Academic journal article Romanian Journal of European Affairs

Transatlantic Economic Relations and the Prospects of a New Partnership

Academic journal article Romanian Journal of European Affairs

Transatlantic Economic Relations and the Prospects of a New Partnership

Article excerpt

Abstract: The paper analyzes the international context in which negotiations between the European Union and United States on a Transatlantic Trade and Investment Partnership have been launched in July 2013. This context includes both the repeated failures of the Doha Round negotiations as well as the previous attempts and achievements of the European Union and United States to create a transatlantic partnership. The author considers that the current circumstances are more favourable for the successful finalization of the transatlantic partnership but, at the same time, stresses the sensitive issues that may delay or divert the negotiations. The paper concludes that there are many possible immediate positive consequences on economic growth and creation of jobs of the Transatlantic Trade and Investment Partnership as well as a high potential to expand its implementation in North America through NAFTA and in some other countries that have free trade agreements with either the European Union or the United States.

Keywords: Transatlantic Trade and Investment Partnership, free trade area, European Union, United States, TAFTA, NAFTA, economic integration, post-Doha Round negotiations, globalization

JEL classification: F13, F15, F53, F55, F68

World context: from Doha Round to free trade agreements

The decision taken in February 2013 by the leaders of the European Union and United States to initiate the establishment of a new framework for their economic relations under the form of a trade and investment partnership (in fact a free trade agreement with a broader agenda) is not a singular option in the present context of the world economy.

On the contrary, one can note that the repeated failures of the multilateral negotiations on international trade within the frame of the Doha Round have determined many important actors of the world economy to look towards negotiating free trade agreements1. This trend towards free trade agreements has been noted even since 2003, after the Cancun negotiations failure, when the idea of switching the attention towards bilateral negotiations has emerged as an imperfect but functional option, in anyway better than stagnation.

The understanding of the causes that led to the failure of Doha Round negotiations may explain clearer why the free trade agreements represent a solution for a long period of time in the foreseeable future. Started in November 2001 the Doha Round negotiations had a comprehensive list of objectives including, besides trade related matters concerning manufactured and agricultural goods and services, aspects concerning competition, intellectual property rights and foreign investments2. Some initial estimates showed that the success of Doha Round could have determined important gains at world level, gains estimated at about 280 billion US dollars per year. Unfortunately, the large number of participating states in the negotiations (155 states) correlated with the principle " nothing is agreed until all is agreed" which was applied in the negotiations led, quite normally, to a list of repeated failures.

The states participating in the Doha Round encountered major differences of opinion at least in two areas:

trade with agricultural products, particularly referring to agricultural subsidies provided by some countries or organizations such as the European Union;

the so-called Singapore issues which referred to four issues regarding: trade and foreign investments; trade and competition; transparency in the field of public acquisitions; aspects referring to trade facilitation3.

Regarding these fields of negotiations, in time, a number of divergent positions were stated among various groups of participants as follows:

Divergences between developed states and developing states, members of the socalled Group of 20 - G204. The leaders of this G20 are India, Brazil, China and South Africa5;

Divergences between the United States and the European Union, particularly on agricultural subsidies used by the European Union;

Divergences between developed and developing states on the one hand and the smallest and poorest countries, members of the so-called Group of 90 - G90, on the other hand6. …

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