How will TTIP affect business?
Notwithstanding the Brexit vote, the Transatlantic Trade and Investment Partnership (TTIP) may still come to fruition by the end of the year, creating a stronger trade and investment relationship between the world's two biggest economies, the EU and the US.
In turn, increased business activity would lead to a greater demand for legal advice in everything from mergers and acquisitions to employment.TTIP aims to cut trade tariffs and harmonise regulation in sectors such as energy, pharmaceuticals, and textiles. According to independent studies, the deal would add £100bn to the EU's aggregate GDP. For the UK, this would mean an extra £10bn going into the domestic economy - the equivalent of £400 per family.
There have been repeated delays in reaching an agreement. The British government was one of the deal's strongest supporters. David Cameron
and Barack Obama have both restated their ambition for TTIP to be realised this year - both
will soon be out of office, and
the political context has now radically changed following
the Brexit vote. The French government previously stated that it would veto the deal in its current form. Jean-Claude Junker is trying to galvanise EU member states, calling for each country to reconfirm their commitment. The position with the UK after the referendum vote, and without the UK giving its withdrawal notification under article 50, is that it would technically still be subject to TTIP if it is concluded. However, TTIP does require formal ratification by each EU member state. Therefore, the UK would have to consider its position on TTIP within the context of the wider negotiations on the terms of its withdrawal from the EU. This could lead to the UK agreeing its own deal with the US based on the TTIP template.
One consequence of the Brexit vote is that some of the areas of dispute in the TTIP negotiations that were causing unease with Germany and France may now be more easily resolved. For instance, the UK had been insisting that financial services and banking should be included in TTIP. France and Germany were reluctant to see any relaxation of these regulations but may now be more enthusiastic about concluding the negotiations as quickly as possible.Supporters of TTIP say that it will dramatically open up the US market for European companies, increasing demand for their products. Other concerns are not insuperable. The American experience suggests that investor state dispute settlement judgments are fair and not anti-democratic, as some critics suggest.
Fair competition is key: TTIP will help EU member states to compete more effectively, bringing in more investment
and more jobs. While trade agreements are complex and multifaceted, lawyers can benefit from understanding much more about TTIP and its potential benefits.With the right protection, TTIP or its successor could actually be good for British companies, workers, and lawyers. Given the huge problems which Britain faces in negotiating a new trade deal with the EU, this might provide some welcome relief.