Do we really need the TTIP?

The Transatlantic Trade and Investment Partnership (TTIP) is a proposed free trade agreement between the European Union and the United States.

US and EU together represent 60% of global GDP, 33% of world trade in goods and 42% of world trade in services. The barriers between the two most important economies in the world are already law, but the purpuse of the TTIP is to consolidate the relations, improving the trade between the parts, facilitating the competition and creating new jobs.

This agreement is strongly criticized for the method of the negotiation and for the potential effects of it. In fact, the negotiation is held in a confidential way, that doesn't allow the public opinion to know the details of the agreement and it doesn't facilitate a public discussion.

Moreover, this agreement could bring damages to the consumers, to the workers and to the environment. From one side, there should be specific Institutions that could judge about the litigations between States and private companies outside the national jurisdiction. This could give more power to the biggest private corporations. From the other, Us didn't ratify many agreements related to labor rights and environment protections, and this could bring a sort of social dumping against Europe.

We can draft two kinds of considerations. First, more economic freedom can raise the level of competitions in the markets and this is reflected also in the prices: but which is the social cost of it? Second, the negotiations must be subjected to the public opinion, because the effect of TTIP will deeply touch our life.

The 10th of June the European Parliament had to express an opinion about TTIP in a special session in Strasbourg. Thanks to the pressure of a huge majority in the Parliament, the vote and the discussion has been postponed. We will see how much force the Parliament and the voice of the public opinion can have in the future discussion, also considering the pressure of G7 to reach an agreement.

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Poland: the leading outsourcing destination in Europe

I want to dedicate the first post of this blog to Poland, the country in which I live.

Poland is a really interesting case in Europe, in the last years has seen a robust economic growth in a reverse trend with respect to the crisis that has touched Europe bringing a slowdown of the economy and an increase of the unemployment rate and social contrasts.

Wroclaw 

Poland has used very well the Eu funds and the Government has implemented incisive structural reforms also helped by the stability of the political system.

A key element of the Polish development is represented by the delocalization of services like accounting, customer care and IT support from the West to the Eastern Europe. In the last ten years, many corporations have decided to create shared services centers in Poland in order to develop their business, maintaining high quality of service and bringing down costs.

There are two processes to be distinguished: outsourcing and offshoring. Outsourcing is the contracting out of a business process, previously performed internally, to an independent organization from which the process is purchased back as a service. Instead offshoring describes the relocation by  a company of a business process from one country to another: in this case the process rests within the company. It often happens that a company decides to implement both processes: it can create, for instance, a internal centre (but in another country) to delocalize some internal processes, and at the same time, it can commit other processes to an outsourcing center. It also can happen that the same company creates a BPO (Business Process Outsourcing) for external clients and a Global service center for its internal processes.

It is interesting to notice that there are an estimated number of 500 offshore outsourcing centers in Eastern Europe, and Poland is poised for major expansion in the coming years (www.sourcingline.com). According to KPMG, an audit and consultancy firm, Poland ranks third for shared services centers and business process outsourcing in the world after India and China. Poland's key assets are considered its trained and educated workforce, the economic and political stability and the depreciation of the zloty (the local currency).

The importance of Poland in the outsourcing strategies is evident also from the list of the 100 most important outsourcing Cities 2012 (http://www.cuti.org.uy). Although India took 13 places in the list (Bangalore got the first position) and China 8, Poland with 3 cities, Krakow (10st), Warsaw (36th) and Wroclaw (75th), is the most represented European country.

There are two main consequences of this phenomenon. First of all, investments in outsourcing have brought wealth, reflected in new and modern infrastructures, new international power and in a reinforcement of the domestic demand. Secondly, Poland is becoming a point of attraction for international workers, pushed to leave their own Country by the economic crisis of the last years.

Ten years ago in the Western Europe there was the fear of the famous Polish plumber, ready to invade France, Italy and Germany providing a low cost service. Today instead, it is estimated that over 600 thousands foreigners are officially residents in Poland and this number is estimated to increase. It seems to be an historical victory for a Country that came out just 20 years ago from the Soviet grip.

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