Well the question kind of says it all, what I would like to know is,if a TTIP between America and EU is put in place even though not only Europe and America will benefit from it but also other countries who export to Europe and America because of the augmentation of demand, would there be any drawbacks for consumers? I know that some companies will find it hard to compete with others but then again what could that cause for us consumers ? Sorry for my bad English its been a long time.
$\begingroup$
$\endgroup$
3
-
2$\begingroup$ Most of the current debate in European countries is not so much about trade - we all know trade liberalization yields welfare gains. It is mostly about the legal power that firms get. US american firms could sue France for french regulation at US courts. This downside is off topic here. $\endgroup$– FooBarApr 15, 2015 at 23:14
-
$\begingroup$ well that goes more in to politics, but from an economic point of view what would that lead to ? Mostly that the TTIP would mostly be in favor of the corporations but where would that put an average worker ? $\endgroup$– Amr El AswarApr 16, 2015 at 0:00
-
$\begingroup$ @FooBar, I think what you wrote could be an answer. Very succinct. The big disadvantage of a FTA or a partnership is that there may be a change in how some things are addressed, like property rights. $\endgroup$– JamzyApr 16, 2015 at 1:54
Add a comment
|
1 Answer
$\begingroup$
$\endgroup$
TTIP is a combination of trade agreements and property rights / legal changes.
Trade Liberalization
Most of the current debate in European countries is not so much about trade - we all know trade liberalization yields welfare gains. In the first-order, these are split between consumers and firms: Consumer get a larger variety / cheaper goods, and (surviving) firms can reach more customers.
These are efficiency gains, and could be split up anyhow between these two groups. To the extent that surviving firms get some of these welfare gains, workers of these firms might get some of the benefits. I'm trying to be very cautious here, because on this last bit, I don't think we have sufficient empirical evidence - and theory will support different results based on the wage setting mechanism.
Of course, there will be firms that lose, and workers that will be fired - which is why the US has set up (I think under WIA) Trade Adjustments Assistance for workers who lost their jobs due to trade. This is one way of sharing the welfare gains of trade with those who lose.
Copyright and Regulation
The issue with TTIP is mostly the legal power that firms get. US american firms could sue France for french regulation at US courts. This downside is off topic here. However, the angst here is that is not welfare gains for each single country. Countries with stronger regulations will lose. Even for the world as a whole, it is unclear whether this yields efficiency gains, or whether firms just reap surplus from countries/governments.
