Dr. Werner Raza:

I thank Chairman for the invitation to testify before this honourable committee. As the Chairman mentioned I have been invited to present some of the results of a study I undertook together with American academics, Professor Lance Taylor and Professor Rudi von Arnim from the New School University in New York and the University of Utah, respectively. In that study we scrutinised four widely cited reports commissioned by the European Commission, by the German Bertelsmann Foundation and a French study on the supposed benefits of the TTIP agreement. These studies were commissioned during the past two or three years. In addition to assessing the findings of these reports we also discussed some issues which are frequently neglected by trade impact assessments but are nevertheless important from our point of view.

In a nutshell, we see limited economic gains and considerable downside risks. The results of our assessment are as follows. The estimated gains of TTIP will be small, with all four studies reporting small but positive effects on real income as measured by GDP, trade flows and real wages in the European Union. Most studies estimate GDP and real wage increases to range from 0.3% to 1.3% of EU real income. EU unemployment will either remain unchanged, by assumption, in three of the four studies or it will be reduced by up to 0.42 percentage points, that means approximately 1.3 million jobs. This, however, appears unrealistic. This is an outlier. It was in the study commissioned by the Bertelsmann Foundation which uses a different methodology which has been widely criticised by most trade economists over the past year.