Report outlines potential winners and losers of TTIP agreement

28-Jan-2015 - Last updated on 28-Jan-2015 at 13:32 GMT

Related tags United states International trade

The planned EU-US free trade agreement holds unexpected opportunities for developing countries, but could negatively impact Southeast Asia, says a new study.

The report from Munich-based ifo Institute for Economic Research was commissioned by German development minister Gerd Müller set out to establish an ‘independent basis for discussion’ over the global effects of the planned Transatlantic Trade and Investment Partnership (TTIP).

According to Müller, the report analysed the effects of TTIP on developing and newly industrialised countries – with the findings refuting concerns voiced by numerous critics that TTIP would push smallholders in poorer southern regions further into poverty.

"The trade agreement with the United States offers a unique chance to structure globalisation more fairly. We want to set minimum ecological and economic standards for the entire world," Müller said.

According to the German language report, the sheer size of the transatlantic trade relationship could lead to economic competitors in third countries not having a chance anymore, the researchers write.

But at the same time, increases in growth in the EU and the United States would considerably increase the demand for goods and services from developing and newly industrialised countries, it suggests.

"With this study we are sending a warning,” said the director of the study, Gabriel Felbermayr, according to EurActiv. “The effects on developing and newly industrialised countries are relatively harmless. And when it comes down to it, there are winners as well as losers."

However when companies compete over the same products, those from developing and newly industrialised countries will lose out, the study indicated.

Winners and losers

According to the study, the region with the most TTIP losers would be Southeast Asia, while the big winners from TTIP are raw materials-producing states as well as countries that are already well-integrated into the value chains of the EU and United States, like Brazil and Morocco.

However, considering that industrialised and developing countries often produce and trade completely different products for different sectors, the deadweight losses in so-called ‘losing states’ over the course of ten or twelve years would be under 1%, said the report.

Study director Felbermayr pointed out that the EU and the United States must ensure that mutual recognition of transatlantic standards is extended to third countries as far as possible, noting that developing countries must be included more in negotiations over new standards.

TTIP should not create an ‘economic NATO’, that simply seeks to knock out China in the fight over global leadership, Felbermayr commented.