an!absolute!sense,!or!also!in!a!comparative!sense.!Today,!the!majority!




!

! 13!

of!economists!agree!on!liberal!trade!theory!stating!that!gains!from!trade!comes!from!

comparative!advantages,!which!is!the!theory!originally!developed!by!the!political!economist!

Ricardo!(O’Brien!and!Williams!2010).!!

!

Liberal!trade!theory!sees!international!trade!as!a!positiveYsum!game,!where!comparative!

rather!than!absolute!advantages!determine!what!countries!trade!in.!This!means!all!countries!

can!gain!from!trade,!even!if!they!don’t!have!absolute!advantages,!but!have!a!comparative!

advantage!in!a!specific!industry!compared!to!their!trading!partner.!Liberal!trade!theory!is!

therefore!prescriptive!of!two!policies:!that!countries!should!specialize!in!the!industries!where!

they!hold!comparative!advantages,!as!this!will!increase!their!profit!from!trade.!Furthermore,!

liberal!trade!theory!suggests!that!trade!should!be!free:!if!everyone!gains!from!trade,!there!are!

no!arguments!as!to!why!it!should!be!restricted!politically!(O’Brien!and!Williams!2010).!

!

Even!though!many!economists!agree!with!the!comparative!advantage!theory!of!gains!from!

trade,!there!are!other!issues!that!divide!economists!on!the!issue!of!trade.!This!is!especially!in!

explaining!why!and!how!these!comparative!advantages!appear,!and!how!countries!may!use!

some!trade!restriction!to!increase!their!comparative!advantage!before!opening!up.!

Furthermore,!there!is!a!lot!of!discussions!on!the!redistributive!effects!of!trade,!which!is!

especially!true!amongst!political!economists.!These!discussions!of!international!trade!theory!

is!formulated!by!stateYcentered!and!radical!critiques!of!liberal!trade!theory!(O’Brien!and!

Williams!2010).!!

!

International$trade$Historically,!the!ability!to!demand!tariffs!has!been!a!large!part!of!the!financing!of!states!and!

therefore!important!for!stateYbuilding!(Ravenhill!2011).!The!need!for!financing!explains!how!

tariffs!emerged!and!partly!why!they!are!still!here.!The!trade!restrictions!was!furthermore!in!

the!interest!of!the!commercial!class,!who!could!increase!profits!by!limiting!competition.!This!

was!the!critique!of!trade!restrictions!by!the!political!economist!Adam!Smith,!who!favored!free!

trade!as!he!saw!increased!competition!as!beneficial!for!the!society!as!a!whole!(Ravenhill!

2011).!!

!




!

! 14!

Over!time,!the!purpose!of!trade!restrictions!have!changed.!The!fear!for!globalization!and!

international!trade!is!that!the!process!of!specializing!a!country!will!mean!that!industries!and!

thereby!jobs!will!be!transferred!out!of!the!country!(GPE).!This!means!politicians!is!under!

pressure!from!interest!groups!such!as!labor!unions!or!industry!lobbyists!to!keep!trade!

protections!high.!Liberal!economists!would!argue!that!the!concerns!for!loss!of!jobs!would!be!

outweighed!by!the!growth!in!output!and!the!increased!production!in!exporting!industries.!

Therefore!the!joblessness!would!be!a!temporary!phase,!as!the!workforce!is!being!transferred!

into!other!parts!of!the!production.!However,!for!the!people!who!are!affected,!the!experience!is!

very!real,!and!the!transition!into!another!industry!may!not!be!so!easy.!Therefore!economic!

nationalists!and!other!trade!critics!argue!that!trade!liberalization!followed!by!increased!

outsourcing!and!specialization!will!come!at!some!social!costs.!(the!question!is!whether!or!not!

these!are!outweighed!by!economic!gains).!However!the!liberal!school!of!thought!is!most!

dominant!within!economic!scholars!of!trade!(O’Brien!and!Williams!2010).!

$

A!quick!look!at!reality!shows!very!clearly!how!policy!makers!have!made!the!decision!to!not!

follow!economic!theory!in!this!aspect.!While!international!trade!is!increasing,!it!is!still!very!

restricted!and!has!historically!been!very!controlled!by!the!state.!The!arguments!for!

protectionism!via!trade!barriers!are!various,!but!the!political!aim!is!to!support!and!protect!

domestic!jobs,!as!well!as!secure!income!to!the!state!via!tariffs!(especially!historically!

speaking).!Although!liberal!economists!argue!that!protectionism!is!costly!for!all!countries,!

states!continue!to!use!tariffs,!import!quotas!and!subsidies!to!raise!the!cost!of!imports!and!

protect!domestic!production!(O’Brien!and!Williams!2010).!

!

Global$policy$coordination$A!reason!that!trade!isn’t!free!is!that!it!is!very!hard!to!move!from!a!system!of!protections!to!a!

free!trade!system.!Known!as!the!free!rider!problem,!countries!have!an!incentive!to!have!other!

countries!lower!their!protectionism!while!keeping!their!own!protectionism!high.!In!that!case!

their!goods!would!have!access!to!new!markets,!thus!increasing!exports,!but!their!imports!

would!remain!the!same!and!thereby!not!increase!domestic!competition.!Therefore!

institutions!are!needed!to!assure!reciprocity.!Different!institutional!frameworks!and!




!

! 15!

agreements!on!international!trade!are!what!have!constituted!the!different!international!trade!

regimes!(Henning!2012).!!

!

Regime!theory!states!that!even!as!states!are!the!primary!actors!in!the!international!arena,!

they!are!constrained!by!certain!rules.!Therefore!international!economic!relations!aren’t!

shaped!exclusively!by!states,!but!also!by!the!network!of!international!organizations!and!

international!law.!Regimes!are!“the!principles,!norms,!rules!and!decisionYmaking!procedures!

around!wich!actor!expectations!converge!on!a!given!issue!area”,!in!the!definition!by!Krasner!

(Bayne!and!Woolcock!2011).!!

!

In!the!sense!of!international!trade!regimes,!this!translates!into!the!principles!and!norms!of!

how!free!or!regulated!trade!is,!the!rules!of!international!trade!law!and!international!

agreements!and!the!way!in!which!trade!agreements!are!negotiated.!!

!

The$contemporary$trade$regime$$With!the!purpose!of!increasing!trade!through!decreasing!tariffs,!the!General!Agreement!on!

Tariffs!and!Trade!(GATT)!was!established!shortly!after!WWII.!In!the!postYwar!international!

climate!the!AngloYAmerican!allies!who!had!won!the!war!were!able!to!negotiate!an!economic!

system!to!their!benefit!(O’Brien!and!Williams!2010).!!

!

The!system!that!emerged!was!not!entirely!a!step!into!liberalized!world!trade,!as!the!GATT!did!

not!go!so!far!as!to!create!a!free!international!market.!USA!proposed!a!system!that!was!nonY

discriminatory!and!multilateral!way!of!handling!international!trade!and!payments.!The!

objective!was!a!trade!regime!that!sought!to!decrease!the!obstacles!to!trade!through!decreased!

tariffs!and!supervision!of!exchange!rates!to!avoid!trade!distortion!through!exchange!rate!

manipulation.!The!primary!characteristic!of!this!regime!is!that!it!is!a!rulesYbased!system!of!

international!agreements!and!continued!multilateral!negotiations.!The!regime!is!based!on!the!

following!principles:!!

Y NonYdiscrimination:!the!same!tariff!rates!and!trade!restrictions!that!apply!to!one!country!

within!the!agreement!must!apply!to!all.!This!is!also!called!the!Most!Favoured!Nation!

principle.!!




!

! 16!

Y Multilateralism:!the!objective!to!engage!as!many!states!as!possible!in!international!

negotiations!on!trade!liberalization!and!ensure!a!rulesYbased!multilateral!system!of!

international!trade.!!

Y Reciprocity:!tariff!reductions!between!countries!are!equal.!This!makes!tariff!reductions!

cumulative.!!

Y Transparency:!making!sure!that!all!trade!restrictions!are!clearly!visible!e.g.!by!replacing!

quantitative!trade!restrictions!and!other!nonYtariff!barriers!with!tariffs.!(GPE!165)!

In!the!time!GATT!has!been!in!effect,!it!has!been!very!effective!in!liberalizing!world!trade.!Not!

least!because!the!agreements!made!sure!that!once!tariffs!were!lowered,!they!could!not!be!reY

introduced.!It!has!also!lead!to!a!large!increase!in!world!trade:!world!trade!amounted!to!4!

times!the!volume!in!2007!as!it!had!in!1945.!Since!GDP!doubled!in!that!time,!trade!has!

consistently!been!growing!faster!than!output,!until!slowing!down!during!the!financial!crisis.!

(O’Brien!and!Williams!2010).!GATT!has!furthermore!been!successful!in!the!sense!that!more!

and!more!countries!have!participated!in!the!multilateral!negotiations.!However!the!GATT!

proved!insufficient!in!the!goal!of!transparency,!since!countries!started!using!nonYtariff!

barriers!to!trade!increasingly!during!the!1970’s.!Furthermore!it!disappointed!as!it!could!not!

ensure!evenness!in!tariff!reductions!between!industries!(O’Brien!and!Williams!2010).!!

!

The!regime!that!was!formed!by!GATT!is!one!of!“embedded!liberalism”!in!the!definition!by!

Ruggie!(Ruggie!1982).!This!means!that!rather!than!setting!up!a!laissez!faire!free!market!that!is!

embedded!from!the!state,!international!trade!is!managed!by!states!through!international!

organizations,!and!governed!by!the!principles!described!above.!!

!

These!principles!are!still!governing!the!trade!regime!today,!although!the!regime!has!

developed!into!an!actual!organization.!The!World!Trade!Organization!was!formed!at!the!

Uruguay!negotiation!round.!The!WTO!is!not!only!a!permanent!organization,!and!thereby!more!

formal!than!GATT,!but!also!introduces!a!broader!scope!to!trade!negotiations.!The!WTO!

basically!consists!of!the!GATTYagreement!as!well!as!a!range!of!other!agreements!on!trade!

policy.!However!the!WTO!represents!a!more!formal!version!of!the!trade!regime!as!well!as!a!

shift!towards!focus!on!domestic!policies!as!barriers!to!trade!rather!than!just!tariffs.!Domestic!

regulations!and!institutional!practices!became!a!focus!of!trade!policy,!as!well!as!services!and!

intellectual!property!rights,!thereby!transforming!the!management!and!scope!of!world!ttrade!




!

! 17!

policy!(O’Brien!and!Williams!2010).!By!expanding!the!scope!of!operations!and!strengthening!

procedures!for!decision!making,!but!keeping!to!the!same!principles,!the!WTO!can!be!seen!as!a!

strengthening!of!the!trade!regime!by!giving!the!regime!increased!power!over!actors.!!

$

The$current$state$of$the$trade$regime$These!agreements,!and!the!organization!that!it!turned!into,!have!been!very!successful!in!

decreasing!barriers!to!trade,!and!since!it!has!been!in!existence,!international!trade!has!been!

increasing.!However,!the!WTO!negotiations!have!been!stalled!for!years,!because!of!disputes!

between!developing!countries!and!developed!countries.!The!DohaYround!negotiations!that!

started!in!2002!have!not!yet!been!finalized!(although!a!minor!agreement!on!trade!facilitation!

was!reached!in!Bali!2013!(Economist!2013)).!This!means!that!there!isn’t!any!progress!in!

global!trade!liberalization!in!the!official!forum!where!it!is!supposed!to!be!handled.!!

!

The!WTO!is!facing!three!challenges!that!explain!the!troubles!of!the!Doha!round.!First!off,!and!

probably!most!importantly,!there!are!a!large!gap!between!interests!of!developed!and!

developing!countries!that!it!has!not!been!able!to!bridge!in!the!negotiations.!Secondly,!the!

organization!faces!an!issue!of!legitimacy!of!trade!agreements!in!the!face!of!other!challenges!to!

the!global!political!economy!such!as!the!environmental!and!social!costs!of!trade.!Last!but!not!

least!it!faces!a!tendency!of!regional!trade!agreements!“stealing!the!picture”!and!becoming!the!

primary!forum!where!trade!negotiations!are!held!(O’Brien!and!Williams!2010).!!I!will!go!on!to!

discuss!the!TTIP!in!the!face!of!this!development!towards!regionalism.!I!will!not!be!discussing!

the!other!challenges!facing!the!regime!beyond!assuming!that!they!will!make!it!very!difficult!to!

reach!multilateral!trade!agreements!to!the!same!degree!as!has!been!done!in!the!past.!!

!

Regionalism,!the!tendency!of!states!negotiating!their!own!regional!free!trade!agreements,!has!

been!increasing!during!the!last!two!decades.!The!share!of!global!trade!that!takes!place!within!

regional!trade!agreements!now!accounts!for!half!of!world!trade.!They!take!different!forms!

such!as!free!market!areas,!custom!unions,!common!market!or!economic!union,!depending!on!

how!far!reaching!the!integration!is!(Ravenhill!2011).!!

!




!

! 18!

One!theory!that!explains!regionalism!is!that!the!stalled!WTO!negotiations!push!the!agenda!for!

trade!liberalization!into!other!forums,!where!it!is!easier!to!get!an!agreement.!ForumYshifting!

as!a!strategy!means!countries!negotiate!trade!agreements!bilaterally!to!a!larger!extent!(Bayne!

and!Woolcock!2011).!As!the!international!organization!fails!to!carry!the!progress!in!trade!

liberalization,!the!US!has!taken!that!role!upon!itself!instead,!and!has!now!launched!two!major!

multilateral!trade!negotiations,!that!could!fundamentally!alter!the!world!trade!system:!the!

TPP!and!the!TTIP.!Other!reasons!to!prefer!regionalism!to!multilateralism!are!the!aims!of!

comprehensiveness!and!ambition.!In!a!regional!agreement!with!countries!that!share!more!

similarities,!it!might!be!easier!to!achieve!deeper!integration,!by!including!issues!such!as!

investment,!labor!protection!and!environment.!!

! !

While!multilateral!free!trade!is!assessed!by!economists!to!increase!the!welfare!of!the!

economy,!regional!trade!agreements!might!harm!the!global!economy!by!diverging!trade!

(favoring!regional!more!expensive!producers!over!cheaper!ones!outside!the!region)!and!

distorting!the!allocation!of!resources!(Ravenhill!2011).!However!countries!might!not!have!the!

choice!between!a!global!and!a!regional!agreement.!This!makes!regionalism!preferred!to!status!

quo,!if!some!liberalization!can!give!some!economic!gains!(Ravenhill!2011).!In!the!case!of!the!

TTIP,!the!favoring!of!a!regional!agreement!makes!even!more!sense!in!this!scenario,!as!EU!and!

US!both!represent!important!markets!for!each!other,!increasing!the!potential!gains.!!

!

Discussion:$how$can$regionalism$and$the$TTIP$change$the$trade$regime?$$With!regionalism!on!the!rise,!the!trade!regime!might!have!to!adjust!to!this!development.!In!

contrast!to!the!two!other!challenges!to!the!regime,!regionalism!is!actively!changing!the!legal!

and!institutional!framework!in!which!trade!is!being!conducted,!and!increasing!the!

liberalization!of!trade.!The!two!other!challenges!to!the!regime!are!stalling!the!liberalization!or!

directly!trying!to!revoke!it.!Therefore!regionalization!can!be!seen!as!both!a!“stepping!stone”!or!

a!“stumbling!block”!to!the!current!regime!(Ravenhill!2011).!!

!

If!regionalism!should!act!as!a!way!to!get!multilateral!negotiations!going!again,!it!might!be!

because!regional!groupings!could!be!the!new!actors.!With!fewer!actors,!it!might!be!easier!to!




!

! 19!

achieve!an!agreement!(Ravenhill!2011).!On!the!other!hand,!it!might!be!harder,!if!these!

groupings!represent!similar!interests!between!countries.!For!example!if!a!transatlantic!

grouping!and!a!group!of!developing!countries!were!to!make!a!trade!agreement,!the!problem!

of!differences!in!interests!will!be!sustained!and!might!be!harder!than!ever!to!get!through,!if!

the!groupings!make!countries!focus!on!the!differences!between!regions.!!

!

Regional!agreements!might!be!an!easier!way!to!increase!the!depth!of!integration!and!include!

more!issues!into!trade!talks.!If!some!countries!already!agree!on!these,!then!it!might!make!it!

easier!to!include!other!countries!in!the!agreement!and!thereby!have!it!serve!as!a!model!for!an!

international!deal!(Ravenhill!2011).!This!might!apply!to!the!transatlantic!talks,!because!some!

the!HLWG!hope!that!a!deal!on!IPR!and!environmental!standards!could!become!global!

standards!(HLWG!2013).!One!argument!being!carried!forward!at!various!think!tank!events!is!

that!if!TTIP!is!implemented!and!such!a!big!part!of!the!world!economy!only!trade!with!

products!that!live!up!to!certain!environmental,!IPR!or!social!standards,!then!China!and!other!

emerging!markets!relying!on!exports!will!be!forced!to!follow!those!same!rules.!While!that!

might!be!the!case,!it!does!offer!some!challenge!to!the!principle!of!multilateralism!and!the!aim!

of!including!everyone!in!negotiations.!From!a!political!economy!perspective,!while!there!

might!be!arguments!for!the!need!of!someone!enforcing!rules!on!these!areas,!there!is!definitely!

also!a!point!to!make!about!the!transatlantic!region!forcing!everyone!else!to!play!by!their!rules.!

This!could!be!related!to!a!historical!perspective!of!imperialism!as!well!as!the!US!as!a!hegemon!

in!international!relations.!But!it!could!also,!in!practice,!increase!the!gap!between!developed!

and!developing!countries’!position!in!multilateral!negotiations,!making!it!even!harder!to!

conclude!them!(Ravenhill!2011).!!!

!

What!some!hope!might!be!the!case!with!regionalism!is!to!achieve!a!domino!effect!(Ravenhill!

2011),!making!other!countries!join!in!on!the!deal!or!make!similar!deals!with!the!same!parties.!

This!could!very!well!be!the!case!if!increased!transatlantic!trade!comes!at!the!expense!of!

trading!partners!outside!the!TTIP!(Boskin!2013).!If!it!becomes!a!model!open!to!other!

countries,!this!could!be!increasing!trade!liberalization,!and!the!pace!of!it,!significantly.!Former!

USTR!Carla!Hills!believe!this!could!be!the!case!(Boskin!2013).!Although!the!large!

disagreements!with!developing!countries!probably!means!they!won’t!be!joining!the!TTIP!very!

soon,!this!scenario!does!seem!like!the!most!likely!for!the!TTIP!to!be!increasing!world!trade.!!




!

! 20!

!

The!TTIP!talks!are!a!prime!example!of!regionalism,!but!this!time!it!is!very!different!from!the!

hundreds!of!other!examples.!The!size!and!scope!of!the!negotiations!differentiates!it!from!

other!bilateral!agreements.!The!EUYUS!relationship!has!been!the!core!of!the!multilateral!trade!

policy!system!(Winham!in!Ravenhill!2011),!so!when!they!opt!out!to!create!a!system!on!their!

own!terms,!it!has!a!bigger!impact!on!the!regime!than!when!countries!that!play!a!less!

significant!political!role!do!so.!Furthermore!the!size!of!the!economies!is!large!enough!to!be!of!

significance!to!the!entire!world!trade!system.!A!third!reason!it!is!different!is!that!the!

negotiators!make!it!out!to!the!beginning!to!have!a!goal!of!impacting!the!global!trade!rules,!not!

just!create!a!free!trade!zone!amongst!themselves.!!

$

Even!though!the!WTO!have!proved!unable!to!conclude!the!Doha!round,!it!might!not!be!over!

for!multilateral!negotiations.!It!is!usually!more!efficient!to!negotiate!a!single!agreement!than!

to!have!a!series!of!negotiations!with!single!states.!The!latter!is!more!resourceYdemanding!and!

decreases!the!opportunity!of!reaching!a!deal!everyone!can!be!satisfied!with!(Ravenhill!2011).!

However!there!is!reason!to!believe!that!economies!reach!regional!trade!agreement!not!for!the!

purpose!of!free!trade,!but!more!to!reach!a!political!objective!(Ravenhill!2011).!This!could!be!

very!true!in!the!case!of!the!TTIP,!where!geopolitical!advantages!by!teaming!up!against!the!

emerging!markets!in!the!east!and!thereby!securing!a!western!hegemony!is!frequently!

mentioned!as!an!argument!for!the!TTIP,!just!as!much!as!job!creation.!!

Conclusion$$The!TTIP!does!come!with!a!promise!of!a!new!era!of!trade!liberalization.!However!there!still!a!

lot!of!obstacles!to!overcome.!If!the!most!serious!attempt!at!negotiating!a!transatlantic!deal!to!

date!fails,!it!will!be!hard!to!see!regionalism!on!a!large!and!ambitious!scale!as!the!future!path!of!

trade!liberalization.!Even!to!get!the!28!countries!in!the!EU!as!well!as!a!very!divided!congress!

to!seal!this!deal!is!a!lot!to!overcome.!Even!if!this!happens!and!other!countries!want!to!join!in,!

for!example!by!starting!to!harmonize!NAFTA!and!TTIP,!this!would!mean!an!end!to!the!

multilateral!regime!and!replacing!the!institutions!where!trade!talks!are!done.!If!the!TTIP!leads!

to!an!increase!in!plurilateral!negotiations,!where!trade!talks!are!still!conducted!in!the!WTO!

but!with!regions!rather!than!single!countries!as!the!actors,!then!that!is!a!significant!change!in!

the!trade!regime!as!well.!Thereby!the!TTIP!negotiations!represent!a!historic!shift!in!how!




!

! 21!

global!trade!policy!is!coordinated,!at!any!outcome:!a!failure!would!decrease!the!hope!of!a!new!

era!of!trade!liberalization,!and!a!success!would!change!the!multilateral!system!by!changing!

institutional!structure!or!process!of!negotiations.!!

!

! !




!

! 22!

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