Briefing Paper

What should development policy actors do about the Transatlantic Trade and Investment Partnership (TTIP)?

Berger, Axel / Clara Brandi
Briefing Paper (1/2015)

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

Dt. Ausg. u.d.T.:
Die Transatlantische Handels- und Investitionspartnerschaft (TTIP): was sollte die Entwicklungspolitik tun?
(Analysen und Stellungnahmen 1/2015)

The Transatlantic Trade and Investment Partnership (TTIP) is currently the subject of heated debate – but with a narrow focus. The debate is primarily concerned with the impact of TTIP on Germany and Europe. Too little attention is being paid to the implications of this mega-regional for the rest of the world. In light of growing global in-equality, the question of how we can shape globalisation fairly and whether TTIP can play a role in this is more pressing than ever.
TTIP is an attempt by the European Union (EU) and the United States to define new rules of play for the world economy with potential global application. From a development policy perspective, this exclusive approach gives cause for concern, as it precludes emerging economies and developing countries from negotiations.
The TTIP negotiation agenda goes far beyond the dis-mantling of trade barriers, also encompassing, for example, the rules for cross-border investment and a broad spectrum of regulations that are often only loosely related to traditional trade policy. This expansive negotiation agenda is the real innovation of the transatlantic negotiations, with uncertain consequences for all those countries that do not have a seat at the negotiating table. Whether they like it or not, these countries will be affected by the rules agreed upon at this table through their participation in international trade.
As such, TTIP could mark an important turning point in the world trade system. TTIP, along with the Trans-Pacific Partnership (TPP) negotiated by the United States and 11 other nations, threatens to further undermine multilateral negotiations within the World Trade Organization (WTO). Of even greater concern is the fact that emerging economies such as Brazil, India and especially China, none of whom are involved in the TTIP and TPP negotiations, could react to these mega-regionals by joining together to form opposing trade blocs. Instead of taking a largely exclusive approach, it would be better if the transatlantic partners placed the emphasis on cooperation with emerging eco-nomies and developing countries, especially given the tremendous economic potential of these nations and the global challenges currently being faced in other policy areas, challenges which can only be overcome by working together with these states.
When it comes to promoting global development and shaping globalisation fairly, the TTIP negotiations offer potential and present challenges at the same time. Nonetheless, there are some specific recommendations as to how TTIP can be made as development-friendly as possible: 1) steps should be taken to avoid discriminating against third countries in the area of regulatory cooperation; 2) rules of origin should be as generous, uniform and open as possible; 3) preference programmes of the EU and the United States should be harmonised;  4) third countries should be afforded credible options for joining the partnership in future.
Development policy stakeholders have the following options for action: 1) the TTIP negotiations should under-score the importance of measures for integrating developing countries into global value chains; 2) efforts need to be made at European level to promote greater consistency between TTIP and development policy goals, particularly those of the post-2015 agenda; 3) steps should be taken to reach out to emerging economies and developing countries with greater transparency and to offer them the opportunity to engage in dialogue; 4) the WTO process needs to be reinvigorated and reformed at multilateral level.