A new trade agreement between the US and the UK post-Brexit depends on the Transatlantic Trade & Investment Partnership (TTIP) between the EU and the US. Former US trade representative Michael Froman said a few days ago.
Yet, U.S. President Donald Trump prefers bilateral deals and so Ttip talks remain up in the air, reported the website AgraEurope.
What is the TTIP
The TTIP, the "biggest bilateral trade deal in history," as then English PM David Cameron defined it in 2013. This will mean a full tariff liberalisation between the European Union and the United States.
So, it will bring a one-quarter reduction in the costs arising from non-tariff barriers, with an additional 199 billion euros per year for the EU and between 50 and 100 billion euros per year for the U.S.
It would lead to a mutual recognition (by the U.S. and the EU) of existing regulation and a harmonisation of regulatory requirements.
Concerns for third countries
However, the TTIP is not well-viewed by many observers. Even if it could lead to a great result for the two contractors, it is at least doubtful what will happen to third nations, among which there are developing countries, African states and also the UK after the Brexit.
In fact, the TTIP talks started in late 2013 "without any mechanism being envisaged for the association of third parties or even their potential accession to the agreement," reported a 2015 analysis by Manuel Manrique and Marika Lerch.
Negative effects
Some think that if other countries can accept the standard imposed by the U.S. and the EU, the business of all nations should improve in a no zero-sum game. But there are differences.
For example, among the emerging economies included in the analysis, Turkey is expected to see its trade with the U,S, reduced.
Similarly, a study expects Morocco to see long-term negative effects. Instead, only Mexico's strong inclusion in the North America value chains will protect it against possible negative losses resulting from trade diversion.
Multilateral trade regime
Moreover, it is unclear why third countries would accept decisions taken for them without asking their opinion, thereby modifying their regimes without a certain gain.
As a result, the TTIP could lead to a multilateral trade regime for third markets, such as African and Asian ones.
This is not the situation of the UK as they were part of the EU until recently. The UK has already accepted the standards required by the Union. Yet, Britain after Brexit lost its opportunity to discuss the agreement. The destiny of the British market could depend more on what is going to happen in Europe than on what British politicians decide for their country.
