Transatlantic Free Trade: The View Point of Germany

39 Pages Posted: 16 Jan 2015

See all articles by Gabriel J. Felbermayr

Gabriel J. Felbermayr

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Rahel Aichele

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: December 30, 2014

Abstract

The proposed Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States of America would be the largest preferential trade agreement in the world. Encompassing almost half of world GDP, it will have strong economic effects on Germany. In this paper, we put this trade policy initiative in its broader perspective. We argue that, despite appearances, the US-German trade potential is not exhausted. We survey existing studies and find that the project could increase per capita income in Germany by between 1 and 3%. We critically question the need for investor-state dispute settlement and argue that the TTIP will have discriminatory effects on at least some third countries. However, regulatory councils are important ingredients of the deal as they guarantee that the TTIP will indeed influence the setting of global standards in the future.

Keywords: Transatlantic Trade and Investment Partnership, preferential trade agreements, gravity, investor-state dispute settlement

JEL Classification: F130, F170

Suggested Citation

Felbermayr, Gabriel J. and Aichele, Rahel, Transatlantic Free Trade: The View Point of Germany (December 30, 2014). CESifo Working Paper Series No. 5151, Available at SSRN: https://ssrn.com/abstract=2550181 or http://dx.doi.org/10.2139/ssrn.2550181

Gabriel J. Felbermayr (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Rahel Aichele

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

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