Does Brexit Threaten TTIP Negotiations?
On June 23, 2016, nearly 52 percent of the British citizens voted to leave the EU. As the UK and the US are important trading partners, there is the belief that the Transatlantic Trade and Investment Partnership (TTIP) negotiations without Britain might be less attractive to the US. Would the Brexit therefore jeopardize the future of TTIP?
The TTIP negotiations discuss market access for EU and US companies, cooperation on regulatory issues and global rules for trade. Especially in the field of tariff reduction considerable progress has been made, namely a 97 percent reduction of all tariffs. This could be highly beneficial for European shippers. However, progress in the field of services and public procurement remains slow. After three years and 14 negotiation rounds, thirty chapters are being negotiated.
Due to the Brexit an important economic market for American products will be lost, shrinking the EU market by about 16 percent. It would therefore make the EU a less attractive trade partner. However, US Trade Representative Mike Forman stated that TTIP is still of economic and strategic importance to the US. The EU without the UK is also still a strong supporter of TTIP. However, the triggering of Article 50 by the UK could divert the EU’s focus and resources to the Brexit negotiations on UK access to the internal market at the expense of the TTIP negotiations.
Furthermore, it could be said that other, more threating, factors are the upcoming elections in Germany and France in 2017 as anti-TTIP sentiment is growing in these countries. Additionally, the upcoming American presidential elections in November also complicate negotiations as presidential candidates Trump and Clinton both have spoken out against TTIP.
Therefore, although TTIP creates significant trade benefits, the negotiations are facing challenges. It could be concluded that the Brexit makes the deal less attractive for the US, but upcoming elections in France, Germany and the US pose a larger threat to the trade agreement.