The TTIP’s Potential Impact on Developing Countries: A Review of Existing Literature and Selected Issues

29-04-2015

The position and concerns of developing countries have only belatedly entered the discussion over the Transatlantic Trade and Investment Partnership (TTIP). While poor countries may gain much from the positive effects of the TTIP, their precarious positions means that they may be less able to react and adapt to negative consequences. The EU is required to assess the development effects of its policies, including trade policies, by the Lisbon Treaty. Although the shape and scope of the final TTIP agreement is not yet known, economic analyses have identified different ways in which it could affect developing countries and influence the global trading system. Several economic studies have also attempted to measure the possible outcomes for different countries and regions. While it appears that the negative impact of trade diversion and preference erosion is likely to be small, there may be notable exceptions, including risks to the position of some countries in international value chains. Proposals to address such negative consequences include concrete measures for affected countries, such as extending unilateral preferences and shaping the TTIP in such a way as to facilitate positive effects. Extending the principle of mutual recognition or equivalence to third parties and defining liberal rules of origin in the agreement are particularly important.

The position and concerns of developing countries have only belatedly entered the discussion over the Transatlantic Trade and Investment Partnership (TTIP). While poor countries may gain much from the positive effects of the TTIP, their precarious positions means that they may be less able to react and adapt to negative consequences. The EU is required to assess the development effects of its policies, including trade policies, by the Lisbon Treaty. Although the shape and scope of the final TTIP agreement is not yet known, economic analyses have identified different ways in which it could affect developing countries and influence the global trading system. Several economic studies have also attempted to measure the possible outcomes for different countries and regions. While it appears that the negative impact of trade diversion and preference erosion is likely to be small, there may be notable exceptions, including risks to the position of some countries in international value chains. Proposals to address such negative consequences include concrete measures for affected countries, such as extending unilateral preferences and shaping the TTIP in such a way as to facilitate positive effects. Extending the principle of mutual recognition or equivalence to third parties and defining liberal rules of origin in the agreement are particularly important.