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EU-US Transatlantic Trade and Investment Partnership
(TTIP) MEUSAC informative session
29/04/2014
Purpose of the Session
Explain EU process of negotiations of trade agreements
To highlight what is being negotiated in the EU-US TTIP
To give an update on the status of the EU-US TTIP negotiations
Provide information on a consultation process on Investment Protection provision
2 Economic Policy Department
EU negotiation process
European Commission negotiates FTAs obo of the EU and its MS as one entity
Provisions in agreements apply to all MS
However, on services and investment MS schedule their own interests through reservations
MS must sign and ratify and the EP must give their consent once a deal is concluded
3 Economic Policy Department
Purpose of FTA Negotiations
Enhanced economic growth through increased trade in goods and services and through an improvement in investment environment;
To establish market access between the negotiating parties through the removal of trade barriers;
Mutually beneficial and ambitious cross-border treatment benefits businesses and consumers
4 Economic Policy Department
EU-US TTIP Negotiations
In terms of tariffs, trade between EU and US is already very open: i.e. tariff rates already very low;
Negotiations are a result of the need to develop a framework for dealing with the regulatory divergences that hamper Transatlantic trade in goods and services and investment flows;
This was reported in the EU-US High Level Working Group on Growth and Jobs of February 2013;
5 Economic Policy Department
Four negotiating rounds have been held to date, the latest round being concluded in Brussels during March 2014.
Both parties have other ongoing processes: e.g. EU-Japan FTA/EPA; EU-ASEAN Deep and Comprehensive FTA; Trans-Pacific Partnership (on the US side).
6 Economic Policy Department
MS Involvement in Negotiations
The Commission consults MS through: ◦ weekly meetings &
◦ direct consultations on specific issues
Other processes: ◦ EU-US TTIP advisory group composed of business organisations,
environmental and labour experts was set up to provide advice to the CION;
◦ Specific consultation processes involving the general public, e.g.:
Pre-negotiation consultations and
Specific consultations on IP provisions in TTIP negotiations
Member States cannot negotiate trade agreements
7 Economic Policy Department
Negotiations are lengthy processes which may last years
Aim of TTIP is to conclude in just about 2 years (might be unrealistic);
4th Round of TTIP was held in the first half of March 2014
8 Economic Policy Department
The Content of the Negotiations
TTIP negotiations are covering 3 areas:
1. Market Access (goods, services and investment);
2. Regulatory Issues and Non-Tariff Barriers (NTBs);
3. Rules, Principles and New Modes of Cooperation to Address Global Trade Challenges and Opportunities
9 Economic Policy Department
EU-US TTIP: State of Play
The purpose of the initial rounds was to lay the groundwork and to be sure that in every area, each side has a good understanding of what the other is trying to achieve.
A major event was the political stocktaking exercise which was held between the 17 and 18 of February 2014. Both sides acknowledged that negotiations need to be stepped up.
It is expected that much of the substantive progress should occur throughout 2014 given the clear interest expressed politically by the two sides.
Economic Policy Department 10
Market Access Trade in goods:
Trade in services and investment including investment protection
Public procurement
Area Rationale
Duties on imports and exports Eliminate all duties on bilateral trade
Rules of origin Reconcile the EU and US approaches for trade
facilitation
General exceptions Articles XX and XXI GATT
Safeguards Eliminate serious injury to domestic industry
11 Economic Policy Department
Market access: state of play ◦ First tariff offer on goods was exchanged in February
2014 and a services and investment offer should be exchanged later on in the year
◦ European Commission indicated that the first offer of US was not ambitious
◦ However, there is consensus on sharing the mutual objective of a very ambitious outcome, and a new offer should be exchanged later on in the year.
◦ Negotiations on investment protection are currently on hold in view of the EU’s consultation process on this subject
Economic Policy Department 12
Regulatory issues and NTBs Five regulatory components:
1 Sanitary and Phytosanitary Plus Measures (SPS)
Go beyond the WTO SPS Agreement
2 Technical Barriers to Trade plus
Go beyond WTO TBT agreement on technical regulations, conformity assessment and standards Coherence
3 Sectoral annexes
Specific commitments for specific goods and services are being discussed
4 Cross-cutting disciplines on regulatory coherence and transparency
Develop and implement efficient, cost-effective, and more compatible regulations for goods and services: e.g. use of early consultations; impact assessments, periodic review of existing regulation and application of good regulatory practices
5 Framework to identify opportunities and guide future regulatory coop
e.g. Through provisions for an institutional basis for future progress
13 Economic Policy Department
Regulatory issues: state of play
On regulatory issues: ◦ Some text proposals on TBTs have been circulated
◦ The elements on SPS are being sketched out to form part of a chapter.
◦ Regulators are participating in a wide amount of discussions covering the following sectors: medical devices, pharmaceuticals, cosmetics, textiles, ICT, pesticides and automotive
Economic Policy Department 14
Rules, Principles and New Modes of Cooperation
The chapter will include areas such as: Intellectual Property Rights Trade and Sustainable Development Customs and Trade Facilitation Trade and Competition Trade Related Energy and Raw Materials Small and Medium-Sized Enterprises Capital Movement and Payments Transparency
15 Economic Policy Department
Rules: state of play
Some advancement was made in all areas but discussions are at an initial stage
Areas of specific interest include: a chapters on SMEs, sustainable development and energy and raw materials
The SME chapter is innovative for EU negotiations: aim is to increase transparency for SMEs to enable greater market access for small businesses
Economic Policy Department 16
Consultation Process on IP
A consultation process with the general public is being carried out on-line by the European Commission regarding the issue of Investor-State Dispute Settlement (ISDS).
The aim of the public consultation is to better define
the EU’s approach to investor protection and ISDS in the proposed EU-US TTIP negotiations by allowing all stakeholders an opportunity to provide their reflections.
17 Economic Policy Department
Purpose is to establish an Investor-State Dispute mechanism which incorporates both transparency and balanced state regulation to implement public policy; It also clarifies the points the EU aims to improve to ensure that ISDS in EU-US TTIP guarantees the right of governments to legislate in the public interest. Composed of 12 questions covering various aspects of investor protection and Investor State Dispute Settlement issues; Process is open till 6 July 2014
18 Economic Policy Department
Consultation Process on IP
Questions cover the following aspects of IP 1. Scope of the substantive investment protection
provisions
2. Non-discriminatory treatment for investors
3. Fair and equitable treatment
4. Expropriation
5. Ensuring the right to regulate and investment protection
6. Transparency in ISDS processes
19 Economic Policy Department
Consultation Process on IP
... 7. Multiple claims and relationship to domestic courts
8. Arbitrator ethics, conduct and qualifications
9. Reducing the risk of frivolous and unfounded cases
10. Allowing claims to proceed (filter mechanism)
11. Guidance by the Parties (the EU and the US) on the interpretation of the agreement
12. Appellate Mechanism and consistency of rulings
20 Economic Policy Department
Links to IP consultation process
◦ Consultation Homepage (open until 21st June 2014): http://trade.ec.europa.eu/consultations/index.cfm?consul_id=179
◦ Consultation Notice:
http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152279.pdf ◦ Consultation Main Document:
http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152280.pdf ◦ ISDS Fact Sheet:
http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152273.pdf
◦ FAQs: http://europa.eu/rapid/press-release_MEMO-14-206_en.htm
Websites on TTIP
European Commission website for latest updates and general overview: http://ec.europa.eu/trade/policy/in-focus/ttip/
The official United States Mission to the European Union website: http://useu.usmission.gov/ttip.html
The official Trans-Atlantic Business Council: http://transatlanticbusiness.org/eu-us-trade-agreement/