EU and US mull digital economy chapter in TTIP

Trade Commissioner Karel de Gucht. December 2013. [WTO/Flickr]

European Union and US negotiators will discuss whether to devote a chapter of the Transatlantic Trade and Investment Partnership (TTIP) to the digital economy, as they have done for small-to-medium sized enterprises (SMEs).

Both the EU and US are mulling whether the digital economy is better handled across a number of chapters devoted to the different sectors it has a part in or by a stand-alone section.

SMEs will have a dedicated chapter of the landmark trade deal. Sources indicated significant progress had been made towards a text agreed by both sides during this week’s sixth round of negotiations in Brussels. There is a dedicated TTIP negotiating group for SMEs.

EurActiv has learnt the US has sent fact-finding teams to Germany, Luxembourg and Austria during this week’s sixth round of negotiations.  The teams will meet with successful SMEs to discuss what they need from TTIP and how best to remove barriers to market access on both sides of the Atlantic. SMEs are often described by the European Commission as the backbone of the economy and drivers of growth and job creation.

The digital industry would like to see a similar level of attention paid to their sector. The idea was not discussed in detail by negotiators during this week. Talks focused on laying the groundwork for a future agreement on professional services, including, for example, auditors and accountants and architects.

Sources told EurActiv that both the EU and US are open to the idea of a digital chapter, should the evidence justify it. The European Commission sees the digital economy as part of the solution to Europe’s sluggish growth and high unemployment.

DigitalEurope called for the dedicated chapter when they met with lead negotiators on Wednesday (16 July).

The industry wants a short chapter, focusing on areas in which rapid progress can be made. It would not cover controversial political issues such as data protection and flows of data in the interests of securing the agreement.

The chapter would focus on issues specific to the digital economy where joint standards can be swiftly agreed. The industry hopes the eventual TTIP chapter could then be replicated across free trade agreements with other countries.

E-labelling is a way of informing consumers about the electronic products they buy. It involves displaying information on the screen of the device, rather than attaching a CE or FCC sticker or similar marker on the casing. For producers – especially small ones - selling their wares in both markets it would mean a significant saving in terms of money and time, DigitalEurope said.

“If the EU and US could agree on a common approach to e-labelling this would make it easier for producers to sell their products in both markets, and better, more up-to-date information for the consumer,” said John Higgins, director general of DigitalEurope.

M-health, smartphone apps to increase fitness, is another growing sector that would benefit from agreed transatlantic standards.  E-accessibility, which is about making technology more accessible for the elderly and people with disabilities, is another.

Separately, the EU and Ecuador Thursday (17 July) sealed a trade deal in Brussels. The Commission said the agreement will allow Ecuador to benefit from improved access for its main exports to the EU – fisheries, bananas, cut flowers, coffee, cocoa, fruits and nuts.

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Mike Parr's picture

Couple of observations: at least with respect to German mittelstand - they already do business in the USA. I'd question why other SMEs need specific chapters in the TTIP - this smacks of desperate stuff given mounting opposition. "How best to remove barriers" suggests there are any - examples please.............. is that silence I hear?

The examples quoted: "M-health, smartphone apps to increase fitness" are pathetic - how & why would they "benefit" from "agreed transatlantic standards"

With respect to the digital economy two areas come to mind:

First: the spying activities of the USA and its poodle the UK/GCHQ (motto: "always listening to our customers"). Pervasive and unnecessary are two words to describe this and a very good reason to suspend or cancel TTIP until there are substantive remedies.

Second: the failure of large US companies, Apple, Amazon, ...... amongst others, to pay their taxes in Europe. There is a substantive case to be made that companies that fail to pay taxes should not be able to enjoy societie's benefits, e.g. police services, law courts that kind of thing. The suspension of such services (leading to people taking direct action on the companies involved - I will leave readers to imagine what direct action could be) would given a timely attitude adjustment to US digital companies who could collectively be called "Tax dodgers R Us".

TTIP, not needed and not wanted: TTIP delenda est.

A Londoner's picture

You suggest two reasons for not proceeding with the TTIP. Neither of which make sense.
1. US spying. The German government seems happy to proceed with the TTIP but Mike Parr knows better.
2. US companies fail to pay tax. You confuse US companies with the US government. The US government via the G7 and G20 agreements on global tax avoidance seems as eager as France to tackle this issue. This more a fight between Luxembourg, Netherlands and Ireland in one corner and the UK, Germany and France in the other. Representing it as the US v EU is very misleading.

Mike Parr's picture

"Representing it as the US v EU is very misleading."
I'm not so sure - the UK is a poodle of the USA (e.g. the USA funds GCHQ - £70million/year) as well as a major centre for tax dodging both in terms of the companies that do it (them all) and the companies that facilitate it (PwC E&Y etc etc). The major companies dodging taxs are US ones (the recent bid by Pfizer was funded wholly by unremitted profits) . Thus cancelling TTIP because US companies don't want to pay taxes in Europe seems to me as good a reason as any - certainly better than the bullshit fed out by TTIP supports wrt the "benefits".

A Londoner's picture

You do love a Manichean view of the world!

I am not denying that many large US companies are doing the tax dodging but they seem to be mainly dodging US taxes. It is worthwhile doing some searching for information about using the Netherlands or Luxembourg as tax havens.

Mike Parr's picture

The last word in TTIP is "partnership" - I am involved in lots of business partnerships. One of the things that does not happen is me spying on my partners (or vice versa). If I /they did it would be a reason to break the partnership on the basis of a complete lack of trust. The spying by the USA shows that it does not trust the Euros - this is a reason not to mover forward with the TTIP until such time that spying is stopped (idealistic I know).

Thanks for suggesting I "do some searching" wrt tax structures - international taxation is something I know a great deal about - and indeed NL and Luxy have evolved structures to facilitate tax dodging & US companies take advantage of them. This is a reason to stop TTIP untl such time that the member states have got their act together wrt tax dodging. TTIP will make a bad situation worse.

I don't have a Manichean view - I try and see the world the way it is - shades of grey mostly. TTIP will make things worse - not better. Can it.