EU trade negotiators will come to D.C. on July 8 to meet with their American counterparts – and if all goes well we’ll see headlines afterward that read: “New U.S.-EU trade agreement opens doors for 21st century economic growth.”
Given earlier enthusiasm over the proposal at the G8 summit in Belfast, we should expect to see movement on the largest international trade agreement in history. But the Trans-Atlantic Trade and Investment Partnership (TTIP) must also grapple with the inescapable challenges of population aging.
An aging population and a trade agreement may seem an unlikely pairing – but history suggests otherwise. Historically, the best trade deals have been those that dealt with the issues most relevant to their time, like environmental protectionism, intellectual property and investment regulation. Today, as the World Economic Forum has noted, much of our economic success hinges on the “promise or peril” of an aging population.
It’s not surprising at all that U.S.-EU trade talks have come under fire. Asia, Africa, and Latin America, the argument goes, will be left out as the north Atlantic powers join forces. There is reason to question the impact that TTIP will have on the rest of the world, but such inquiry must bear in mind that, like the U.S. and EU, the entire world is aging – and the most rapid aging is seen in the developing world. If TTIP can help engage aging populations in economic growth, we will all be winners.
But what would a section on aging populations in the trade agreement look like? These four insights could guide its development:
#1: Phase Out a Standard Retirement Age
Given the remarkable increases in longevity seen in recent years, a common retirement age should be phased out. On both sides of the Atlantic we continue to abide by an age set by Otto Von Bismarck back in the long-ago 1880s, and as a result we’re depleting public and private coffers. Updating a “retirement age” to align with 21st-century longevity would open the doors to restructuring critical pension policies. Different and more flexible policies would bolster economic health from Detroit to Lisbon.
#2: Improve Our Caregiving Models
With the rapid growth of the 65+ and 85+ populations, the latter being by far the world’s fastest growing demographic segment, the ways we care for those in need must become more effective and efficient. Home-based and community-based “aging in place” models are growing throughout the world. In addition, there is an increasing recognition that, as the youth population declines in the U.S. and the EU, immigrants will be needed to fill their roles. A smarter, more flexible immigration program should be created.
#3: Examine Tax Policies and Labor Laws
Negotiators ought to look at common changes in tax policy, particularly the more egregious VAT Tax in many of the EU countries that today operate as barriers to entry and create unequal playing fields. Negotiators could also consider a relaxation of labor laws. Today, too many of them operate as barriers to the most effective care and also create unequal playing fields between America and Europe.
#4: Collaborate on Science and Health Initiatives
The trade agreement could be the basis for scientific and medical collaboration to meet the expanding health needs of aging populations. The recent UN Outcomes Document on Non-Communicable Diseases recognized this shift in global demand in light of global longevity.
The increased health challenges, on everything from Alzheimer’s to diabetes to the deterioration of eyesight and skin as we age, must be seen as more than a vehicle for treating the sick. We need to make an investment to keep people healthy and active longer so that they remain independent, participate in economic and social life, and contribute to growth. Common regulatory standards for innovation between the FDA and EMA come to mind.
So far at least, the Trans-Atlantic Trade and Investment Partnership has attracted only minimal attention, which is a shame. Done right, the partnership can set the foundation for lucrative trade partnerships while also helping to turn the global aging population into a social and economic asset. G8, the OECD, the WHO, and other organizations have recognized that the ties between population aging and economic growth are inextricable. Here’s a chance for the U.S. and the EU raise the bar.