CETA and TTIP (or how 1 + 1 = 3)

We all know that cliché saying about the whole being greater than the sum of its parts. A study co-produced by my colleagues in Washington, TTIP and the Fifty States, got me thinking about the benefits to be had from a conclusion to both the Canada-EU Comprehensive Economic and Trade Agreement (CETA) negotiations and the recently started US-EU Trans-Atlantic Trade and Investment Partnership (TTIP) talks.

Each agreement is estimated to bring substantial benefits, but having both will deliver even more as trade barriers between each country get broken down further, especially when you look where and how a product is made.

Many products sent across a border are taxed in some way. Known as a tariff, the rate is based on where a product is made which is governed by ‘rules of origin’. Securing both CETA and TTIP would result in larger savings for businesses which operate across borders and hopefully bring a coherent approach to rules of origin.

Increasingly though the buzz is about non-tariff barriers. These are rules which set out the specific characteristics a product should have, such as its size, shape, design, packaging, and functionality. This affects everything from household goods, to cars, to food. Using a similar approach in CETA and TTIP would provide greater transparency and predictability for businesses, such creating the frameworks for mutual recognition of testing results or inspections. Helping business in this way would be a major boost for efficiency as companies would able to complete regulatory requirements just once and have them recognised in multiple jurisdictions.

Perhaps boring stuff, but I would challenge you to find a product in your house which is “regulatory-free.”

These are just two examples of why the UK government is keen to complete CETA and TTIP. These agreements, working in tandem with the North American Free Trade Agreement (NAFTA), have the potential to create an environment which not only benefits business, but also at its core allows greater consumer choice in the UK, US, and Canada.