Always, when everyone starts to write the same thing regardless of the country — it makes you think. It is especially alarming when journalists, experts and bloggers not just only write, but aggressively throw mud. We are talking about the Transatlantic Trade and Investment Partnership (TTIP) which is a free trade agreement between the European Union and the United States.
Virtually nothing good is written on TTIP. And rightly so! After all, scandals, intrigues, stories about the evil capitalist supercorporations are not only better sold, but they sound better in the titles, than the modest and restrained “Thoughts on TTIP”.
Most of the materials on TTIP begin with “Guardian said”, “Greenpeace said” and so on. The Dialogue, as a fair platform, from the start of the material gives the link to the webpage of the agreement at the European Commission portal, so that our reader could become familiar with the agreement, since if a person is going to somehow speak about something, he must at least skim through that.
Let’s now discuss this agreement. TTIP’s purpose is to improve trade relations between the EU and the United States, abolish tariffs, various regulations and other (bureaucratic) procedures that complicate trade both for Europeans and Americans.
Here is one example from the agreement: duties on imported cars from the US to the EU are equal to 10 % and from EU to the US — 2.5 %. This can be rephrased: European cars are minimum 2.5 % more expensive in the US, while American cars are minimum 10 % more expensive; minimum since it does not take into account other possible taxes and costs for foreigners.
What is the reason? It is likely that the usual lobbying and support of the national automotive industry is the reason, thus the state creates more favorable conditions for the local producers and the public must pay for it. And the overpayment occurs in any case: if a person wants to buy an American car he will overpay at least 10 % (that means 110 % of the US price), if he wants to buy a European car, in that case it is likely that it will be more expensive than if there was free competition and manufacturers would be forced to improve their product as well as the prices in order to attract customers, because the price of European cars equal to 101–109 % is competitive, taking into account the 10 % duty on American cars, and in the absence of the fee, American cars would push European manufactures, which would have been forced to reduce their prices from 101–109 % to the American 100 %.
After this example, how does the decrease of product price and increase in competition correspond to the media that says that this agreement is lobbyist and works only for large corporations? Maybe it is the other way around, don’t you think? To protect its market from excessive competition, national (inefficient) giants create hysteria around this agreement. This is exactly how it looks.
In order to more accurately express the idea of importance of free trade it should be recalled that the European Union was created as an economic and a political union to strengthen peace, with all the ensuing consequences regarding the freedom of movement of people, goods, money and so on. It would be odd to imagine today customs duties between Germany and France, and between Paris and Marseille or Berlin and Munich it would be just absurd.
TTIP carries the same goal — dumping trade barriers that increase the prices of goods, impair their quality due to weaker competition (why improve the product quality and decrease price if the competitors are forced out by a high fence of bureaucracy and tariffs?) and much more complicate the life, especially for small and medium-sized enterprises. Why them? And why giants like Volkswagen, Coca-Cola and other large companies would be afraid of the bureaucracy? They have an army of lawyers, managers and many other resources, as opposed to small companies which are just starting to work and it is incredibly hard to understand this bureaucratic and artificially created jungle.
To be honest, I was even surprised that such an agreement has not been implemented years ago. After all, the EU and USA are partners in such blocs as NATO and both regions are the economic leaders of the world. Their economic union is much more logical than a free trade area from Vladivostok to Lisbon which is suggested by Russia. It is logical because these are two relatively homogenous regions (economically, socially, legally) and the liberalization can go pretty fast and painless, unlike cooperation with corrupt countries like Russia, where laws and business customs are completely different.
The funny thing is that when people come to the stores they love to complain and wonder how everything is so expensive and how companies and corporations rip them off. When these same corporations try to decrease prices, make their products more competitive and bring customers the best product at the best price, then the people go to the streets saying that “currently, the average tariff between the EU and US is 3 % and this relatively low”. Personally, I do not want to overpay 3 % for a foreign good simply because it is foreign. Other shoppers behave similarly — otherwise companies like Walmart in the US and Aldi in the EU would not be so popular (both companies keep their product prices as low as possible), but maybe the population does not see the link between these tariffs and price decrease, or they are hypocrites who say one thing and do another.
As a result, the free market will benefit all — the competition between firms will increase, during the fight for the client product quality will improve, the price will be more attractive. Companies that are simply the best will increase their income, hire more staff and pay more taxes to the government, which, let’s hope, will spend it wisely.
In the panic articles on TTIP everyone is shouting excitedly that there will be a loss of jobs, they are negative towards the increased competition and so on. It is difficult to comment on, since the EU and the US are the bastions of capitalism (at least in words). Capitalism gives a chance to the best and this competition is an opportunity for the best to express themselves and help the society. If someone wants to live in a planned economy, feel free to do that — that is your choice. Fortunately, there are bastions of socialism like North Korea, where one could wait in a queue for bread and think about life. For the rest of the developed world socialism has gone forever in December 1991, when the Soviet Union was officially dissolved.
When a customer comes to a store he does not care about jobs, social justice and so on. He cares about his wallet. Therefore, if someone is willing to sponsor inefficient enterprises — it is his choice. Most of the people want the best quality at the best price. It would be wise to think how this quality and price are created. And they are created by the improvement of production, more efficient organization and so on.
It is amusing to hear how Americans compare TTIP with other free trade agreements. For example, Bernie Sanders says: “Not only has our trade policy cost us millions of decent paying jobs, it has led to a race to the bottom. American workers are forced to compete against desperate workers abroad who make pennies an hour.” Let’s rephrase: it is unacceptable to allow companies to improve their competitiveness by selling a product of higher quality and of lower price to the customers (that demand lower and lower prices), by hiring foreigners, who, because of their tough life are willing to work for peanuts. That is, an American, who will not have a large decrease in the quality of life due to a job loss — since he was already born in the best country on earth and has his own house, car, savings, clothes and food, social help from the government, access to medicine, best education, freedom of speech and so on. So, it turns out that this American is much more important than an Asian, African or a Latino, who are willing to work for pennies only to survive.
By allowing companies to hire foreign employees, developed countries improve the economy of these countries and help people to get out of poverty. Let’s remind the Americans and the Europeans what is poverty (with which NGOs constantly fight, at the same time bringing up the question that it is bad to outsource jobs to developing countries): an unfree country, lack of physical security, adequate housing, quality medicine, opportunity to study and develop, many do not even heave an access to food and water. But yes, one working American or European for $ 1000 is better than, say ten workers in developing countries working for $ 100 (plus a price reduction in the goods in developed countries, growth of the company which allows to employ more educated employees in the US and the EU and pay more taxes).
In general, when talking about the job loss, that means that jobs are moved to more price effective regions where people are willing to work for a lower price, because their country is less economically developed. In the case of TTIP, probably some work will be moved from the US to the less rich Eastern Europe. In return, the United States will get lower prices on their products for the whole country and an increase in tax revenues.
Many are also concerned with the quality reduction of the European products, because the environmental standards are less strict in the US. However, it is officially stated that this agreement does not affect the environmental standards of food and GMOs in the EU, it is also stated there that the standards of the EU and the US do not differ that much (here also). Personally, I trust the democratically elected governments more than journalists and various “environmental organizations” that can represent anyone’s interests.
It is also interesting to see how Europeans throw mud at the United States and their food. One might think that some kind of mutants live in the US, that degenerate from cancer and other diseases. In general, it is very unethical and wrong to manipulate the public fears of death and diseases, one should have a very good reason to do so.
It would be logical, if in the United States (and also in Canada, which is in NAFTA, a free trade agreement between the US, Canada and Mexico) cancer rates would be higher than in Europe, where the government takes care of their consumers (unlike the US). Strangely, but in the ranking of cancer for the year 2012 Denmark, France and Belgium, members of the EU, are in front of the United States. Ireland, the Netherlands (headquarters of Greenpeace) and Slovenia are also members of the EU and are ranked over Canada.
Causes of cancer are much deeper: food, physical activity, the surrounding environment, lifestyle, genetics, quality of medicine in the country — a lot of things. Meanwhile, the “greens” (especially Greenpeace), think that it is perfectly normal to scare people with carcinogens. Even though only 0.34 % of the population in Denmark was diagnosed with cancer in a year and that does not include the fact that cancer is treated (on average 50.9 % in Denmark and 59.6 % in the EU) and the numbers of recovered people gradually increase due to progress in medicine.
A lot of things can be also written on TTIP, which will probably have some bad moments in practice, but it is better to go to the European Commission website and skim through the papers on your own. Perhaps both governments exaggerate too much the benefits of TTIP (and maybe not), but it is certainly not the cause to create panic and manipulate the public opinion. With the same result we can say that all opponents of TTIP are lobbyists and large corporations that want to keep their market and not to allow competitors on their ground.
Also, due to a new wave of anti-Americanism, Europeans are ready to believe in any populist slogans (“corporations are evil”, “save the planet”, “America wants to poison us with poor quality food”) which will be happily supported by such countries like Russia (in order to split the developed world) and the populists in the UK, who see TTIP as a perfect excuse to convince the public to vote for the exit from the EU.
TTIP is criticized for being drafted under closed doors, but it is discussed by democratically elected governments and by people who get a decent salary for delving into these legal documents. The circus that the NGOs and the journalists have turned the discussion of TTIP in, perfectly shows what would have been if every trade agreement would be discussed with the population which is ready to trust anyone, but not their government.
This article does not justify TTIP, since there is no final agreement yet, and there is not much to argue about. But it is frustrating to see how different parties manipulate the population which does not even understand what the concept of “free trade” means and what it gives, although they are the main recipients of this economic benefit by being able to consume the best products at the best prices in the freest countries on earth. I hope that Europeans and Americans are not that naïve to abandon it all because of some dubious populist speeches of some organizations and people.