Teaching Case - Setting the Standard in Free Trade: The Making of the Transatlantic Trade and Investment Partnership

Setting the Standard in Free Trade: The Making of the Transatlantic Trade and Investment Partnership


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  • Product Description

    In July 2013, more than 150 negotiators from the European Union and the United States converged in Washington, D.C. to begin crafting what could become the world's largest free trade agreement--the Transatlantic Trade and Investment Partnership (TTIP). Billed as a transformational trade accord, the TTIP would go beyond tariffs to cut non-tariff barriers, expand trade in services, streamline regulatory standards, and incorporate trade elements to suit a rapidly evolving global economy. American and European leaders had pushed for the TTIP in the hope that it would provide a much-needed boost to struggling American and European economies, which were mired in recession and high unemployment since 2008, and buckling under rising competition from China. But the negotiators faced a sobering reality; "the reason we have not had a trade agreement like this between ourselves in the last several decades isn't because nobody thought of it," said Michael Froman, United States Trade Representative. "It's because there have always been issues that have tripped us up." Under intense political pressure and rising public scrutiny, will the negotiating teams be able to reduce trade barriers between the two economic giants? This case explores how in the absence of multilateral trade liberalization, regional trade agreements are becoming increasingly popular. With an in-depth account of the political and technical challenges in negotiating a mega regional accord, the case questions if political will or the need for economic growth can overcome longtime barriers to deeper trade integration.

    Learning Objective:
    Using the TTIP as an example of regionalism, students examine how trade agreements in the twenty-first century are driven by complex trade needs, with increasingly interconnected economies and sectors. Students learn that today's regional trade agreements have more to do with regulation than tariffs, and debate if the political economy forces driving these "megaregionals" will ultimately complement or substitute WTO-led multilateral trade liberalization.

  • Other Details

    Publication Date: August 20, 2015
    HKS Case Number: 2045.0
    Case Author: Anjani Datla
    Faculty Lead: Robert Lawrence
    Pages (incl. exhibits): 20
    Setting: United States, European Union
    Language: English
    Funding Source: Joseph B. Tompkins, Jr. Fund for Case Study and Research
    _year: 2010-2015
    _pages: 16-25
    _geography: Global
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