Everyone wins on free trade agreements between the EU and the USA

The EU-US Free Trade Agreement would also facilitate trade for third countries. They get a set of rules to adapt to, instead of two. In addition, the agreement leads to increased demand for products from low-income countries. That is why everyone benefits from the free trade agreement, writes MEP Christofer Fjellner (M).

A new round of negotiations on the Free Trade Agreement (TTIP) between the EU and the USA will soon begin. Such an agreement would make it easier for Swedish companies to sell their goods on the other side of the Atlantic. This is important, because about half of everything produced in Sweden is exported. In addition, it will be easier for countries outside the free trade agreement to trade with both the EU and the US, at the same time as we have the chance to set the bar high for environmental and health protection in world trade. That is why we should welcome a free trade agreement between the world's two largest economies.

Removes unnecessary rule differences

The barriers to trade in the modern world do not consist primarily of tariffs, but of various kinds of regulations that make it difficult to import and export goods or services. Through free trade agreements, it is possible to avoid unnecessary differences between the contracting parties in how such things as product safety or environmental protection are determined, and instead ensure that the regulations are in line with each other. For example, the EU and the US today have different colors for ground cables. In the EU the cable is yellow-green, in the US it is white, but the quality hardly has anything to do with the color. In other areas, such as pharmaceuticals, products must be tested in both the EU and the US, despite the fact that the tests place equivalent demands on safety. The free trade agreement would thus scrap complicated regulatory differences that do not really fulfill any function.

It will not only be easier for EU countries to trade with the United States, and vice versa. Producers in third countries only need to keep track of one set of rules instead of two. A car parts manufacturer in Morocco does not have to adapt its products to both American and European standards. An EU-US free trade agreement would thus lead to third countries actually having better access to our markets than they have today.

Low-income countries no losers

A common perception is that third countries will lose out on a free trade agreement, because Americans and Europeans then choose to only trade with each other instead. That's not true. Industrialized countries and low-income countries usually export different types of products. In other words, European and American companies do not compete in the same segment as companies from low-income countries.

Increased trade between the EU and the US also does not automatically mean that our trade with third countries decreases. Trading is not a zero-sum game. A free trade agreement will benefit economic growth in the EU and the US, and with growing economies, our demand for products from other parts of the world will increase. Then we have created a situation that everyone benefits from.

A chance to raise the bar

A final and often overlooked advantage of the free trade agreement between the EU and the US is that the world's two largest economies now have the chance to set the bar high for what the environmental and health protection of the future will look like. This is important because carbon dioxide emissions, dangerous chemicals and antibiotic-resistant bacteria do not take into account national borders. We must address these challenges through international cooperation. Here, the EU and the US can show the way together.

Trade is by far the best way to spread prosperity. An EU-US free trade agreement would mean improved regulations, increased transatlantic trade and higher economic growth. Countries in other parts of the world will also have better opportunities to enter the European and American markets, while demand for their products will increase. In world trade, losers are not required for there to be winners. On the contrary, in the long run, everyone wins more free trade.

Christopher Fjellner

This is a debate article. The author is responsible for analysis and opinions in the text.

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