In today’s Cato Online Forum essay, Per Altenberg from the Swedish Board of Trade makes an interesting political economy argument and a compelling practical case for why the Transatlantic Trade and Investment Partnership will be a tough slog. Altenberg argues that the old model for trade negotiations, premised as it is on mercantilist reciprocity, which leverages the interests of exporters against import-competing industries to secure domestic support for liberalization, is no longer functional in a world where trade is dominated by intermediate goods trade along global value chains. Today, openness to trade is seen as essential, and trade negotiations cover matters that probe deeply into domestic regulatory space. To sum up, Per writes:
Traditional 20th-century reciprocity in market access negotiations will thus not be an effective mechanism in the context of 21st-century deep integration negotiations such as TTIP. Instead, deep integration issues require new approaches to trade negotiations.