Transatlantic Trade and Investment Partnership: Implications to Global Wine Market

Transatlantic Trade and Investment Partnership was first introduced in 2013, with the goal of liberalization of the trade and investments, better coordination of trade by specific regulations, enhancing intellectual property protection and lifting government’s impediments to trade. This Thesis is concerned on potential implications of the TTIP on the wine industry in the European Union and particular consequences related to EU wine producers. The literature review of this paper is developed with the purpose to bring general knowledge in the matter of the TTIP. In addition, linkages of the TTIP with the political economy are provided in the latter part of this chapter. We conducted our methodological approach through the Gravity model in the international agricultural trade. The pooled linear regression analysis was utilized, where the dependent variable was wine trade intensity. We have discovered variables, which directly affect the fluctuations in the wine trade intensity, as the income, distance, exchange rate volatility or relative wine endowment of a country. Remarkably interesting result conveyed by regression analysis was the fact, that developed country’s membership in the FTA with the United States does not have significant impact on the trade intensity. The European Union is currently battling with the wine oversupply and low prices. Within the TTIP, additional amount of wine would be imported from the United States to the European Union. In addition, the conclusion of the TTIP agreement is questionable as the harmonization of the sanitary and phyto-sanitary standards in the wine sector with the lower standards of the United States might have direct impact on consumer’s health. In spite of that, the cost-efficiency would be advantageous feature of lowering wine production standards. The last part of this Thesis is dedicated to the suggestions for further research, with respect to development of the TTIP negotiations in future time periods.