In today’s Le Monde, Peter S. Rashish (Transnational Strategy Group and ASP consensus member), stressed the geopolitical importance of the ongoing negotiations between the US and the European Union to conclude an ambitious free trade agreement, the Transatlantic Trade and Investment Partnership (TTIP). By integrating their economies, TTIP has the potential to reestablish the very foundations of global trade practices –especially when it comes to the way the US and the EU interact with emerging economic markets:
‘The goal is to ensure that it is Western principles that will determine the rules of the road for the global economy in its next phase, one where emerging economies are going to play a larger role owing to their higher rate of growth compared to the United States and the European Union. But the two transatlantic economies, which still account for half the global economy, have enough weight between them to create new economic structures that other economic powers will have difficulty ignoring.’
The EU and the US have traditionally placed high value in establishing free market economics and supporting an international rules-based order that guarantees fair treatment and creates a level playing field for businesses and governments alike in international trade. These models are increasingly facing competition from more state centric models of economic governance. Rashish writes:
‘…there are fundamental differences between the vision of global economic governance in Washington and Brussels (or for that matter in Tokyo, Mexico City, Bogota, and Seoul) and the one found in Beijing or Moscow. In the first case, there are shared values based on the primacy of the individual and private enterprise; in the second, a system where the state and companies tied to it dominate.’
TTIP has attracted considerable opposition on both sides of the Atlantic, for example on the contents of the Investor-State Dispute Settlement (ISDS) and both negotiating teams have been accused of a lack of transparency. Notwithstanding the criticisms raised, Rashish still urges both the American and European public to give negotiators time to develop their positions and to arrive at compromises, so that the debate about TTIP can evolve around the contents of the agreement and not on fears or misinformation:
‘Americans and Europeans need to focus on the essential: nothing less than the renewal of the post-war international economic system for the world of today.’
Criticism on ISDS and transparency have to and can be dealt with, as long as we do not lose sight of the overarching geostrategic value of integrating the transatlantic economy. TTIP presents the US and the EU with a strategic window of opportunity to setting a free trade precedent and enhance their global influence.
For more information on the relationship between free trade agreements and US national security interests, please see: ‘Five Key Issues’.