March 26, 2015

Free trade deal between EU and US "unlikely" this year

The European Union and United States are likely to miss their year-end target to sign the world’s largest ever free trade deal.

Latvia’s Foreign Minister Edgars Rinkevics has said that negotiations over the Transatlantic Trade and Investment Partnership (TTIP) are "not likely" to be concluded during the current EU presidency.

Meanwhile, EU trade chief Cecilia Malmström has voiced intentions to conclude talks under Obama’s administration, which concludes in January 2017.

Talks around the TTIP began at the beginning of last year, as policymakers looked for ways to reduce regulatory barriers between the two economic blocs. The aim is to harmonize regulations affecting the majority of goods and services, though negotiations to date have been met with strong levels of skepticism.

Janneke Pieters evaluates other impacts that trade liberalization can have on labor markets, namely its effect on gender inequality. She discusses how reducing regulation can increase competition in labor markets, which can in turn reduce overall levels of discrimination by employers. International trade can also boost wages in certain sectors, which can be an advantage for countries with a strong stake in female-intensive industries.

There are, of course, limitations to what international trade regulation can achieve. L. Alan Winters writes that policymakers cannot expect trade policy to impact significantly on overall employment; in fact, it can have a negative impact on job levels in export-oriented sectors. Policymakers needs to focus more on aggregate economic balance and labor market institutions to see notable impacts on job rates.

Read more here.

Related articles:
Trade liberalization and gender inequality, by Janneke Pieters
International trade regulation and job creation, by L. Alan Winters