The TTIP impact assessment study by the Association for International Affairs (AMO) and the University of Economics in (VŠE) looks at potential benefits and threats of the agreement of TTIP for the Czech Republic and aims to be a starting point for further debate.
In connection with the adoption of the TTIP agreement, no significant negative consequences for the so-called deflection of trade or changes in existing foreign trade orientation towards the Czech markets within the EU are expected. Significant (however, still a low percentage) changes may occur in production / export / import at the level of individual sectors
In connection with the conclusion of TTIP, the Czech Republic has the potential to achieve a slight increase in demand for labour, which should be reflected either in a slight increase in employment, or by small wage increases. With incomplete liberalisation, the positive impact of TTIP would rapidly decline.
Fiscal impacts will consist of a slight increase in real income as a result of that slight increase in real GDP and real income of households. The real direct impact of the elimination of tariffs on the Czech state budget is negligible, since a significant portion of customs revenues is directed to the common EU budget and member states of the amount withdrawn leaving only 25% (to cover related costs), this proportion was for 2014-2020 further reduced to 20%.
In terms of the Czech position in TTIP negotiations, it is evident there is a relatively large degree of similarity between the interests of the major European exporters (especially Germany) and the Czech Republic. Therefore, it appears unlikely that, in general, TTIP would adopt solutions unfit for the Czech economy. Comparative-static estimates of the benefits of TTIP are relatively low, but it is still potentially the most beneficial way of using trade policy to contribute to the growth of European economies. Alternatives in the form of other possible FTAs would most likely lead to either lower positive macro-impacts or higher risks or are currently unrealistic. Similarly, an alternative to relying on the successful conclusion of the Doha round of WTO negotiations does not seem to be currently available.
Read the study (in Czech, executive summary in English).
Click also on an interview on Radio Zet with the economist Ilona Švihlíková, who says that the agreement is formulated in a way that will favor big corporations, especially from the U.S.
Also, Deputy Minister of Industry and Trade Vladimír Bärtl said in an interview for Euractiv.cz that "from our perspective, the TTIP negotiations are heading in the right direction." Even if all chapters were debated and closed during B.Obama's presidency, the next U.S. administration is likely to open some of the chapters, he adds. The most optimistic scenario for the Czech Republic is 1% increase in GDP and real wage.The positive effects of TTIP on trade volume and performance of the economy would be long-term, permanent. Engineering, machinery production, pharmaceutical and manufacturing industries would be the greatest beneficiaries in the Czech Republic. Also, TTIP could be a step towards global standard of investment protection. And if we could find a way how to make the Buy American act milder, all sides would benefit, Mr Bärtl said. Read the interview (in Czech).
An interview with Mr. Bärtl for Radio Praha is available here (in English).
Click also on the set of interview with experts: Carnegie Europe: Will TTIP happen? (in English).
24th October 2018
1st February 2019