The move to create the European Business Alliance for TTIP follows a similar action taken in April by American corporations, which launched the US Business Coalition for Transatlantic Trade.
Talks are expected to start as early as June and stakeholders are pressing for a quick resolution, even though it could take more than two years to sort out the differences in the world's largest trading relationship.
Speaking at the launch of the European alliance, Jürgen R. Thumann, president of BusinessEurope, said the alliance is committed to assisting governments throughout the negotiations and will do everything possible to bring the agreement to fruition.
“There are challenges ahead of us, but we are committed to working together to revive the economy and to create jobs on both sides of the Atlantic,” he said.
The alliance was formed by nine business organisations, including BusinessEurope, which represents employers’ groups, along with the American Chamber of Commerce (AmCham), the Transatlantic Business Council and the European Services Forum.
Transatlantic Trade and Investment Partnership, or TTIP, is supposed to go beyond a conventional trade deal as regulators aim to develop a framework that would ensure coherence of regulatory standards between the EU and the United States.
It is meant to address existing and future issues by creating a process for cooperation at an early stage, with mechanisms to help resolve, or at least mitigate, the impact of regulatory differences.
If left unaddressed, unnecessary regulatory obstacles and fragmentation will negatively impact the ability of companies, especially smaller ones, to raise capital, manage risk and, most importantly, create jobs and economic growth, business executives said.
If agreed the TTIP could bring significant economic gains to the EU (€119 billion a year) and the United States (€95 billion a year).
Combined, the US and EU economies – with a combined population of 813 million - account for 45% of the world’s gross domestic product and nearly 40% in terms of purchasing power.
MEPS ready to set red lines
Next week, the European Parliament is due to vote on a resolution that will set the scene for a deal with the Americans.
"What’s at stake goes very much beyond duties," Vital Moreira, chair of the Parliament’s trade committee, said during a press briefing on 14 May. “It is not going to be easy because differences are there," he said.
In recent weeks fresh disagreements have surfaced over issues such as the regulation of financial services and the openness in public procurement contracts.
Those add to a healthy list of legacy disputes involving agriculture, genetically modified food (GMOs) and French insistence that it be allowed to maintain quotas on non-French media.
The upcoming negotiations are haunted by the ghost of the controversial ACTA (Anti-Counterfeiting Trade Agreement) blocked by MEPs last year, after widespread public protests over the secrecy in which it was negotiated and personal privacy rights.
“If you spend too much time on issues you might never achieve results,” said Trade Commissioner Karel De Gucht, speaking at the European Business Summit.
“It will be a living agreement,” he added, noting negotiators will agree on the format for regulatory cooperation on a number of sectors.
Businesses concur that the TTIP will be a blueprint that will ensure more coherence.
“We are not aiming for convergence of regulation, but coherence, so that both the EU and the US can recognise each other regulation,” said Hendrik Bourgeois, vice-president of European Affairs at GE and chair of Amcham EU.
What happens to WTO and the multilateral track?
EU and US executives insist that a trade deal between the two partners would set the tone for further multilateral trade talks. The moribund Doha round of talks was launched more than 10 years ago and covers 20 areas of trade.
André Sapir, a Belgian economist and senior fellow at the Brussels-based think tank Bruegel, noted that the transatlantic deal would be just a deal of the 20th century. “We are going backward,” he said questioning how the role of the World Trade Organization will be sustained.
Recent preferential trade agreements (PTAs) show that the EU and the US are trying to export their own regulatory approaches to their partners.
Pascal Lamy, who has led the WTO since 2005, has repeatedly expressed its concern about unfairness in trade relations.
A point reiterated at the EBS by Sapir, who also questioned the message the two partners are sending to emerging economies, now that they are ready to play a role in the multilateral trade negotiations.