Following agreement at the Trade Council that I chaired on 14 June, the Commission now has a mandate to open negotiations with the U.S. on an historic Transatlantic Trade and Investment Partnership (TTIP). The formal negotiations between the EU and the US are due to begin on 8 July 2013. While it is far too early to anticipate the eventual negotiated outcome of the Agreement, the negotiating mandate is broad based and positions the Commission to enter the talks with strong support from the Council to negotiate the best possible deal for Europe.
According to assessments made by the EU Commission and other European bodies, a comprehensive Trade and Investment Partnership could over time boost EU GDP by 0.5% per annum bringing significant economic gains as a whole for the EU. Given the current very low level of economic growth in the EU and in Ireland, this agreement will provide a significant injection of economic activity and consequently of new job opportunities. Based on those assessments, if Ireland simply benefited in proportion to the size of our economy within the EU, a comprehensive trade and investment partnership could over time provide gains to Ireland in the order of €800 million per annum in increased GDP and 4,000 new jobs.
An independent study by the London-based Centre for Economic Policy Research (CEPR), entitled 'Reducing Barriers to Transatlantic Trade', suggests the EU's economy could benefit by €119 billion a year, up to 80% of which would come from cutting unnecessary costs imposed on business by having to comply with two separate sets of rules, and from liberalising trade in services and creating new access for exporters into the huge public procurement market in the U.S.
Given that negotiations have yet to begin, it is not possible to estimate in detail the impact on Ireland until there is greater clarity about any exchange of offers, the scale of the possible long term gains will have a positive impact on Ireland given our close trading and investment relationship with the U.S. In addition, many Irish exporters are part of European supply chains where their exports to the UK, Germany or elsewhere to the EU, feed into Europe’s exports to the U.S. While tariffs are already low on trade across the Atlantic, the objective of abolishing even these will bring benefits to business in the short term. Tariffs that average about 3% on EU/U.S. trade may appear insignificant but tariffs can be a tax on business and especially where trade is between company affiliates. That is the case for a good proportion of trade between US multinationals in Ireland and the US market.