This paper discusses the pros and cons of a Transatlantic Free Trade Area (TAFTA) in comparison with an informal trade-facilitating marketplace between Europe and the US. It finds considerably more cons, especially since TAFTA would be expected to produce larger, more detrimental discriminatory effects on dynamic non-member economies, mainly in Asia but also in food-exporting regions as well. Efficiency-enhancing effects are argued to be achievable under a marketplace concept which does not separate insiders from outsiders. It is also shown that in foreign direct investment (FDI) and FDI-related service trade, TAFTA seems redundant as in recent years bilateral capital and trade flows have proven to be buoyant without preferential treatment.
