Potential EU-US trade agreement could generate 1.3 million jobs across EU

The Ministry of Finance and Muesac today held a public consultation seminar on a trade agreement that the EU is currently negotiating with the United States.

At its earliest, the Transatlantic Trade and Investment Partnership (TTIP) could be finalised in two years' time and it aims to reduce trade barriers between the two.

Representatives from the Economic Policy Department in the Finance ministry told those present that according to financial estimates from the European Commission, this trade agreement would increase the EU's GDP by 0.5%, amounting to around €86 billion, while the US GDP will also increase by 0.4%, amounting to €65 billion.

"The TTIP will also have a positive impact on job creation within the EU, providing 1.3 million jobs. When you take the substantial increase of the EU's GDP it will mean an increase of €545 for every family," the director general of the economic department Iman Schembri said.

At this point, PN MEP hopeful Ray Bugeja intervened and asked whether these estimates also applied for Malta.

"Does the government have its own estimates on the subject? The Commission's estimates may not necessarily mean that member states will each have their own fair share of the cake," Bugeja concluded, to which David Sammut from the Economic department answered in the negative.

"The commission's estimates were taken in general spread over all the member states. There were no studies by Maltese authorities on the impact of the agreement on individual states," Sammut said.

In his presentation, Sammut said the agreement had three aims, namely to enhance market access to goods and services, to develop a framework for dealing with regulatory divergencies and to discover new modes of cooperation between the two parties.

He said that EU-US trade is already very open. For instance, the American market represents 4% of Malta's exports, amounting to roughly €170 million in 2012, mostly comprised of electrical machinery and pharmaceuticals.

He added that however, certain concerns existed on certain tariffs, excessive red tape, burdensome customs requirements, customs duties and other formalities. He mentioned that for example, some products are held by US authorities for up to six weeks.

Sammut remarked that negotiations, which were already the focus of four rounds of discussions, will also feature a specific chapter on SMEs which are disproportionately affected by trade barriers due to lack of resources." He said that the principal objective of the EU's online consultation is to identify these trade barriers.

Another intervention from the floor came from Peter Agius, head of the European Parliament office in Malta, who said that one should go ahead with this trade agreement.

“The position of the European Parliament is clear: we should do it now. This proposal has been circling in Brussels and Washington for too long, at least now it seems that there is political commitment from both sides,” Agius said.

Currently, the US and EU economies jointly represent more than half the global GDP. The US and EU are the top trading partners of most other countries in the world and account for a third of world trade flows.

The fifth round of EU-US trade talks is expected to take place in Virginia from 19-23 May 2014, while the last round took place last month.