The EU: The TTP’s Missing Link

Original Content created by: Lina Abisoghomyan

Courtesy of Forbes Magazine

Courtesy of Forbes Magazine

The Players

The United States- has maintained a civil and productive relationship with China driven by their mutual interests and capacities for production in both numbers and quality because of regulation on the international market. As a dominant and growing hegemonic power, it is important for the United States to maintain its place as both a primary producer of goods and a regulator of standards, which can largely be incentivized by allowing smaller, and potential-full developing countries to trade with it.

 The East Asian countries- are a group of mid-sized, labour-rich countries that have needed a parent country that would outsource to them.

 China- the world’s second largest economy with a government highly involved with, yet highly skeptical of the Western world, China has access to one of the largest and most agile labour force in the world, with a demand for its goods that is, on the aggregate, largely inelastic. 

 The EU- The reason the EU cannot, and has not taken the initiative to, join the TPP can be attributed to its stance on China. The EU is much more accommodative to China’s demands, and turns a blind eye on many standards that it publicly goes to condemn. Though this reason may seem reason enough looking at China’s position today as the world’s second largest economy and threatening to surpass the US, if reguarded in the long term Europe stands a chance to fall behind as the Eastern Asian bloc is one with incredible promise in its growth and development, particularly with this new and more open policy that puts it on the good side of the United States.

Courtesy of Zero Hedge

Courtesy of Zero Hedge


The Background

The TTP is a large-scale economic agreement involving a number of nations, and most notably excluding China, and the Western hemisphere, including the United States, Mexico, and Canada. This agreement is not only important because of its scale, but because of its effect on its participants’ short and long term economic and security realities.

The TTP redefines standards in terms of labour and production, as well as most notably and importantly in the environmental sectors as well as the realm of the new-and-coming topic of intellectual property.

Courtesy of the United States Trade Representative's office

Courtesy of the United States Trade Representative's office

The Story

Economically speaking, the TPP might become a sort of model or template, widely accepted, and put in question certain current standards in the EU. These standards could go either way, being stricter or less strict, because of the new norm of this large scale agreement. One of the strictest adjustments is expected to be in the realm of intellectual property.

The TPP agreement may steal business from the EU, as 30% of EU’s external exports were to TPP countries.

The TPP is very strict on labour and environmental standards. It is seen as the US trying to re-engage itself in the region, blocking the path of the EU to leverage this goldmine for its own purposes by getting the first large-scale deal like this. 

The TPP ratifies a certain ease on barriers at the border for many types of industrial products, including raw goods, this would allow for better collaboration of international enterprises, as well as cultural and social collaboration between the US and East Asian countries. This leaves the EU at a disadvantage as a large world power alongside the US at it struggles to develop and encourage similar commitment and collaboration with its own enterprises and peoples. 

The largest issues the EU would have with such heavy US involvement aside from a raised bar of standards that they would be pressured to submit to, would also be the constant easier access the American lobbists would have to large and important Asian market producers. It can also, with access to the TPP, hope to gain much influence in the implementation of its interests in Asia and around the world, as an extention, particularly in its growingly innovative technological fields.

The TPP model is different from that of the EU’s mercantilist and dependent model that it practices with its allies. The TPP model features, rather, a more public and multilateral approach. 

The EU’s absence from the TPP should not be taken as a sign of its absence in the region. It has signed, or is in the process of signing agreements outside the scope of the TPP with each of the TPP countries, and will continue to participate in the region. Also, with its friendly stance on China, this gives it a favourable position in Taiwan, which could be a key to reaping even more benefits from the mainland.

 European defense is undoubtedly dependent on its neighboring countries, and the status of the global political and economic atmosphere.

Defense spending in the EU will undoubtedly increase steadily as it struggles to keep up with a rising standard and a breadth of possibilities developed and introduced by the US-West into the developing world. Defense firms may have to collaborate with allies they never thought they would join forces with, such as Russia, indirectly through China.