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The Transatlantic Trade and Investment Partnership and the Role of Computable General Equilibrium Modelling: An Exercise in 'Managing Fictional Expectations'

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  • Ferdi De Ville
  • Gabriel Siles-Brügge

Abstract

Negotiations between the world's two largest trading partners, the European Union (EU) and the USA, on a Transatlantic Trade and Investment Partnership (TTIP) have been ongoing since July 2013. Anticipating the controversy the agreement has sparked, EU trade policy-makers in the European Commission have put considerable effort into discursively framing the agreement on their terms. Drawing on computable general equilibrium (CGE) models of the agreement's likely impact, the central claim has been that the TTIP promises to deliver much-needed 'growth and jobs' without stretching the public purse at a time of austerity. Our main argument in this article, drawing on the insights of the economic sociologist Jens Beckert, is that these CGE models - and the figures they have produced - represent an important exercise in 'managing of fictional expectations'. The models make overly optimistic predictions about the ability of the EU and the USA to eliminate regulatory barriers to trade - which are unlikely to be realised in the face of considerable political opposition - and also downplay the potential deregulatory impact of an agreement. Rather than act as a reliable guide to future outcomes, we thus show that these models serve the pro-liberalisation agenda of the European Commission and other advocates of the TTIP.

Suggested Citation

  • Ferdi De Ville & Gabriel Siles-Brügge, 2015. "The Transatlantic Trade and Investment Partnership and the Role of Computable General Equilibrium Modelling: An Exercise in 'Managing Fictional Expectations'," New Political Economy, Taylor & Francis Journals, vol. 20(5), pages 653-678, October.
  • Handle: RePEc:taf:cnpexx:v:20:y:2015:i:5:p:653-678
    DOI: 10.1080/13563467.2014.983059
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    References listed on IDEAS

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    1. Raza, Werner & Grumiller, Jan & Taylor, Lance & Tröster, Bernhard & von Arnim, Rudi, 2014. "ASSESS_TTIP: Assessing the claimed benefits of the Transatlantic Trade and Investment Partnership," Policy Notes 10/2014, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
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    1. repec:mes:ijpoec:v:45:y:2016:i:4:p:257-293 is not listed on IDEAS
    2. Raza, Werner & Taylor, Lance & Tröster, Bernhard & von Arnim, Rudi, 2016. "Modelling the impacts of trade on employment and development: A structuralist CGE-model for the analysis of TTIP and other trade agreements," Working Papers 57, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    3. Pierre Kohler & Servaas Storm, 2016. "CETA without Blinders: How Cutting “Trade Costs and More” Will Cause Unemployment, Inequality, and Welfare Losses," International Journal of Political Economy, Taylor & Francis Journals, vol. 45(4), pages 257-293, October.

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