TTIP 'Trojan Horse' Deal May Lead to 'Economic Division of Europe'

Most estimates about TTIP are based on a controversial calculation model and do not fully correspond with reality, according to a study carried out by DWN.

According to the German newspaper, the signing of the agreement could accelerate the disintegration of Europe, especially in the labor market.

The EU Commission has made mainly positive statements about the TTIP's possible effects on the EU's economy, however, DWN assumes that such forecasts should be "treated with caution."

For instance, three of the four official EU studies use the same economic calculation model, namely the Computable General Equilibrium (CGE) model, which can't be used to appropriately assess the impact of TTIP on the labor market and some other spheres.

At the same time, United Nations Global Policy Model, used by DWN in its study showed that the TTIP might lead to the decline in GDP, personal income and employment in a number of European countries.

According to the author of the study, Stefanie Schneider, Europe can also expect increasing instability in the financial sector and a continuous downward trend in wages.

Moreover, "the evaluation by the UN model showed that the prospects of an economic disintegration for Europe are far more likely than those of further integration" if the TTIP deal is signed.

The TTIP seeks to establish a free trade zone between the United States and Europe. The US government started discussions on the draft deal with the European Union in 2013. The details of TTIP, including specific rules of market access, have not been released to the public.

The TTIP agreement has drawn severe criticism for the lack of transparency in the negotiations as well as for the tremendous power it would potentially give to international corporations.