What are the benefits of the proposed TTIP?
The Transatlantic Trade and Investment Partnership (TTIP) is considered as the best option for the American nation, which has been struggling to enhance its economic growth. Unlike other economic blocs, TTIP promises huge economic returns for both the US and EU nations without incurring any extra cost. TTIP will open up new trading opportunities, which will translate to creation of more jobs for the partnering nations (The USTR, n.d). As it is, the member nations will need to relax their immigration policies, which will then allow individuals to move freely within these nations in search of labor. In essence, the partnership will enlarge the trading territory, which will translate to an enlarged market to sell products and services. Moreover, TTIP will be beneficial to its members, as the increased revenue from an expansive market will help the respective governments to meet their budget needs and thus reduce the budgetary deficits Chapter 6). Moreover, the proposed TTIP offers its members a free trade agreement, which is crucial in fostering economic growth for all the partners.
Can you think of any drawbacks associated with the TTIP?
The TTIP seems quite a lucrative trading bloc yet it may have several drawbacks. For one, it promises such a high economic return something that may not be realistic since the EU has failed to produce those results in the past owing to its near collapse. Moreover, business may not be as usual considering that manufacturers will be forced to adhere to two different sets of safety and trading regulations (Chapter 6). The increased demands will in turn increase the cost of production and conducting international trade, which will come in the way of enhancing profitability and sustainability. Additionally, the local manufacturing industries will be forced out of business considering that the prices of consumer goods will go down drastically due to increased competition and reduction in tariffs.
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Chapter 7
Who benefits from the subsidies to US sugar producers? Who loses?
The federal subsidies on sugar benefit the sugar producers. For one, the farmers are assured of a constant market since the government buys 85 percent of the sugar while allowing for imports of the remaining 15 percent at preferential prices (Chapter 7, 211). Moreover, the government ensures that the sugar producers sell their sugar at relatively higher prices as the government sets the floor price for sugar. Furthermore, the government ensures that the farmers reap big from their produce as the major sugar producing countries are kept out of flooding the market.
The consumers and the small candy producers are the losers following the subsidies. The consumers are forced to buy sugar products at a relatively high price since the government sets the floor price for sugar. As a result, the consumers spend between $ 2.9 to 3.5 billion to buy sugar which is very costly. The small candy producers stand to lose as the cost of production is increased by the high prices for sugar. In turn, these candy producers are forced to move their industries offshore or relocate to other countries with cheaper sugar (Chapter 7, 211). The government is considered a loser because of these subsidiaries considering that the policies that were placed in 2008 are still in place in spite of varying economic conditions.
Do the benefits of U.S. government support to the U.S. sugar outweigh the losses?
No. The high prices of sugar affect the majority of consumers negatively while favoring about 4,700 sugar producers. Moreover, the US misses job opportunities as the candy producers chose to relocate to other countries (Chapter 7, 211). Furthermore, the government spends too much money on small industries while ignoring the large manufacturing sector, which employs most Americans. The money that is used to compensate for the fall in sugar prices could be used for other critical federal and state programs such as health and education.
References
Chapter 6. Creating the World's Biggest Free Trade Zone
Chapter 7. Sugar Subsidies Drive Candy Makers Abroad
The Office of the United States Trade Representative. (n.d). Transatlantic Trade and Investment Partnership (T-TIP). The USTR Archives. Retrieved on 24 January 2018, from https://ustr.gov/ttip
