Transatlantic Free Trade Area (TAFTA) is the most ambitious undertaking in the economic relationship between Europe and the US. Never before have so many issues been on the agenda at the same time. TAFTA provides for the elimination or significant reduction of customs duties, broader market access in services, intellectual property protection issues, increased access to public procurement markets, protection of foreign investment and dispute resolution between foreign investors and the host country. The reduction of non-tariff barriers, especially those related to differences in standards and norms and the simplification of administrative barriers will be of the greatest importance.
It will be an agreement subject to further additions and modifications over time, which should lead to regulatory convergence in the longer term. TAFTA is an opportunity to halt, or at least reduce, the rate of erosion of the positions of Europe and the United States in production and world trade. The agreement has strong support from economic circles on both sides of the Atlantic and from leaders of the US and EU countries. Liberalisation is expected to bring significant benefits to the parties, although not necessarily on an identical scale.
Objectives of TAFTA
According to official figures, the agreement under discussion is primarily aimed at creating a free trade area, which according to the European Commission is expected to bring benefits to citizens and companies in the form of:
● opening the US market to European companies,
● reduction of administrative formalities to be fulfilled by exporters,
● establishing new regulations which will make it easier to export, import and invest abroad under fair conditions,
● creating jobs and growth throughout the EU,
● lower purchase prices and increase choice.
Meanwhile, according to a study by the American Chamber of Commerce in Poland, the objectives of TAFTA are:
● further liberalise access to internal markets,
● elimination of investment barriers through better regulation,
● elimination of customs duties in mutual trade,
● elimination of costly non-tariff barriers that impede movement of goods, including agricultural goods
● improving market access in services,
● substantially reducing the cost of differences in rules and standards by promoting greater compliance, transparency and cooperation, while maintaining a high level of health, safety and environmental protection,
● develop principles and new modalities for cooperation on issues of global concern, including intellectual property and market mechanisms addressing the issue of state-owned enterprises and local barriers to discriminatory market access.
Consequences of TAFTA
TAFTA is an opportunity primarily for large EU and US companies and corporations. By removing barriers to transatlantic trade, it allows them to make greater profits and to exert pressure on countries’ decisions, especially in terms of legislation. It seems that this agreement will favour American (multinational) corporations, and thus will not significantly strengthen the EU as a global actor. This is evidenced by the constant lobbying of hundreds of experts and advisors employed by the corporations, while at the same time cutting off all other organisations and entities from the negotiations. There can be no doubt, however, that the economic, social and ecological costs will affect consumers and small businesses in particular, who have no chance against the powerful concerns.
The agreement, in principle, should be signed when President Trump meets with President Juncker in Washington on July 25, 2018. But the European Union has made clear that it will not give up some of its standards and regulations to enter into any agreement.
One of the areas being discussed is the protection of data privacy of European citizens. The United States wants a model similar to what is in the Trans-Pacific Partnership (TPP), but for Europe this would be too much.