Italy will benefit the most from EU-US trade pact

Italy stands to be one of the countries that will benefit the most from new EU-US trade pact called the Transatlantic Trade and Investment Partnership (TTIP).

The TTIP is a trade deal in which Italy stands to be the “biggest potential beneficiary”, says Pascal Lamy, the former director-general of the World Trade Organization (WTO).

Italy, being the third largest exporter in the EU (after Germany and France) would benefit greatly from a free trade deal which would further unite the world’s largest economies.

Within Italy, those who stand to benefit the most are small and medium-sized companies, especially those working in sectors such as textiles, with large overseas demand and little regulatory differences between the two economic regions.

“If you look at the numbers, the production systems and export composition of Italy – especially among small and medium-sized businesses – this is good news,” Lamy said at the East Forum Conference held in Rome.

At the root of most of the controversy is closing the gaps between the regulatory restrictions between the EU and the United States. Still, decreasing non-tariff barriers is a good thing for the world economy and estimates by the European Commission say 80% of the 0.5% GDP impact of the deal is due to decreasing these restrictions.

The EU proponents of the deal have made claims that the agreement will, as most free trade agreements do, create jobs and reduce the cost of living.  At the same time, opponents argue that it’s a threat to public services and favors big corporations.

“The old narrative of job creation doesn’t work anymore,” Lamy said.  In fact, the old type of trade agreements don’t work in today’s more modern, open and global economy. This is one reason why the TTIP is focused more on easing trade, rather than on the removal of tariffs.

“Italy is certainly a country that is focused on exports,” said Paolo Gentiloni (Foreign Minister at the time).  In 2014, this was clearly evident with Italy having exports at 24.3% as a portion of GDP compared to France at 20% and Japan at only 15%.

“We are an open country, focused on trade, commerce, dialogue and cultural interaction…this characteristic is recognized nearly all over the world.”

Taken from Angela Giuffrida’s article appeared on The Local.