Economic Incentives for Indirect TTIP Spillovers

CEPS Special Report No. 94

20 Pages Posted: 31 Oct 2014

See all articles by Arjan Lejour

Arjan Lejour

CPB Netherlands Bureau of Economic Policy Analysis; Tilburg University

Federica Mustilli

Centre for European Policy Studies (CEPS)

Jacques Pelkmans

Centre for European Policy Studies

Jacopo Timini

Universidad Carlos III de Madrid; Banco de España; Centre for European Policy Studies (CEPS)

Date Written: October 29, 2014

Abstract

A deep, comprehensive and ambitious TTIP should not undermine or otherwise negatively affect the WTO and its signatories. Among other things, this means that trade diversion ought to be minimised and positive spillovers stimulated. The present CEPS Special Report provides some elementary quantification, which helps to understand the economic incentives for third countries to seek regulatory alignment with TTIP results, where relevant, and for which TTIP should be ‘open’. It focuses on ‘indirect’ spillovers and employs a rather aggregate economic approach. We find that, of three groups of countries that are important for trade with the EU and the US, the ‘closest’ neighbours (NAFTA, EEA, Switzerland and Turkey) exhibit powerful incentives to align so as to benefit from positive spillovers. This is less clear for two other groups. Of the (seven) ‘biggest traders’ (in manufactured goods, for which spillovers matter most), China turns out to have the greatest interest in alignment in selected sectors, followed by Israel, Japan and South Korea. Whereas the latter three either have or are negotiating FTAs with the US and the EU, precisely China has none and remains outside TPP as well. In terms of sectors, the chemical sector followed by electronic equipment are by far the most important, with agro-products and fish as a good third (SPS issues). However, in chemicals and electrical equipment, the TTIP negotiations so far, and recent US/EU regulatory cooperation, do not indicate an ambitious approach, which could reduce regulatory barriers to market access drastically.

Keywords: TTIP, WTO, FTA, US, EU

Suggested Citation

Lejour, Arjan M. and Mustilli, Federica and Pelkmans, Jacques and Timini, Jacopo, Economic Incentives for Indirect TTIP Spillovers (October 29, 2014). CEPS Special Report No. 94. Available at SSRN: https://ssrn.com/abstract=2516709

Arjan M. Lejour (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

Bezuidenhoutseweg 30
po box 80510
The Hague, 2594AV
Netherlands
+31 652485843 (Phone)

HOME PAGE: http://www.cpb.nl/en/medewerkers/arjan-lejour

Tilburg University ( email )

PO Box 90153
Tilburg, 5000 LE Ti
Netherlands
+31 652485843 (Phone)

HOME PAGE: http://https://research.tilburguniversity.edu/en/persons/arjan-lejour

Federica Mustilli

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres 1000
Brussels, 1000
Belgium

Jacques Pelkmans

Centre for European Policy Studies ( email )

1 Place du Congres
B-1000 Brussels, 1000
Belgium

Jacopo Timini

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, 28903
Spain

Banco de España

Alcala 50
Madrid 28014
Spain

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres, 1000
Brussels, 1000
Belgium

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