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The Transatlantic Trade and Investment Partnership refers to a series of trade negotiations. It is being carried out in most confidential manner between two countries, viz. European Union and Union States (Sassen, 2018). The main purpose behind this negotiation is to create world's biggest free trade zone. The present report highlights main concept of proposed agreement, with some major benefits and drawbacks for respective countries. It also entails issues such as reason behind TTP (Trans Pacific Partnership) has met with significant political resistance in US, while TTIP didn't. In addition to this, an argument is also made to justify whether this negotiation is good for American business or not. Furthermore, some recommendation is also given to improve the given agreement.

Main Body

Concept of TTIP with its benefits and drawbacks

Transatlantic Trade and Investment Partnership (TTIP) can be defined as a trade and investment agreement, which is made between European Union and United States. Under this agreement, Barack Obama who was a previous President of US, has negotiated a free trade deal with EU on February 12, 2013. Custom duties, heavy tariffs, red tape and more, has created restrictions on investment within countries. It has made difficult for nations to import and export their products or services with each other (TTIP: Why the EU-US trade deal matters,2019). Therefore, to get rid from such barriers of trade, The United States along with 28 countries which are members of EU, has made world’s largest and richest trading partnership. It is accounting to near about 60% of global GDP, 33% of world trade in goods and 42% in services. By minimising such barriers, these nations get benefits to boost their economy. It also increases job opportunities as well as widen choice and brings high price of products to low for consumers. Thus, this ambitious TTIP agreement builds close relationship between US and EU, as well as demonstrates clear leadership on trade agenda. It also helps these nations in establishing 21stcentury trade rules. This would aid in securing transatlantic position of community as gravity's centre in global economy.


TTIP would remove tariffs, minimise restrictions on investment and cut red tape between European Countries and US. It would make easier for organisations of EU which are dealing under large and small sector, to export goods and services within US. In addition to this, it also makes easier for corporations to make investments in other countries. Thus, it would be good for economy as well as will also create new job opportunities for residents (Shannon, 2018). Creating the world's biggest free trade zones provides various opportunities to people also. It includes improvement in purchasing power through growth in economy, a range of similar products on cheap rates and more. In this regard, average household consumption could be raised to £400 per year (Transatlantic Trade and Investment Partnership (TTIP): benefits and concerns,2015).Currently, EU tariffs are measured as 10% on some specific branded cars, near about 20% on beverages and food products, approx. 12% on clothing 14% on electronic items as well. While lifting trade barriers also aid organisations to share profitability of increased products with larger companies. Small corporations also get chance to export services across nation and expand business in international market more easily. Some major benefits of this proposed TTIP can be described as:-

  • Both Europeans and Americans would be able to export each others' services and goods more easily, without paying any additional tariff.
  • Lower price leads to raise more demands of households products, that ultimately leads to high consumption. Thus, this would lead to increase production and raise performance of organisations.
  • Government of respective countries would get benefits to increase share of income taxes from corporations, due to higher consumption levels.
  • This type of raise in government revenues will also reduce fiscal deficit and inflation in economy as well.


But reflect to controversial part of this trade deal i.e. TTIP, it may affect adversely everything, which starts from income to the food consumption as well as state of NHS. It also not prevent rules related to new environmental and low carbon legislations (What is TTIP and why should we be angry about it?, 2019). With respect to EU rules based on personal data protection, are also covered under negotiation in TTIP. As it has estimated by European Commission that till 2027, TTIP will boost its economy to near about £94 billion, but it will cobbler its residents. As per opinion of Yin-Ping (2016),it has predicted that TTIP will snitch jobs from more than 600,000 Europeans. It leads to decline GDP of EU states as well as reduce per capita income also. In this regard, major drawbacks TTIP are highlighted as beneath for both EU and US:-

  • Increase global competition will lead to reduce employment in some sectors. It includes producers and exporters who deal with machinery and meat.
  • TTIP also leads to reduce standardisation of Europeans such as food safety, privacy and labour condition, environment protection etc.
  • It also adversely effect per capita income of low and middle income countries.

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TTP got success to meet with criteria of significant political resistance

According to article given by Tom Chodor, it has ascertained that TTP is considered as a bold step in trade diplomacy. It opens various market as well as boost labour and environmental protection also. This agreement is going to shape trade politics of both US and EU countries, in upcoming years.

Therefore, due to such reasons, Donald Trump the recent President of UK has vowed to withdraw United Stated from TTP, which is a free-trade agreement including 12 nations. It includes United States, New Zealand, Canada, Mexico, Vietnam, Malaysia, Singapore, Brunei, Japan, Chile, Australia and Peru. These countries are labelled as most significant trade agreement in last two decades. In this regard, a flagship policy established under Obama administration has been opposed by Donald to withdraw the pact in 2017 (The rise and fall and rise of the trans-pacific partnership: 21st century trade politics through a new constitutionalist lens, 2019). But it still has not been ratified. In 2018, Donald Trump has tweeted that this deal of free-trade “must be stopped” to “protect the American workers”.

According to view point of Cumming and Zahra (2016), it has stated that Trans Pacific Partnership can be defined as a new constitutionalist instrument related to crisis management. It mainly aims to protect and preserve privileges of transnational capital as well as revive stagnating economies also. In addition to this, TPP has also came into focus in 2009 as transnational capital, which are sought to be respond towards post-GFC. This would attempts to tighten regulations related to finance and impose restrictions on mobility also. For this purpose, measures are pushed which would protect rights of stakeholders (investors) and impose market discipline also.

TTIP would really stimulate more investment

Trans Pacific Partnership (TTP) has met with some certain political resistance in US while TTIP has failed to meet the same. The main reason behind this failure is that majority of nations under TTP are developing economies. Therefore, trade agreements made under TTIP that are- reduce regulatory differences, lower trade tariffs, reduce custom duties and more, are more beneficial for developing countries. According to a Brussels-based campaign group as run by Olivier Hoedeman of Corporate Europe Observatory, it has evaluated that concept of TTIP would act as a “chill factor”on regulatory bodies. Here, government fear that regulations related to business might lead to protracted legal challenges as well as bills for compensation. Since Investor-state dispute settlement (ISDS) are common in investment agreements at international level. But as per research conduct by United Nation Commission on Trade and Development, is has analysed that investors are now use tribunal system. For example: Action taken by Philip Morris, a tobacco company against Australia and Uruguay over their new system of packaging. So, there is a high possibility of adverse impact of ISDS on National Health Service. Therefore, it reflects the biggest threat to society where ISDS also allows corporations to sue governmental laws if it decreases their profitability (Roy, 2016). So, it reflects that unelected translational corporations might dictate policies and laws of democratically elected government. As per agreement of TTIP, the main aim is to open up public health and educational services to US Companies. This would lead to privatisation of NHS.

Thus, all these drawbacks of TTIP would lead to fail to meet criteria of significant political resistance.

Justification of Trump decision as per concern with American consumers and organisations

As per article given by James McBride, it has ascertained that rejection of Trans Pacific Partnership has affected mostly the US trade policies. This would affect trade on employment, national sovereignty, inequality and safety standards as well. The new President of US, Donald Trump has said that his administration will concern mainly on bilateral deals only. Therefore, Trump has ordered to withdrawal TTP in January 2017. This would allow nation to strike better in terms related to multilateral deals.

But as concern from business point of view, it has argued that both agreement viz. TTIP and TTP would have a positive impact on economy of US. It gives opportunities to manufacturers to boost their exports in Asian countries. While purchasing import on lower-priced will raise their productivity also (The State of US Trade Policy, 2019). Other than this, from consumers' point of view, increased competition in business would be a boon for them. As they will get a wide range of innovative and high qualitative products on reasonable price rates. Therefore, such deal proves beneficial for both American business and consumers. According to investigation of …, it has analysed that TTP has produced per capita income to near about $78 billion for US. While in context with TTIO, European Commission has estimated that this would add more than $100 billion to economy of US and $152 billion to EU per year. Therefore, from these arguments and estimations, it has evaluated that ordered to withdraw TTP is not an effective decision taken by Trump.

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It has concluded from this report that a trade deal between US and EU countries would prove beneficial for both businesses and consumers. It generated growth in economy, create more and better jobs, aid companies to trade freely in other countries and more. In addition to this, trading between EU and US would raise potential of US investors in Europe. The main aim of signing this trade deal is to get rid from trade barriers and reduce tariff rates. This would raise high standards which serve as a basis for international organisations and regulators.


  • Sassen, S., 2018. Cities in a world economy. Sage Publications.
  • Shannon, T. R., 2018. An introduction to the world-system perspective. Routledge.
  • Yin-Ping, H., 2016. Trade, industrial restructuring and development in Hong Kong. Springer.
  • Cumming, D. J. and Zahra, S. A., 2016. International business and entrepreneurship implications of Brexit. British Journal of Management. 27(4). pp.687-692.
  • Roy, T., 2016. The British Empire And The Economic Development Of India (1858-1947).Revista de Historia Economica-Journal of Iberian and Latin American Economic History. 34(2). pp.209-236.

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