Reducing Transatlantic Barriers to Trade and Investment — the CEPR economic assessment

What this document is

The report is a formal economic assessment commissioned by the European Commission and produced by the Centre for Economic Policy Research (CEPR), a London-based network of economists. Published in March 2013 under framework contract TRADE10/A2/A16, it estimated the likely gains from a wide-ranging trade and investment agreement between the European Union and the United States, the deal that became known as TTIP.

Despite the filename tradoc_150737, this is not a US Army document. "tradoc" is the European Commission's own shorthand for a trade document in its DG Trade library; 150737 is simply the catalogue number.

What it covers

The study uses a computable general equilibrium (CGE) model of the world economy to test several negotiating scenarios, from limited tariff cuts to a comprehensive agreement. Its main themes are:

• current trade and foreign direct investment flows between the EU and the US;
• the pattern of remaining tariffs, which are already low across the Atlantic;
• non-tariff barriers, such as differing regulations and standards, which the study treats as the main obstacle;
• modelled effects on output, trade, wages and the wider global economy under each scenario.

A central argument of the report is that because tariffs are already low, most of the potential economic benefit comes from reducing regulatory and other non-tariff barriers rather than from cutting duties.

Headline findings

Under its most ambitious scenario, the study estimated meaningful but modest gains for both economies, often summarised in the public debate as an annual boost of around 0.5% of EU GDP and a smaller share of US GDP once the agreement was fully in place. These figures were widely cited, including the frequently quoted estimate of an income gain equivalent to several hundred euros a year for a typical European family of four.

The authors stress that such numbers are model-based projections of a hypothetical agreement, sensitive to assumptions about how far regulatory barriers could actually be reduced. They are best read as an indication of scale rather than a precise forecast.

Why it matters

This report was one of the most-cited pieces of evidence in the TTIP debate. Supporters used its projected gains to make the economic case for the deal; critics questioned its assumptions and the treatment of non-tariff barriers. Understanding what the study actually modelled helps separate its cautious, conditional findings from the headline numbers that circulated in the press.

Energy featured in the wider TTIP discussion too, notably around transatlantic trade in liquefied natural gas, which is one reason a document like this was referenced from an energy-focused site. The negotiations themselves stalled from 2016 and the agreement was never concluded.

Frequently asked questions