NEW: TTIP FAQ: the negotiation phase – events, updates, key positions and docs

TTIP FAQ – Negotiation phase

(Transatlantic Trade and Investment Partnership)

- Latest update: 17 July 2013 -

- The pre-negotiation phase TTIP FAQ can be accessed here -

1. Upcoming meetings and events

2. Past meetings and events

3. First negotiation round: 8-11 July, Washington DC

4. State of play

The first phase – or ‘pre-negotiation phase’ is concluded with the granting of a negotiating mandate by the European Member States to the European Commission, and by the expiration of the 90-day consultation period (on 18 June 2013) of the US Congress after the Obama administration formally notified it of its intend to engage in trade negotiations with the EU. The second phase – or ‘negotiation phase’ is about to start with the first talks on July 8th in Washington DC. The US side is not yet allowed to hold ‘market access’ discussion until the US International Trade Committee (“ITC”) publishes its impact investigation (upon request of the United States Trade Representative (“USTR”), the US negotiator) on 26 September 2013.

The European Commission, as the exclusive negotiator for the European Union, has a binding obligation to duly inform the European Parliament before and after the negotiation rounds and will also share the final negotiating mandate with the INTA committee and other key documents, provided that the EU’s strategic position will not be undermined.

In the US the White House has indicated it intends to request so-called “Trade Promotion Authority” (“TPA”) or “Fast Track”, from the US Congress (where the House Ways and Means Committee is in the lead), by which the Congress agrees to a simplified consideration procedure for the negotiated trade deal, meaning that no amendments can be made and it has a limited amount of time to approve or reject the agreement.

5. Key figures/data

Data: CEPR

An ambitious and comprehensive TTIP could generate 119 billion Euros in economic gains for the EU as a whole every year. This translates on average to 545 Euros of disposable income each year for a family of four in the EU. A Comprehensive TTIP would also structurally increase salaries for both skilled and unskilled workers by 0.5% on average. Aside from wages, the agreement would also stimulate the growth of jobs due to the increased output in most industry sectors.

The TTIP would boost exports in almost all sectors, but would be especially beneficial to certain sectors in both the EU and the US. In the motor vehicles sector, EU imports are expected to go up by 42% and exports by 43%. EU exports of motor vehicles to the US would increase by 149%. Other EU sectors that have a lot to gain from the TTIP by increased sales to the rest of the world would be the metal products (+12%), processed foods (+9%), chemicals (+9%), other manufactured goods (+6%) and other transport equipment (+6) sectors.

6. Transparency

Based on Article 207 (3) and Article 208 of the Treaty on the Functioning of the European Union (“TFEU“) the European Parliament has to give its consent to any international agreement, including trade agreements, before these can enter into force. While the Parliament is not officially engaged in the negotiations with the US the European Commission has a binding obligation to fully inform the Parliaments about the progress and process of the negotiations (before and after each negotiation round). The Parliament has made it very clear in its two resolutions of October 2012 and May 2013 that maximum transparency and involvement of all stakeholders is required in orde to build trust and legitimacy of both the negotiations and the outcome:

“Recalls the need for proactive outreach and continuous and transparent engagement by the Commission with a wide range of stakeholders, including business, environmental, agricultural, consumer, labour and other representatives, throughout the negotiation process, in order to ensure fact-based discussions, build trust in the negotiations, obtain proportionate input from various sides, and foster public support by taking stakeholders’ concerns into consideration; encourages all stakeholders to actively participate and to put forward initiatives and information relevant to the negotiations;”

7. Bottlenecks

SPS measures, food & product safety regulation

Both the EU and the US have high standards for food and product safety regulation. The EU treaty includes the so-called ‘precautionary principle’ (Art. 191 TFEU) that seeks to enable a rapid response by authorities in case of a direct danger to human, animal or pant health, or to protect the environment. The principle leads to preventive decision-making (‘better safe than sorry’) in the case of risk, which means that certain products are not allowed to be exported to the EU. The EU can invoke the principle if a scientific “evaluation does not allow the risk to be determined with sufficient certainty”, and puts the burden of proof on the manufacturer of the product to show there is no danger. The EU has invoked the precautionary principle to ban the import of US hormone-treated beef. Other areas of concern are chlorine-washed chicken, cherries, molluscan shellfish, tallow, raw milk and genetically modified/engineered crops (GMO/GE). High levels of consumer protection and current practices will make it difficult for both sides to compromise or adapt standards on these highly sensitive issues.

Public procurement

The EU and the US (except for 13 of the 50 individual States) have both signed up to the revised Agreement on Government Procurement (“GPA“), currently being implemented. The GPA rules and coverage will be the baseline for the procurement chapter in TTIP. Public procurement in the US is not a competence of the Federal Government, which cannot bind public procurement markets of the individual States. This is a concern for the EU which has a major interest in the opening up of US State procurement markets and wants TTIP to be binding on all levels of government. The EU is specifically worried about existing “Buy America (n) clauses which excludes EU companies from tendering. The US also maintains a preferential regime for national SME’s (Small and Medium seize Enterprises). Under the revised GPA commitments (yet to be implemented) only 32% (178 bln. EUR) of the US procurement market is open for EU businesses (source: EC estimates). The new GPA has not changed the current commitments of the US at state level, with the coverage in the 37 States varying but excluding the procurement of cities, municipalities (in charge of procurement in the domain of utilities). The EU’s public procurement market is de jure open.

Air and maritime transport

While it is impossible for EU airlines to hold more than 25% of an US carrier and the US cabotage market is totally closed to EU business both in air and maritime transport, the reverse does not hold for the EU. This has serious negative effects also on the EU express and courier services industry. Many of the additional regulatory barriers stakeholders brought to the attention of the Commission are on the US sub-federal (i.e. state) level. For the maritime sector the US Jones Act establishes the biggest barrier. The Jones Act (formally The U.S. Merchant Marine Act 1920) is a 1920 law that protects the U.S. maritime industry from competition. It also raises costs for many other industries, keeps foreign ships from helping when disasters like the BP oil spill strike. The Jones Act requires all waterborne shipping between US ports to be carried out by vessels built in the US and these vessels have to be owned, registered and operated by Americans. As a consequence of the Jones Act and its subsequent revisions, the European shipbuilding industry including ship repair and maintenance has been effectively excluded from selling vessels to be used in American coastwise trades. If the Jones Act would be partially lifted for European ship types, the European shipbuilding industry (including ship maintenance and repair, marine equipment) will be able to enter a new ‘market’ and to compete with the US industry on a fair level playing field.

8. Intellectual Property Rights

TTIP will inevitably include provision on Intellectual Property Rights (IPRs) in order to protect the interests of European businesses in the United States and vice-versa. You can watch a recording of an event I hosted on May 15th in the European Parliament on “What role for IPR in TTIP” via this link. The European Commission has made it clear it does not want to include online copyright enforcement provisions in TTIP. An official summary of a so-called ‘civil society dialogue’ on IPRs in trade negotiations with the US (and Japan) can be read here.

European Trade Commissioner De Gucht has made the following statements in the International Trade Committee on TTIP and ACTA:

“ACTA, one of the nails in my coffin. I’m not going to reopen that discussion. Really, I mean, I am not a masochist. I’m not planning to do that.”

“If the Commission advances new basic legislation, which I think she should, we will revisit the question, but I’m not going to do this by the back door”.

The approved negotiating mandate explicitly states in paragraph 30 that:

“The Agreement shall not include provisions on criminal sanctions”.

9. Key positions

EU:

Full list of contributions submitted to a public consultation round by the European Commission following the HLWG – http://trade.ec.europa.eu/doclib/docs/2012/july/tradoc_149761.pdf

European Commission initial TTIP position papers published after the first round of negotiations – http://trade.ec.europa.eu/doclib/press/index.cfm?id=943

Association for Ships and Maritime Equipment, SEA Europe – http://www.marietjeschaake.eu/wp-content/uploads/2013/06/20130405-SEA-Europe-position-paper-for-TTIP-on-the-Jones-Act.pdf

FoodDrinkEurope – ‘Europe’s Food Manufacturers welcome EU – USA trade talks. http://www.fooddrinkeurope.eu/news/press-release/europes-food-manufacturers-welcome-eu-usa-trade-talks/

European Chemical Industry Council CEFIC – ‘Kick-off of EU-US Free Trade Agreement at G8 summit’ http://www.cefic.org/newsroom/top-story/20121/Kick-off-of-EU-US-free-trade-negotiations-at-G8-Summit/

Medica Technology Industry (AdvaMed, COCIR, Eucomed, EDMA, MITA) http://insidetrade.com/iwpfile.html?file=apr2013%2Fwto2013_1148a.pdf

IATP (Institute for Agriculture and Trade Policy) position: http://www.iatp.org/files/2013_06_25_US_EU_letter.pdf

Orgalime (European Engineering Industries Association): http://www.orgalime.org/position/negotiations-comprehensive-transatlantic-trade-and-investment-partnership

(Something missing? Please send your suggestions to marietje.schaake@europarl.europa.eu)

US:

American Federation of Labor and Congress of Industrial Organizations AFL-CIO – http://www.aflcio.org/content/download/83241/2300531/AFL-CIO+Comments+on+TTIP+%26+Request+to+Testify+May13.docx.pdf

National Association of Manufacturers, NAM – http://www.nam.org/~/media/26CB9C76E98C4284A9D45AEF21849587/JT_Letter_to_POTUS_on_EU.pdf

Business Coalition for Transatlantic Trade (BCTT) – http://insidetrade.com/iwpfile.html?file=apr2013%2Fwto2013_1127a.pdf

Medical Technology Industry (AdvaMed, COCIR, Eucomed, EDMA, MITA) http://insidetrade.com/iwpfile.html?file=apr2013%2Fwto2013_1148a.pdf

American Automotive Policy Council (AAPC) – http://insidetrade.com/iwpfile.html?file=apr2013%2Fwto2013_1151a.pdf

U.S. Food and Agricultural Groups – http://insidetrade.com//index.php?option=com_iwpfile&file=apr2013/wto2013_1196.pdf

Manufacturers Alliance for Productivity and Innovation – http://insidetrade.com/iwpfile.html?file=apr2013%2Fwto2013_1266a.pdf

Financial Services Sector – http://www.sifma.org/workarea/downloadasset.aspx?id=8589943558

(Something missing? Please send your suggestions to marietje.schaake@europarl.europa.eu)

10. Short history of TTIP

In 2011 the U.S. and the EU jointly established a High Level Working Group on Jobs and Growth (HLWG) tasked with a scoping exercise into measures and sectors that could strengthen and optimize the transatlantic economy in order to create new jobs and economic growth. As the world’s largest trading partners (50% of world GDP) with bilateral trade flows representing 33% of world trade the benefits were expected to be huge and could alleviate the burdens of the financial and economic crisis that hit both the EU and the US. Moreover, in rapidly changing world with emerging economies displaying a more active role in global trade and politics a deepened transatlantic partnership also brings strategic benefits and robustness. The HLWG issued an interim report of the scoping exercise in June, reporting good progress, and recommended to transatlantic political leaders to launch formal negotiations as soon as possible. During his state of the Union address on February 12th President Obama politically endorsed the talk. On March 20th the US Administration formally notified the US Congress of its intend to start negotiations with the EU on a trade and investment agreement, kicking of a 90-day consultation allowing formal negotiations to start upon its expiry. On June 14th the 27 EU Trade Ministers handed gave the European Commission a broad mandate to negotiate on their behalf with the Americans. The European Parliament has adopted two political resolutions to feed into the final mandate. After the conclusion of the talks all EU Member States and the European Parliament have to approve the agreement. In the US the deal is subject to Congressional approval.

11. Official documents

June 2013 – approved negotiating mandate for the European Commission of 14 June 2013 – http://www.marietjeschaake.eu/wp-content/uploads/2013/06/TTIP-mandate.pdf

May 2013 – Commission Memo on the audiovisual sector and TTIP – http://blogs.r.ftdata.co.uk/brusselsblog/files/2013/06/non-paper-guarantees-of-the-treatment-of-AV-in-TTIP-1.pdf

May 2013 – European Parliament Resolution on draft Commission Mandate – http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2013-0227&language=EN&ring=B7-2013-0187

April 2013 – European Parliament impact assessment of Commission Impact assessment of TTIP – http://www.europarl.europa.eu/committees/en/studiesdownload.html?languageDocument=EN&file=92710

March 2013 – European Commission – Staff Working Document – Impact Assessment Report on the future of EU-US trade relations – http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150759.pdf

March 2013 – Notification letter to the US Congress by the United States Trade Representative – http://www.sice.oas.org/TPD/USA_EU/Negotiations/03202013_TTIP_Notification_Letter.PDF

February 2013 – Final report of the High Level Working Group on Jobs and Growth – http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf

October 2012 – European Parliament Resolution on report High Level Working Group on Jobs and Growth – http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2012-0388&language=EN

June 2012 – Interim report of the High Level Working Group on Jobs and Growth – http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149557.pdf

12. Studies on the impact on TTIP

(Something missing? Please send your suggestions tomarietje.schaake@europarl.europa.eu)

June 2013 – ‘A Transatlantic Corporate Bill of Rights’, Corporate Europe Observatory & The Transnational Institute – http://corporateeurope.org/publications/transatlantic-corporate-bill-rights

June 2013 – ‘TTIP, Who Benefits From A Free Trade Deal?’, Bertelsmann Foundation, – http://www.bertelsmann-stiftung.de/cps/rde/xbcr/SID-05089388-192802B3/bst_engl/xcms_bst_dms_38065_38066_2.pdf

2013 – ‘EU policies on online entrepreneurship. Conversations with U.S. venture capitalists’, ECIPE – http://www.ecipe.org/media/publication_pdfs/OCC22013.pdf

March 2013 – ‘Reducing Transatlantic Barriers to Trade and Investment: An Economic Assessment’, Centre for Economic Policy Research – http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf

March 2013 – ‘Crafting a Transatlantic Trade and Investment Partnership: What can be done?’, Peterson Institute for International Economics – http://insidetrade.com/iwpfile.html?file=mar2013%2Fwto2013_0813.pdf

February 2013 – ‘Dimensions and Effects of a Transatlantic Free Trade Agreement Between the EU and US, Ifo Institut – http://insidetrade.com//index.php?option=com_iwpfile&file=mar2013/wto2013_0979.pdf

October 2012 – ‘Study on EU-US High Level Working Group’, ECORYS – http://english.ecorys.nl/dmdocuments/EU-US%20HLWG%20Ecorys%20Final%20report.pdf

2012 – ‘A New Era For Transatlantic Trade Leadership’, ECIPE – http://www.ecipe.org/media/publication_pdfs/TATF_Report_2012__PDF.pdf

2012 – ‘Regulatory Cooperation in the EU-US Economic Agreement’, BusinessEurope, U.S. Chamber of Commerce – http://ec.europa.eu/enterprise/policies/international/cooperating-governments/usa/jobs-growth/files/consultation/regulation/9-business-europe-us-chamber_en.pdf

2012 – ‘Jobs and Growth Through a Transatlantic Trade and Economic Partnership’, BusinessEurope –  http://www.businesseurope.eu/Content/default.asp?pageid=568&docid=30028

 

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