Two Perspectives on TTIP’s Economic Impact on European companies: Combining a CGE Approach with Empirical Evidence from Austrian B2B Firms

The Transatlantic Trade and Investment Partnership (TTIP) is a free trade agreement presently being negotiated between the European Union and the United States. It started in July 2013 and the 12th round of the TTIP was held in Brussels on 22-26 February 2016. The TTIP aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the U.S. This paper aims to conduct a quantitative assessment of the potential economic effects of the TTIP on the economies of its members and its non-members using a global multi-sector computable general equilibrium (CGE) model in combination with empirical evidence from Austrian B2B firms. The simulation results of the policy scenario of the TTIP are presented in terms of real GDP, total exports and imports, trade balance, bilateral trade, industry output of all 27 regions considered in this study, and employment by sector of only Austria and Germany. In addition, this paper provides a comparative analysis of what Austrian companies know about the TTIP, what benefits and risks they expect from it based on the regular barometer for which 76 Austrian companies have been interviewed.