For a world weary of waiting for the WTO’s Doha trade round to conclude, even a bilateral trade initiative may seem like a boon, especially when “bilateral” covers half of the world’s economy. But there is a serious downside: the deal could hurt developing-country exporters unless the EU and US make a special effort to protect their interests.
The feature of the proposed pact that elicits the most excitement – its focus on regulatory barriers like mandatory product standards – should actually incite the greatest concern. Given low tariffs in the EU and the US – less than 5%, on average – further preferential reductions will not seriously handicap outsiders. But, when it comes to standards – such as those governing safety, health, and the environment – the market-access requirements are brutal and binary: either you meet the established standard or you do not sell.