Question 4: Latest progress of the TTIP negotiations. How far/close is the agreement?

What
seem to be the biggest hurdles? Building upon Francois (2013) explain main arguments why the
effects of the agreement can be rather limited for many EU countries. Ca
n you find estimates of
the effects for Slovenia?
The Transatlantic Trade and Investment Partnership is a series of trade negotiations being
carried out between the EU and US. TTIP would reduce the regulatory barriers for
trading, food safety laws, environmental legislations, banking regulations and become the
biggest market in the world.The tenth round of negotiations on the TTIP agreement took place in
Brussels, Belgium from July 1317, 2015. The negotiating teams discussed broad
range of issues about the 3 TTIP Pillars
harmonisation (market access, regulatory cooperation and rules) and met with
stakeholders to exchange views on the TTIP negotiations.
One of the biggest barrier of TTIP agreement between the EU and US constitute controversial
topics in cludes regulations concerning food, environmental safety and banking
regulations. TTIP is also a threat for smaller companies in EU, that would not be able to
compete and face increasing competition of US corporations on the market.
Findings of an analysis of potential trade liberalisation with the US show that
consequences for Slovenia's economy would be relatively small but mostly negative. The
agreement is not expected to affect Slovenia's GDP too much, however, it could affect
employment (Sta, 2015). The foreign trade of Slovenia will decrease due to a decline in
volumes with the EU but there is a potential of 35% growth in trade between Slovenia
and the USA. However, in our country most vulnerable to TTIP would be pharmaceutical,
food and motor vehicles sectors as they are highly dependent on foreign
trade. (See News, 2015)

Question 4:
The TTIP stands for Transatlantic Trade and Investment Partnership. It basically
means negotiations between US and EU, regarding the trade and investment deals.
TTIP is useful for large as well as small business, because it helps them to open up
the US to EU firms, it hels reducing the red tape that firms face when exporting and
the most important thing is that it sets the new rules, which make it easier and fairer
to export, import and invest overseas. In July 2015 there was a conference in
Brussels, where EU representatives met and disscused about 3 main pillars of TTIP.
In the first pillarthey defined all about accessing the market, in the second one it's all
about regulatory services and changes, the third pillar includes discussion about
sustainable development and labour, environment protection and investment. If we
take the case of Slovenia, threats would appear in industry of food, automotive
industry and pharmaceutical industry. The positive effects could be seen in
manufacturing, wood and machine industry.

Question 4: TTIP negotiations

The EU in USA are negotiating The Transatlantic Trade and Investment
Partnership (TTIP) since June 2013. EU governments gave the Commission a
mandate to negotiate TTIP and when the final text will be prepared, it will be
governments and MEPs who will take a final decision. Since 2013 10
rounds of negotiations between EU and US were held. The 10th round of

negotiations was held between July 13th and 17th in Brussels. Talks covered a
broad range of subjects across the three TTIP pillars: market access, regulatory
component and rules (European Commission - TTIP, 2015). However, it
seems that the discussions have barely moved on from the starting
point since the European Commission suspended talks on investor protection
rules in spring 2014. EU would like to put forward a proposal to the United States
that is different from the existing ISDS (investor-state dispute settlement), but it is
very unlikely that US would accept it. Meanwhile, the US want to seal an
agreement before the end of Obamas presidency (EUobserver, 2015). The
main effect of the agreement is expected to be an overall economic growth for
both parties because of the increased trade (Francois, 2013). But this
effect can be rather limited for many EU countries, especially the small
er ones because they wont be able to compete with big corporations from US
that will be able to freely enter the market. The estimates of the effects
for Slovenia are the following: total import and export will decrease; trade with US
will increase for 35-40%; trade with EU members will decrease; GDP will
almost not be affected; primary industries will face negative effects, while
service industries will face mostly positive effects (Damijan et al., 2014).
Question 6: Explain the relationships between the state (CPC, the Party) and large
companies in China. How does it differ from traditional market economy? Which kind of
problems are such economic structures likely to face?
The CPC -Communist Party of China, is the ruling and founding political party of modern China.
It has 68 million members, which account for only 5% of the entire population. In China, stateowned companies present 40-50% of China's total economic production and CPC has a strong
influence over them. Since, all strategic decisions in state owned companies require the
approval of Party officials inside the company, they built a "network hierarchy" over the
market and have a strong impact on operating of enterprises. It differs from traditional
market economy since China is far from being a free-market, however its vastly
influenced by political policy. The government maintains more control and is closely connected
with a business in comparison with other "market based" countries where the government
doesn't have a control over all mechanism of economy, including its currency.
The problem, that may come along with such an economic structure is that, the Party has its b
iggest enemy within itself: rampant corruption. "Hu Angang, a Chinese economist,
estimated in 2000 that every year the monetary loss resulting from corruption amounted to 1316% of the GDP." (The New York Times, 2015) CPC is involved in industry's self-regulation
and lobbying of the government, which reflects in unstable market and consequently,
unwillingness of global competitors to enter the Chinese market.

6.Explain the relationships between the state (CPC, the Party) and
large companies in China.How does it differ from traditional market
economy? Which kind of problems are such economic structures likely to
face?
The clash between the Chinese government is a typical case pointing up
the threat that the CPC was received from a heretical beliefsystem.

Public ownership, as the foundation of the socialist economic system, is

a basic force of the state to guide and promote economic and social
development and a major guarantee for realising the fundamental
interests and the common prosperity of the majority of the people.The
state owned economy has taken a dominant place in major trades that
have a close bearing on the countrys economic lifeline and key areas,
and has propped-up, guided and brought along the development of the
entire socio-economy.
6th
Answer
Relationships in China are very important. There needs to be developed
long-term and carefully nurtured relationships towards society. However,
the importance of relationships can result in corruptionandinefficiency.
Monetary policy is typically the first line of defense against
macroeconomic shocks, both internal and external, but
having an independent monetary policy is important for overall
macroeconomic stability.
Question 6:
Traditional market economy is a system in which government does not control
vital resources and state capitalism in Chinais very far from a free market, due to
the vast influence of their political policy.The government and business in China
are tightly connected in a system of statedirected capitalism, which
was established under the assumption that as the economy matures, the
government will step in action and would close or privatise them.
The Chinese changed their perspective and insteadof viewing the statedirected firms as a way towards liberal capitalism, they started seeing it
as a sustainable model. As a result, even now state backed firms are
responsible for a third of the emerging worlds foreign direct investments in 20032010. On one hand, the supporters argue that this kind of system can provide
stability as well as growth, that it can moderate the strains of globalisation
and capitalism, providing not just the hard infrastructure of roads and
bridges but also the soft infrastructure of flagship corporations. But on the
other hand, the state giants tend to soak up capital and talent, for which
studies show that might have been used more efficiently by private
companies. The giants are successful, because they can use the governments
clout to get hold of their technology, yet when it comes to innovation, they
lack competitiveness. Furthermore, in order for this system to work, it needs
a specific culture; it only works well in a competent state. Even though it may
work well in Asia, it is an entirely different picture in Brazil, India or South Africa.

It also represents a danger for investors in those markets, not only because
governments do not care that much for minority shareholders but also
because the west is running out of patience regarding the Chinese
currency manipulation, since they are deliberately keeping their currency low
to remain competitive.

Question 8: Which EU countries have experienced biggest outflows/inflows untill 2014? Which
Europe
an countries have the highest stock of foreign
born population?
In the year 2013, biggest inflows in the country were reported in Germany (692 thousands) and
UK
(526 thousands), followed by France, Italy and Spain. On the other hand, Spain
experienced the
biggest outflow in 2013 with 532 thousands emigrants leaving the country , followed by
the United
Kingdom, France, Poland
and Germany.
The highest share of foreign
born population was Luxembourg, with non
nationals accounted for 45%,
almost a half of the
total population. Luxemburg was followed by Cyprus, Latvia, Estonia, Austria,
Ireland, Belgium and Spain. "In absolute terms, the largest numbers of non
nationals living in the EU
Member States on 1 January 2014 were found in Germany (7.0 million persons)
an
d United Kingdom
(5.0 million)".
(Eurostat, 2015)