Even though there is no clear roadmap on how to achieve regulatory cooperation – the most difficult chapter in the negotiations for a Transatlantic Trade and Investment Partnership (TTIP) – if there is "full political support, we can achieve what seems impossible", Markus Beyrer tells EurActiv.
Markus Beyrer is the director-general of BusinessEurope, the largest European business association.
He spoke to EurActiv 's editor-in-chief , Daniela Vincenti.
What do you expect from this second round of EU-US trade negotiations?
After this round, we should have more clarity where the problems lie. We expect the US to put on the table their expectations for the deal. The first round one was a general one, but the EU spelled out its concerns and interests. The US could not do it because they were waiting for the assessment by the ITC [which is going to be released this week].
We expect during this second round to know clearly what they want and after this we might come to a list of issues we can work on.
Analysts say that the first issue to work on is the elimination of tariffs…
This could be a good starting point. Precisely, we would like to reduce tariffs to zero. We don’t aim for long transitional periods. They are relatively low but there are still peaks, like in textile, so the full elimination of tariffs is important.
Do you expect some sort of consensus already at the end of this second round?
During the first round, we had the initial positioning of the EU. At the second round, I expect an initial positioning of the US. Then I’d expect the December round to deal with real topics, and then after the December round, we could have a list of real problems to work on.
Let me add on tariffs, we agree with our US partners that on both sides we have a high interest to talk about the global value chain, so this has to be taken into account too in this chapter.
But TTIP is first and foremost about regulatory coherence. What kind of agreement do we see emerging there?
Of course the regulatory coherence is a big issue of course. A strong regulatory chapter of TTIP would be a genuine “win-win” for business and for governments. This could significantly reduce regulatory compliance burdens for business and improve the time to market for new products. From a regulatory perspective, this would reduce the resource constraints on regulators and enable them to focus on the high risk issue.
Overall, I see more readiness to do it. But I don’t see a clear roadmap, yet.
Our position is that we need an ambitious approach on regulatory cooperation. Regulators of all concerned sectors must also sit at the negotiating table in order to achieve real progress.
There has been one stakeholders’ conference; we think another one might be necessary. Business is working on a joint paper on the cross-sectorial aspects of this regulatory coherence which should be ready between the second and the third negotiation round. We should be able to submit this jointly signed by BusinessEurope and the US Chamber of Commerce to the USTR and to the Commission (DG Trade).
Since you are already working on such a paper, where do you see the most convergence, in which sectors and where the most divisions?
Let me say that with the full political support, we can achieve what seems impossible. The Commission is without any doubt more open, and we have a full political support, but the devil is in the details. They will have to prove that they have a strong leadership behind it.
Where do you think there will be the most advances?
I’m not so much involved in the sectors, but from what I hear they’re doing a good job as far as chemicals are concerned, cars, pharmaceuticals.
In both my meetings with the Commission and the USTR, I have had the feeling that they had a way to manage this, so I am reassured.
We have to tackle the existing divergences, meaning we will need regulators for different sectors come to mutual recognition in the best cases, but then we’ll have to define a process for the future as well, where we will have to talk about early consultations, maybe even the possibility to defer the process, because if one side would like to regulate on a specific issue, and if the other side wants to do it but six months later, so we would need a framework to make sure we don’t drift apart.
Is there more consensus on that?
There is acceptance that we should have a system like this. That would be a cornerstone to the deal that will lead to a sustainable transatlantic market place. For the moment there is the acceptance, but no agreement on the way we will achieve it.
As a whole the aim should be to come to a system to maintain the level of divergence to the lowest level possible.
Obama administration officials have publicly suggested that they do not want to discuss financial service regulations in the TTIP talks. What is the biggest hurdle there you think?
The biggest hurdle there is that they have a very difficult legislation which is not fully implemented and it’s unclear how far it will affect it, where do they stand and our legislation is not finished either, so it’s a mix of political problems and implementation problems.
What we would like to see substantially is a negative list, to be clear on what is excluded – for the services. A negative list with limited exceptions. It should be short and explicit.
Beyond convergence, public procurement and market access is another crucial element of the proposed deal. Commission figures show that the EU makes €352 billion worth of public procurement contracts open to foreign bidders. By comparison, the US market offers only €178 billion to outside bidders and Japan €27 billion. Will TTIP revert this?
Public procurement is of prime importance for this agreement . Currently our companies face restrictions due to laws like the “Buy America” Act.
We want greater transparency on its implementation at federal and sub-federal level to establish a level playing field. I’m sure that many American governors who have found this law so challenging to implement will agree that this law cannot be applied to such an integrated Transatlantic industry.
European businesses also ask that commitments for national treatment in procurement are significantly expanded in coverage and go below existing thresholds to ensure transparent access to procurement markets.
It will be difficult for us to sell TTIP in Europe if we didn’t make significant progress on this. The argument of the sub-federal level , where states are autonomous, doesn’t stand as we had a similar problem in Canada and it appears it has been solved .
If there’s a will, there’s a possibility. This is an important point for Europe. Once you have a that signs a deal, take for example Alabama, and Volkswagen is investing there, the neighboring states compare the advantages and what you have is a snowball effect.
Do you have a sense that we will reach a deal by the end of 2014?
It’s too early to say. Our position is we want it rapidly but not at the expense of the content. Content comes before speed. There will be lots of problems, sectorial approaches, levels of regulation, we will need time.
EU Trade Commissioner Karel De Gucht said it should be a living document, something you build on. So potentially, you can have the trunk and then add the branches…
I don’t disagree with the concept but it depends on how far reaching is the framework. If the framework is already an ambitious one and we say we have to continue building on regulatory coherence I could think it could be appealing.