Oxford Analytica | Thursday, July 31 2014

International trade partnerships: Deal or no deal?

Slim chances for the world’s biggest trade deals, the TPP and the TTIP

Talks are under way for two enormous plurilateral free trade agreements (FTAs) — the TransPacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). However, while these deals offer opportunities for greater trade, growth and job creation, obstacles in several countries could delay the negotiations — and possibly scupper the deals entirely.

The first hinge point is whether US President Barack Obama is given fast track Trade Promotion Authority (TPA). This has strong pockets of support and opposition within both major parties of the US Congress. Passage is possible, but not before November 2014 at the earliest as parties focus on electoral unity.

– A Japan-US bilateral accord is possible by the end of 2014.
– TTIP is more important for the EU than the United States because the former is struggling to generate growth internally.
– To achieve the two deals, it may be necessary to water down the agreements so much as to make their impact relatively irrelevant.