Sunday, October 13, 2013
Which country is the best partner?
In these days when the news is filled with death, destruction, delays and dilemmas that seem impossible to resolve, its easy to forget that trade still goes on.
Moreover it possible to believe that trade will not only continue, but it will even grow and expand. Proof of that observation? Look for the news that doesn’t make it to the front page. Search and you’ll discover new trade agreements being negotiated. Choices countries must make about what group to join.
The US and the European Union (EU) are working to create one. The Transatlantic Trade and Investment Partnership. Often known by its initials TTIP, will formally link 29 countries (US and 28 members of the EU) in a “comprehensive trade and investment agreement”. According to the European Commission “The EU and the US economies account together for about half the entire world GDP and for nearly a third of world trade flows. “ http://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/
Meanwhile there’s another multi country deal being negotiated. This one, the TPP or Transpacific Partnership, will connect 12 countries: the US, Australia, New Zealand, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Canada, Mexico and Peru - accounting for about a third of global economic output. (You may remember the US, Canada and Mexico are already trading partners bound together in an agreement known as NAFTA, the North American Free Trade Agreement. It is the world's largest free-trade area, producing $US17 trillion worth of goods and services. http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta.
These are only two of many groups forming. This week’s Economist (economist.com) discusses the expansion of regional trade agreements along with the decline in importance of multilateral ones. As example of the complexities that now arise it describes the decision that Ukraine must face. According to the article Ukraine is on the verge of signing a deal with the European Union. However, Russia appears o be applying some pressure to have Ukraine join its customs union with other former Soviet republics. http://www.economist.com/news/special-report/21587380-multilateral-trade-pacts-are-increasingly-giving-way-regional-ones-my-backyard
With a regional focus increasing how does a country decide what will be best for its long-term growth and development? Where to connect to support the growth in trade and jobs?