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THE TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP AGREEMENT (TTIP): MAKING A GOOD DEAL FOR EUROPE
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at the initiative. The fact that it will not suppose
a win-win game for all non-TTIP countries and
there will inevitably be winners and losers gives
it a strong geopolitical dimension on par with
other challenging issues such as nuclear non-
proliferation, human rights, and climate
change.
These recent moves on the part of other ma-
jor world powers will undoubtedly up the pres-
sure on both TTIP negotiating teams. If the US
and the EU want to save face and successfully
assert their role as the joint institutors of the
international rules of good governance, they
must reach an agreement soon – although not
any kind of agreement. Failure to do so would
result in an enormous loss of credibility and
prestige for both that would weaken their bar-
gaining positions with China and Russia and
undermine the effectiveness of other free trade
initiatives such the recently negotiated TPP and
The Pacific Alliance.
International turbulence: emerging market
economic slowdown in 2015
Also, the emerging market slowdown forecast-
ed for 2015-16 could have destabilizing effects
on the upcoming phase of TTIP negotiations.
BRICS countries are now facing new economic
challenges. The IMF lowered forecasts for glob-
al economic growth to 3.5 % for 2015 and 3.7
% for 2016 in its January 2015 World Econom-
ic Outlook, which stressed the flagging growth
potential of emerging markets. Forecasted
growth for China, whose economy is expected
to suffer a gradual slowdown, has been low-
ered by -0.3 % to 6.8% and growth in Brazil is
expected to fall -1.1% to 0.3%. The outlook for
Russia is even worse: a plunge of -3.5%, which,
according to the IMF, will precipitate a deep
recession. The IMF report also predicts lower oil
prices and the further depreciation of both the
euro and yen. In contrast, the US economy is
expected to grow by 3.6% and growth in the
Eurozone to slip slightly (-0.2% to 1.2%). Both
partners are set to benefit strongly from lower
oil prices, the lower exchange rate of the euro,
and an easing of lending conditions. Yet, the
Eurozone countries still face the risk of perma-
nent deflation and high unemployment. Fur-
thermore, a tightening of US monetary policy
could trigger volatility in the financial markets of
emerging countries.
Interdependence matters: the intertwined
nature of export and foreign direct investment
flows make it impossible to postulate that a
slowdown of Russia or China would spark
greater support for the TTIP agreement in the
US and Europe. In other words, while geopoli-
tics may be a zero-sum game, the world econo-
my is not. Besides, the instrumentalization of
world trade rules for geopolitical motives has its
limits: as the relative success of the WTO Doha
round meeting held in Bali in December 2013
showed, the agenda for world governance also
matters. Yet both partners seem trapped be-
tween two conflicting political imperatives: at-
tending to current geopolitical concerns and
working responsibly toward good governance.
All told, it seems reasonable to conclude that
BRICS economic slowdown is not good news
for the US, the EU, or the TTIP negotiations un-
derway.
The US and the EU: the domestic factor
The above-mentioned geopolitics and emerging
market dynamics aside, domestic political dy-
namics will also play a decisive role in TTIP nego-
tiations to be conducted during 2015 and 2016.