The Culture of Business
Developments in the negotiations of the largest free trade agreement between the United States and the European Union should move more quickly with the upcoming G8 summit on the horizon. The Transatlantic Trade and Investment Partnership (TTIP) is a proposed free trade agreement between the United States and the European Union. In his State of the Union address in February, President Obama announced that he wished to start formal negotiations of this agreement. Pre-negotiations talks have begun and the TTIP is expected to be an important topic at this week’s G8 summit, which is being held in the United Kingdom. Great Britain holds the presidency of the G8 this year and David Cameron has made it a point that trade agreement negotiations will be at the forefront of the agenda.
A study commissioned by the European Union has shown that a free trade agreement will boost the European economy by $159 billion and the American economy by $126 billion. This could represent a great opportunity for those looking to increase exports to the European Union. Trade could be easier due to lowered tariffs and lifting of non-tariff restrictions. The European Union as a whole represents the largest economy in the world, with 27 member states whose populations combined total 500 million citizens and whose GDP per capita stands at $35,000.
Another study was recently conducted by the Perryman Group, based in Waco, and it examined what type of impact this free trade agreement would have on the economy of Texas. They found that in the most conservative scenario, a free trade agreement with the EU could bring an increase of $18.1 billion in spending, $9.1 billion in output, and $5.8 billion in personal income, as well as create about 90,000 jobs in Texas.
Texas being the 14th largest economy in the world, a trade agreement with the EU could bring significant positive growth and opportunity to residents of the state. In San Antonio alone, exports to France, Germany, the United Kingdom and Spain totaled $963.5 million in 2010. The industries that were most active in exporting to these European nations were transportation equipment and business services. A free trade agreement could open up the movement of more industries and products from San Antonio to Europe. Negotiations are still in their preliminary stages, but it will be interesting to follow their development and their impact on Texas businesses looking to export to Europe.
The full study can be found here.
Source: Houston Public Radio