Global Macro Service > Research Briefings > Europe
After three years of negotiations, the TTIP talks seem to have hit a brick wall. French and German politicians are already in campaigning mode, responding to a popular backlash against free trade with calls to suspend the negotiations. Ahead of the informal meeting of the EU trade ministers in Bratislava on 23 September, we take stock of the negotiations so far and examine the progress made on the most contentious issues.
TTIP has been under negotiation since July 2013. At the onset of the talks, the transatlantic partners aimed to complete the deal before President Obama left office. However, with very limited progress thus far, it now seems impossible to meet this deadline.
The disagreements over TTIP stem from differing approaches to regulation. Unlike the US, the EU practises a precautionary principle, which means watering down many of the US trade liberalization proposals. With European negotiators constrained by a rising popular backlash and the US side unwilling to budge, miniscule progress has so far been made in areas such as the ISDS mechanism and public procurement access.
Economic and strategic importance of the deal should ensure that the negotiations are not frozen for good. However, given a crowded political and electoral calendar ahead, TTIP's moment seems to have passed for now.
The cost of TTIP failing would be high, particularly for the European side. Currently, we see Eurozone growth rates gradually slowing to only around 1% by 2030. The failure of TTIP would mean that Europe would have squandered a real chance to reinvent its growth model and kick-start its economy.
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