The first of the Transatlantic Trade and Investment Partnership (T-TIP) negotiations took place from 8 July to 12 July in Washington DC, which was led by the Office of the United States Trade Representative. Much groundwork was laid on the approach that would be taken in drafting the T-TIP. We have now reached the second round of negotiation, which will take place in Brussels from 7 October to 11 October as part of a follow up to the initial meeting held in Washington DC These are positive developments for the European Commission, as it reaffirms the imperative need to have more efficient bilateral trade between the EU and the United States. Being the two largest economies in the world, the T-TIP would serve as the biggest bilateral trade deal ever negotiated. The T-TIP is primarily aimed at eliminating all trade tariffs, reduce tariff barriers, address costly “behind the border” non-tariff barriers that impede the flow of goods, obtain improved market access on trade in services, reduce the cost of differences in regulations and standards, and protect intellectual property, among others.

Once implemented, it is estimated that an average European household would gain an extra €545 annually. The entire European economy would see our gross domestic product (GDP) increase by around 0.5 percent. This is good news for both producers and consumers alike. Producers would be able to spend less on administration or regulation fees, allowing them to reduce the prices of their products, without affecting their profitability. This measure ensures that their products become more affordable and marketable, which in turn is beneficial to consumers. One of the many cited examples is the safety standards of automobiles in both the EU and United States. As both the EU and United States have high car safety standards, the T-TIP could make it possible for the EU and United States to recognize one another’s standards so that cars that have met safety requirements in one market could automatically be recognized in the other market as well. This reduces the need for further testing before cars can be sold in the respective markets, reducing the cost of regulation fees. This becomes a “win-win” situation for both consumers and producers.

Malta is also set to benefit from the T-TIP if it is implemented. The United States accounts for about 12% of the total Maltese international exports, while Malta’s import from the United States accounts for about 8% of the total Maltese international imports. With less trade barriers in place along with the elimination of trade tariffs, these figures could increase significantly on both sides. This would enable Malta to have a much higher accessibility to existing trade that takes place between Malta and the United States.  Additionally, the T-TIP would also have a positive impact on job creation. As exports from all parts of the economy are expected to rise, there would be an increase in business opportunities that would lead to new job opportunities as well an increase of overall wages for existing workers.

Although the T-TIP would most probably require a few years before it is implemented, it is always great to be laying the groundwork in the early stages. The T-TIP is an ambitious plan, which would substantially affect global trade.  Combined, the EU and the United States account for approximately 30 percent of world trade and 40 percent of world GDP. Investments between the EU and the United States stands at $3.7 trillion, while bilateral trade in goods and services between them averages at $2.7 billion daily. This essentially creates a larger market with a combined population of 800 million people. With Malta being directly connected to such a large free market, Maltese consumers can expect to be exposed to a wider variety of products at a much more reasonable price. At the same time, Maltese producers would now not only be able to market their products freely in the EU but also in the United States with little hindrance. Standardising regulations and eliminating trade tariffs would play a substantial role in increasing trade between the EU and the United States.

Negotiations between both parties will address all levels of trade while ensuring that fundamental policies of both parties would not be jeopardised. For example, for the EU, the T-TIP would not modify our legislation in the matter of sanitary and phytosanitary issues. The ban on the use of hormones in animal products will not be lifted by the EU, and would apply similarly to US related issues. Hence, the T-TIP would seek to respect existing policies by both parties, while striving to improve upon our commonalities. I look forward to the value we are about to gain once the T-TIP is in place.