by Leif Johan Eliasson and Christopher T. Brooks
One could be forgiven for thinking that most Americans are aware of the large impact European politics, EU law, and European businesses have on the American economy and yet the reality is quite the opposite.
“China rising, socialist Europe falling, and the US struggling” summarizes most headlines, with public surveys revealing similar perceptions. It is a frequently encountered combination when engaging students and citizens regarding America’s role in the world, and where our problems and opportunities lay. China represents a fantastic opportunity for manufacturers, with hundreds of millions of aspiring laborers and millions of middle income earners.
It nevertheless remains an unfortunate reality that China is an authoritarian regime with mounting housing and banking problems, a hollow social safety net, widespread corruption, extensive intellectual property infringements and very restrictive rules on foreign investments. Yet as many business leaders and academics are well aware, American’s misperceptions and ingrained beliefs die hard, even as much of the rest of the world has changed and moved on. The market place of ideas and products is the world, not nation-states, and nowhere is this development clearer than in transatlantic relations.
The ongoing negotiations on a Transatlantic Trade and Investment Partnership (TTIP) represents the best opportunity in this century for businesses and citizens, on both sides of the Atlantic, to flourish. More jobs, economic improvements, and international influence will result from a successful and complete TTIP than from any other transatlantic initiative. States like Georgia will also benefit tremendously from TTIP.
First, beyond the long-standing cultural connections, which we do not expand upon here, it is important to remember that foreign direct investments into the US (which create jobs) come overwhelmingly from Europe. For every $1.00 invested in America from all of Asia, Africa, South and Central America (6 billion people) we receive $4.50 from Europe (519 million people). To put it differently, Europeans invest 42 times more per person in the US than do Chinese, Japanese, Indian, or Brazilians combined. American companies in turn sell more to Europe, and invest more in Europe than in all of Asia and Africa combined. Thus, it is essential for transatlantic relations between the US and Europe, not just the successful northern countries (Germany, the Scandinavians), to improve. This is finally manifesting itself in many countries’ far-reaching public sector reforms, cuts in expenditures, and private sector initiatives.
A successful TTIP would boost investments. This is a matter worth seriously considering, as the US is losing attractiveness as an investment destination in some corners of the globe. Thirteen years ago the US received a greater share of global investments than Europe; by 2012 America’s share had dropped to 17%, while Europe’s had increased (to 34%). TTIP could, if successfully completed, result in at least one million new American jobs and almost 0.6% increase in annual growth; for a state like Georgia. That would mean tens of thousands more high-paying jobs and millions in additional tax revenue. The TTIP aims to achieve these goals through deregulation, harmonization of things like product testing and certification (a BMW or VW is no less safe to drive in Savannah than in Munich even if only crash-tested in Stuttgart) and recycling (here we can learn from the Germans); mutual recognition of labor practices (it is difficult for American unions to argue that Finnish or Swedish labor standards are too low or unfair), expanded European access to public sector contracts, and elimination of tariffs on imported goods. Even if all these goals are not achieved, any progress will increase transatlantic investment and the jobs that come with it. The US and EU account for roughly 50% of the world’s economic output, and growing countries and companies around the world want access to their markets. TTIP can set the global standards by which others play.
The harmonization of EU and US technical standards would also provide the basis for global standardization, as all countries want access to the EU and US markets. As American and European businesses expand globally; common or mutually recognized transatlantic regulations help counter and may in fact lead to improvements to China’s problematic business practices and exploitation of regulatory differences across the Atlantic. Investors will feel more confident investing on either side of the Atlantic, and less fearful of being outmaneuvered by Asian or Latin American companies operating under different production and service requirements.
Georgia receives more than half of its foreign investments from Europe, who create nearly 100,000 jobs, of which a fifth stem from German companies. Nearly all of these jobs have higher average compensation and benefits than their American counterparts. The EU constitutes the largest market for Georgian service (32%) and goods (18%) exports (with Germany being the largest recipient of Georgian exports), and a successful TTIP would increase exports nearly 30% and generate up to 26,000 new jobs according a recent study.1 On the German side, a study by The Bertelsmann Stiftung estimates a successful TTIP with complete removal of tariffs and common or harmonized regulations in manufacturing sectors would create 98,000 new German jobs in the manufacturing sector, with an added value of output worth €7,4bn annually.2
Finally, one should not forget that aside from the economic rewards, TTIP negotiations will also highlight, more than ever, remaining cultural and ideological differences on issues such as agriculture, stem cell and pharmaceutical research, and corporate regulations. This may finally spur a realistic, fact based debate of alternative models of regulations on both sides of the Atlantic, which can actually garner sufficient public support. Likewise, negotiations may bring to the public’s attention vast similarities in goals, policies, and practices across Europe and the US; similarities shown to be far greater than those with any other country or region.
1“TTIP and the 50 states: jobs and Growth from coast to coast” The Atlantic Council of the United States, the Bertelsmann Foundation, and the British Embassy in Washington, 2013 and Daniel Hamilton and Joseph Quinlan, The Transatlantic Economy 2012, Volume 2 Country-by-Country. Center for Transatlantic studies John Hopkins University and Paul H. Nitze School of Advanced International Studies. 2Transatlantic Trade and Investment Partnership Who benefits in Germany from a free trade deal?” GED Shorts issue 2, 10/04/2013 Bertelsmann Stiftung.
About the authors:
Christopher T. Brooks:
Associate Professor of history at East Stroudsburg University. He co-authored the recently published German Employment Laws: 618 Questions Frequently Asked by Foreigners and is proprietor of The Bill Holland Legal and Business English, LLC.
Leif Johan Eliasson:
Associate Professor of political science, East Stroudsburg University, PA. He is the author of America’s Perceptions of Europe and Handbook of Military Administration (with Jeffrey Weber). An article assessing progress on the TTIP is forthcoming in the Journal of Transatlantic Studies Vol.12, no. 2 (2014), and he blogs at