TTIP: Transatlantic Trade and Investment Partnership would create the biggest free trade area ever. - Slate Magazine: According to proponents of TTIP, the gains of broad regulatory harmonization could be very large, amounting to an economic boost of more than $100 billion a year in the United States and somewhat more than that in Europe. But tackling these kinds of non-tariff barriers to trade is easier said than done. Deals with big positive impacts for some interests always have downsides for others. The EU, for example, is eager to change rules that prevent European airlines from flying on U.S. routes. Injecting that kind of competition would reduce the recent trend toward higher airfares. But it could also push one or more American airlines back into the cycle of bankruptcy and job losses.
The traditional case for freer trade—that the gains outweigh the losses—applies well to TTIP. But there’s also potential for enormous mischief. Business talks a big game about its desire for simpler and more harmonious rules, but in practice this means they want laxer regulations. Mutual recognition could become a platform for a regulatory race to the bottom. America could adopt European-style lax rules about bank capital while Europe is pushed to embrace American-style light regulation of hedge funds.