TTIP is coming. And you will love it

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TTIP 650

Firstly a primer for socialists, who have no understanding of economics: Free trade and globalisation are incredibly good, they drive down prices, increase economic activity, alleviate poverty, decrease unemployment, increase our quality of life due to the wide diversity of goods and services available to us and they stimulate technical and creative advances. Even if a country liberalises trade whilst its competitors don’t the country with the lowest trade barriers always wins. This is all proven fact, look at history to see repeated examples.

When we were less economically literate it was common for countries to “protect” themselves with tariff barriers, or import duties. This was and always is self harm. The General Agreement on Tariffs and Trade (GATT) was created in 1948 to reduce or eliminate trade tariffs and did so through a number of “rounds”. This was so successful that most remaining tariffs in the world are minimal. And, quite frankly, they are utterly stupid. GATT vastly improved the living standards of everyone on earth, except for victims of socialism in places like Cuba, North Korea and Venezuela where basic economics are not understood.

Another major driver towards increasing trade has been the reduction or elimination of transport costs. Things like Netflix, App stores and Spotify have, effectively, zero transport requirements. Physical goods, thanks to amazing efficiencies, such as containerisation and the Maersk Triple E, can be moved around the planet for minimal cost. We are ever closer to the economic ideal of a single homogeneous global market for everything. Which will bring millions out of poverty.

But there is a huge remaining problem and that is what are known as non tariff barriers. American cars don’t sell well in the UK because the steering wheel is on the wrong side. American meat isn’t sold here because it is made using hormones. The UK had to convert to metric measures so as to trade with the rest of the world. Professional qualifications from one country are often not recognised in another country. Pharmaceutical drugs have to be certified with many different agencies around the world. You must be getting the idea now. These non tariff barriers, just like tariff barriers, do huge amounts of harm. Increasing poverty, unemployment, poor life quality etc.

The European Union has zero internal tariff barriers, so its huge bureaucracy devotes itself to removing non tariff barriers. But sometimes they exceed themselves and enforce leftie political interference in the name of removing these barriers. Whilst, at the same time, they have failed abysmally to implement a single market for services, mainly it seems because this would favour the UK most.

As you must have realised by now we would have a far better world if non tariff barriers were removed by everyone everywhere. But this means bringing governments to account, which has to be a very good thing. For instance when Japanese made video recorders first became hugely popular the French government restricted their importation by insisting that they all had to go through one warehouse where each one had to be opened and inspected by a very small staff. The French government was thus erecting a barrier which disadvantaged its own people and the people of Japan. It was plain stupid, but then governments often are.

We now live in an amazing and exciting time when the world’s remaining tariff and non tariff barriers are being rapidly removed. The Trans-Pacific Partnership (TPP) is an agreement between the USA and many Asian countries. To ensure non tariff equality among many other measures it enforces fundamental labour rights and environmental protection, so no country can gain advantage by treating its workers badly or by harming the planet.

The Comprehensive Trade and Economic Agreement (CETA) is a new treaty between Canada and the EU. “It will remove customs duties, end limitations in access to public contracts, open-up services’ market, offer predictable conditions for investors and, last but not least, help prevent illegal copying of EU innovations and traditional products. The agreement contains also all the guarantees to make sure that the economic gains do not come on expense of democracy, environment or consumers’ health and safety.”

As you will realise by now these are truly excellent advances for humanity on this planet.

But the real big one will be a trade treaty between the two biggest trading blocs on planet earth, the EU and the USA. This is The Transatlantic Trade and Investment Partnership (TTIP) and as you can imagine the negotiations are incredibly complex because they are seeking to create the freest trade possible by removing the maximum number of tariff and non tariff barriers, whilst still respecting local sensibilities. The treaty is being developed by 24 joint EU-US working groups, each considering a separate aspect of the agreement.  All 28 EU governments will then have to approve or reject the negotiated agreement in the EU Council of Ministers, at which point the European Parliament will also be asked for its endorsement. Getting this all done is no simple task.

The benefits, obviously, will be enormous. The European Centre for Economic Policy Research estimates that the treaty will create a GDP increase by 2027 of 68-119bn euros in the EU and annual GDP growth of 50-95bn euros in the US. This equate to increased annual disposable income for a family of four of 545 euros in the EU and 655 euros in the US. All, as history has proven to us many times, the sorts of results that free trade delivers.

Capitalism is incredibly successful at delivering goods and services to the world’s population, because it is driven by competing to look after customers. Its biggest obstacle is usually government, which often harms its citizens more than it helps them. Free trade allows capitalism to work even better and so we should all be cheering TTIP for the many benefits it will bring to all of us. Anyone who thinks otherwise is ignorant of both economics and history.

22 Comments


  1. This is satire, right? Can’t possibly be anything else.

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    1. Yes: I chortled right through to the end, assuming this *was satire, but unbelievably no. There’s also the small matter of these ‘benefits’ coming at the expense of the rule of sovereign law, never mind these vague ‘local sensibilities’. As I suspect you well know, it means corporate lawyers will have to the power to sue signatory countries if they feel they have acted in a way contrary to their business interests – and in camera. Basically the kind of ultra-right-wing libertarian garbage we would have regarded as an outrage only 20 years ago. And somehow we’ve now reached the stage where *mild demurral* has us denounced as ‘socialists’. World’s gone mad etc.

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    1. The Guardian does not agree with you. An opinion piece in its pages by two commentators – one the Tory Baron Hill of Oareford – does not count as The Guardian agreeing with you. If you want to make a strong argument accuracy counts.

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    1. The globalisation and liberalisation of capitalism is responsible for placing over a THIRD of the entire world population in poverty or extreme poverty, on less the $2 a day. Yet you claim that “we will love” TTIP, which only promises to further globalise, liberalise, and deregulate capitalism?

      Nothing sensible or reasonable about such commentary at all, not from a global justice perspective. On the other hand if you personally stand to gain from TTIP, or simply couldn’t care less about the collateral damage it will cause because it won’t hurt you, then your commentary is definitely both reasonable and rational.

      Reply

  6. Oh look articles from newspapers that serve the interests of big business how surprising that you agree with them. That’s right you agree with them! don’t make out like you came to this conclusion all by yourself.
    Any person who has put any level of genuine thought into this can understand the viewpoint that it is wrong and undemocratic for big business to have such influence over international policies.
    With other trade deals including clauses which open the government up to being sued if they change a policy which causes loss of profits for a corporation, even you can surly understand how this can be a serious conflict of interests and stops politicians from doing whats right for the good of the people? Surely you can understand that this is a genuine concern put forward by people who are against ttip.

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  7. You are against labour rights, consumer rights, public services and enviromental protection. Aren’t you? You are only interested in money, am I wrong?
    Looking at who you consider was the best UK prime Minister, I’m sure you are against democracy and society too. “thereis no such thing as society” she said
    http://briandeer.com/social/thatcher-society.htm

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  8. Bruce couldn’t explain to me why it was right business could usurp democratically elected governments. He told me that companies want what is best for consumers, but couldn’t explain why it was reasonable for private business to over-rule scientists, scholars or people standing to prevent utterly irresponsible behaviour for profit. He quickly muted me when he realised he couldn’t offer anything more than conjecture in the wake of repeated examples of how business only cares about bottom lines.

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    1. marktimmins

      Since 1948 with GATT the WTO has had power over our government.
      Just like TTIP.
      Were you ranting about GATT?
      Or are you so ignorant that you didn’t know about it?

      Reply

  9. Nice to hear from a supporter of TTIP. Sadly there are some generalizations in your story, such as the entire first paragraph.

    Before disregarding everything I say I hope you can suffer through a few examples. First “the country with the lowest barriers wins”. There are plenty of economic successes that depended on economic barriers. Most “Asian tigers” had a combination of strong government, tariff walls and promotion of own industry. Only when these companies had the chance to become competitive they lowered these walls. China is still doing it. With good reason, having your own industry makes sure revenue flows back into your own economy instead of leaving for the EU or US based compan, it prevents brain drain, creates more local jobs, etc…

    Second Europe might preach free trade, but there is a big tariff wall around Europe for products from outside Europe to protect the internal market. Moroccan tomatoes should be much cheaper than Spanish or Dutch tomatoes due to favorable circumstances however they’re not allowed to import. So it’s only free trade when it’s in our advantage.

    Finally although you might want lower prices, but only low prices might not be your goal. Agricultural products can be made much cheaper outside the EU however how would you feel if the EU was totally dependent on food from other countries. Our dependency on Russian gas might give away some of the disadvantages of that.

    I agree that its stupid that harmonization of standards will benefit the economy. The US and EU both want safe cars, for example. However that doesn’t make free trade the holy grail. Just some of the things that came to mind.

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  10. The ill informed anti TTIP brigade complain about loss of sovereignty and about the power of corporations. As usual they are talking utter rot. We gave away trade sovereignty in 1948 with the WTO and then with the successive GATT rounds. Then even more in 1973, when we joined the EU. So, as usual the left know nothing of economics and nothing of history, because if they did they wouldn’t be lefties.

    Here is a typical example of the WTO wielding their power: http://money.cnn.com/2012/03/12/markets/boeing-airbus-wto/

    Reply

  11. Sadly there is no way to edit your comment. The last paragraph should read: harmonization of standards makes sense. Both the EU and the US want safe cars….

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  12. “American meat isn’t sold here because it is made using hormones. … These non tariff barriers, just like tariff barriers, do huge amounts of harm.”

    I am not being harmed by not having hormone-filled American meat kept on the far side of the Atlantic. If these “trade agreements” included a way to force improved safety regulations in America instead of destroying ours, I might just stop thinking of them as American Imperialism.

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    1. christopher,

      You can see where meat comes from when you buy it. Even now some people only buy organic meat.
      And American beef doesn’t seem to be doing the American people any harm.

      Reply

  13. Oops. That should say “I am not being harmed by having hormone-filled American meat kept on the far side of the Atlantic.”

    Reply

  14. There are a lot of anti TTIP campaigners. I have read their objections. And the main unifying theme that come across is the ignorance of the protesters.
    They never seem to understand the huge benefits of free trade, that have been proven countless times. They don’t understand the nature and effect of tariff and non tariff barriers.
    They complain about the provisions of TTIP when these are still secret and still being negotiated.
    They object to the secrecy of the negotiations, when this is the only way to do it, with the various sides taking negotiating positions and then compromising.
    They say it is undemocratic, when the whole process is overseen by the politicians who they have elected.
    They complain about the loss of sovereignty when we gave that away with WTO in 1948, with the EU in 1973 when we joined NATO in 1949, when we joined the UN in 1945 and with many other international agreements. These people really are utterly ignorant about the nature of sovereignty.
    They think that individual citizens should be involved in the negotiation process. When there are 500 million people in the EU and 320 million in the USA.
    They know absolutely nothing about the various GATT rounds, which were just like TTIP, and which have made everyone in the world more prosperous.
    They seem to think that they will be forced to buy products that they don’t want to, like USA beef. This is utterly ridiculous, the UK government doesn’t tell you what to buy in Tescos.

    And so on. The protesters come out with a litany of utter ignorance and lies that only demonstrate their lack of knowledge.

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  15. You repeat your point about lefties making ill-informed statements and yet you do employ some sweeping and shallow generalisations.
    The example of the north African tomato market and it’s benefit to the EU compared with continued use of Spanish products: In 2010, Spain employed 2.2 million people (see the EU FSS reports) and we’re talking about a country that is desperate to see growth of its home industries due to it being one of the hardest hit European nations by the recent economic crisis. Broader trade with Morocco may give us cheaper tomatoes, but it would sell Spain down the river.

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    1. Robert,

      So you think that British housewives should buy the most expensive tomatoes, to save Spanish jobs.
      Good leftie thinking that is the reason socialism always fails.

      Reply

  16. Thus putting the interests of big business ahead of the people it should supposedly be serving.

    Reply

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