March 2015 Analysen und Konzepte zur Wirtschafts- und Sozialpolitik direkt TTIP or Transatlantic Currency Cooperation? Jan Priewe 1­The TTIP project is being criticised from every direc­tion: because of its undemocratic procedures, which appear to sideline parliamentary rights; because of the risks to environmental and consumer protection; because of its negligible effects on growth and employ­ment; and because of the absence of a multilateral ­approach. At a glance Trade between the United States and the European Union is modest; internal European trade is much more substantial. While TTIP is a controversial issue, there is little discussion of another, probably much more serious obstacle to trade than tariffs and non-tariff barriers: the sharply fluctuating euro/dollar exchange rate. The euro fluctuated between a trough of 0.82 US dollars in 2001 and a peak of 1.6 US dollars in 2008, similar to the earlier DM/dollar exchange rate. These fluctuations have nothing to do with economic fundamentals, much more to do with speculation. The volatile euro/dollar exchange rate distorts transatlantic trade and capital flows. Currency cooperation between the Federal Reserve and the ECB could substantially reduce these fluctuations and so boost growth and employment. Besides the justified criticisms of the TTIP project we should not lose sight of the fact that trade between the United States and the EU is remarkably weak – even though tariffs and many other trade barriers are now trifling. 2 In the media focus on TTIP little attention is paid to the fact that trade in goods within the EU is much more substantial than transatlantic trade. If ­Germany, for example, exported as much to the United States as it does to France(its main trade partner), then, given the ratio between US and French GDP, more than six times as much would be exported to the United States as to France. To put it another way, in 2013 Germany exported more to Switzerland and to Austria than to the United States, although the latter’s GDP is ten times the size. The share of US trade(exports and imports) in the total trade of the EU27 in 2012 was only 5.5 per cent and only 14.3 per cent of trade with non-EU states overall. This low trade intensity can scarcely be explained away by higher transport costs or by tariffs and non-tariff trade barriers. Probably a much more important explanatory factor is the fluctuating euro/dollar exchange rate. Internal European currency cooperation since the end of the Bretton Woods fixed exchange rate system in 1973 – first, the“currency snake”, then the European monet­ary