THE WORLD BIGGEST FREE TRADE ZONE

More particularly, its objective was to narrow and remove standards that were mainly divergent across the Atlantic (Eliasson, 2015). There were speculations on the positive economic gains of the agreement. President Obama involved the United States in the negotiation of a free trade deal with the European Union. The agreement that had been proposed was referred to as the TTIP which stands for Transatlantic Trade and Investment Partnership. It mainly involved 28 countries and the U. Since the EU and the U. S have both struggled with economic growth, high rate of unemployment and the huge deficit in the government, a free trade helps their economies to grow faster which reduces unemployment without the government having to spend money on the same. Reducing unemployment increases the purchasing power of the consumer which in turn improves the standards of living of individuals.

The wages for skilled and less skilled workers is also expected to rise by 0. 5% (European Commission, 2013). U. This can be explained that growth being realized in the economy of U. S and E. U means that consumers and businesses purchase products from other countries. It could also be explained that regulatory approaches which are common to these two partners will bring about a reduction in the costs for exporters to and from the markets which are also referred to as the positive spill-over effects. The economic impact of TTIP is yet to be seen though tariffs on imported products for EU and the U. S is around 3%. Reduction in this rate will increase trade. Moreover, other barriers to international trade will either be totally eliminated or reduced due to the partnership.

However, the costs of doing business might rise. The cause of unemployment may be due to stiff competition from industries from other countries which may make certain local industries to fail if they do not match the foreign competition. Twenty years ago, in 1992, the U. S entered into a free trade agreement with two countries also referred to as North American Free Trade Agreement (NAFTA). In order to encourage trade and result in the creation of jobs, elimination of tariffs an objective of the agreement between U. S, Canada and Mexico (Hufbauer et al, 2014). In addition, there were claims that the agreement altered the independence of the legislation and regulations of the government Moreover, the people opposing the TTIP believe that the agreement will cause changes in EU's legislation.

The European Commission does not approve the claim saying that it can never happen since a trade agreement is not powerful enough to undermine existing laws in various countries. Other opponents are afraid of privatization of crucial sectors such as water, education and health though they were assured that the agreement does not have such power since these sectors are under the government (Eliasson, 2015). Some of the reasons why there was opposition were because of the secrecy of the negotiations. There were people who demanded to know why the negotiations were so secretive yet it was a national affair. In addition, the wage rate for skilled and less skilled could rise. Moreover, consumers can exercise their economic freedom by purchasing anything they want despite its origin while enjoying low prices due to the competition.