The US-EU Free Trade Agreement: Pros and Cons

According to a report by Global Research, “the Transatlantic Free Trade Agreement (TAFTA) between the US and EU intends to create the world’s largest free trade area, ‘protect’ investment and remove ‘unnecessary regulatory barriers’. Corporate interests are driving the agenda, with the public having been sidelined”.

Despite many difficulties, it is clear that a final agreement between the EU and US has been reached. This will have an impact on either side of the Atlantic  as well as on the economic and trade ties with countries elsewhere.

The agreement is expected to boost the kind of growth sought by both parties and create hundreds of thousands of new jobs, particularly since it is expected not only to remove customs tariffs – as is the case in such agreements – but also includes the liberalization of trade in the services sector. This is a major step forward given that trade liberalization within the member states of the World Trade Organisation following the Doha Round has been at a standstill over several years. Since a US-EU free trade agreement could lead to seismic changes in international trade patterns, it is essential that other countries strive to rearrange their economic and commercial engagements, including signing more free trade agreements, particularly with the US, the EU, China, India, Turkey, Brazil and Russia.

One of the key aspects of the negotiations is that both the EU and US should recognise their respective rules and regulations, which in practice could reduce regulation to the lowest common denominator. The official language talks of ‘mutual recognition’ of standards or so-called reduction of non-tariff barriers. For the EU, that could mean accepting US standards in many areas, including food and agriculture, which are lower than the EU’s.

There are disparities concerning agriculture and subsidies provided to this vital sector, as well as on the issue of environmental protection and genetically-modified foods, which are rejected by the EU. Also, some Europeans think that the free trade agreement will grant US multinationals certain privileges.

The information is provided by Gulf News.  Stay informed about the latest shipping news with RCL updates!