Atlanta companies push EU trade pact

“The question is, what are the rules going to be and will they tilt the playing field towards multinational companies, and will they undermine worker rights and safety?”

- Celeste Drake, trade and globalization expert for the AFL-CIO

What is TTIP?

The Transatlantic Trade and Investment Partnership would establish a free trade zone - the world’s largest - between the United States and the European Union. Negotiations are expected to resume in early 2015.

TTIP would remove already low U.S.-European tariffs each side imposes on imported goods and services to protect its own.

In addition, it would streamline regulations that are different on each side of the Atlantic that raise the price of doing business.

As a result, goods could move more freely - and cheaply - between the U.S. and Europe.

However, a costly regulation to one side may be an essential safety requirement to another. And critics say wider competition would hurt some businesses, could depress wages and cost jobs in some industries.

What if you could spend less to buy Belgian chocolate, French champagne or a British car?

You might get the chance if a proposed free trade pact between the U.S. and European Union is approved. Negotiations, under way since 2013, could resume as soon as this month.

Supporters – including Atlanta-based UPS and Coca-Cola – say establishing a free trade zone across the pond would create up to 740,000 jobs in the U.S. and spur huge economic benefits for both sides - $137 billion to the U.S. economy alone.

But like any trade agreement, the Transatlantic Trade and Investment Partnership would not come without complications – or controversy. Observers say the deal faces high hurdles in being approved on two continents.

In Europe, the treaty has generated opposition ranging from British worries that it might undermine the National Health Service by expanding U.S. insurance companies’ access to U.K. customers, to French fretting that its cuisine standards might be compromised. Anti-pact protests have been held in European cities.

In the U.S., some are concerned about the potential effect on U.S. businesses and workers who could lose revenue and jobs in a more widely competitive landscape. Critics say the economic gains from such free trade deals are vastly overstated.

The treaty, known as TTIP, was outlined as a U.S. priority by President Obama in his 2013 State of the Union address. Many American and European leaders embraced the idea.

“It’s fundamentally about jobs and growth on both sides of the Atlantic,” Jeremy Pilmore-Bedford, Atlanta’s consul general for the United Kingdom, told The Atlanta Journal-Constitution.

Britain’s government strongly backs the plan, which would create a powerful free trade market of more than 800 million people. Both imports and exports would become easier and cheaper.

Among other things, TTIP would remove already low U.S.-European tariffs each side imposes on imported goods and services to encourage sales of their own products.

Corporate friends

The deal has strong backers among some Atlanta corporations.

UPS, for instance, which operates in more than 200 countries and has seen significant growth in Europe, is co-chairing a national business coalition advocating for the deal. It’s also trying to bring a round of the negotiations to Atlanta.

Laura Lane, head of global public affairs for UPS and a former trade negotiator, estimates the company’s volume grows 15-20 percent after free trade agreements take effect. In this case, that could boost UPS trading by 13 million packages and support 2,400 jobs, she said.

“It would make it cheaper for companies to ship goods back and forth,” she said. “That would lower prices for the consumer.”

Jeff Rosensweig, an economist at Emory University’s Goizueta Business School, said TTIP would be a key move for the two sides. The U.S. and 28-member E.U. would form the world’s largest free-trade zone at a time when the U.S. is recovering from recession and Europe is continuing to struggle.

"The 21st century could be an Asian century, between the rise of China and India," he said. "What prevents North America and Europe from becoming marginalized? TTIP could keep them as a focal point of the global economy."

Georgia sectors expected to benefit include the auto, paper, and business services industries, according to an analysis by Atlanta’s British Consulate.

In addition to lowering tariffs, TTIP would tackle regulations that are different on each side of the Atlantic, raising the price of doing business.

For example, European automobiles produced in the U.S. must comply with differing American and European regulations for vehicle or worker safety. Streamlined rules would lower costs.

But what looks like a costly regulation to one side may be an essential safety requirement to another.

And in every major trade treaty, there are losers as well as winners. Some workers lose their jobs or must accept lower wages because of new competition from abroad.

Celeste Drake, trade and globalization expert for the AFL-CIO, said the huge consortium of labor unions has questions about the partnership but hasn’t come out against it.

“The question is, what are the rules going to be? And will they tilt the playing field towards multinational companies, and will they undermine worker rights and safety?” Drake said.

She noted that TTIP is different from U.S. trade deals with South Korea, Colombia and other nations. Europe is a larger, more highly developed economy and in many ways has tougher worker protections than the U.S.

‘Monied interests’

Drake did express concern about the negotiations’ lack of transparency, which could cloak controversial aspects of a final plan. “It’s a hard thing to assess if the monied interests have all the influence,” she said.

Emory’s Rosensweig suggested money be set aside for retraining to soften the effect on workers or companies hurt by the pact. NAFTA, the controversial free trade agreement between the U.S., Canada and Mexico, included a similar provision.

Another area of disagreement involves a subject both sides are passionate about: food.

For example, U.S. chicken has for decades been rinsed in hyper-chlorinated water, a process American regulators have approved. The EU doesn’t permit the practice, and opposes other U.S. food standards.

“Hormone-boosted beef. Chlorine-washed chicken. Genetically altered vegetables. This is what they want for us,” French organic farmer Jean Cabaret recently told the Washington Post for an article about TTIP.

“In France, food is about pleasure, about taste. But in the United States, they put anything in their mouths. No, this must be stopped.”

UPS’ Lane said there’s an easy fix.

“Labeling, labeling, labeling,” she said. “Let the consumer decide.”

Bryan Tolar, president of the Georgia Agribusiness Council, said a deal could open new markets to Georgia farm goods. But he added the U.S. should insist on removal of E.U. trade barriers on certain agricultural goods.

U.S. Sen. Johnny Isakson, R-Ga., is a member of a subcommittee on international trade. He has been to Europe numerous times to discuss trade issues this year.

“It’s an important treaty. There’s a whole lot of interest in free trade right now, the rhetoric is high and there’s an opportunity to strike a deal,” Isakson said, emphasizing that he wants a level playing field for Georgia agriculture.

Still, TTIP faces a long road: it would need the approval of a fractious Congress and White House, and the 28-member E.U.

“There are many obstacles, many hurdles,” Isakson said.