The European Commission launched on Monday (27 January) a special advisory group of experts to give fresh input on all issues being discussed at the EU-US negotiating table for a Transatlantic Trade and Investment Partnership (TTIP).
“The creation of this group confirms the Commission's commitment to close dialogue and exchange with all stakeholders in the TTIP talks, in order to achieve the best result for European citizens,” read a Commission press release.
The group, composed of 14 advisors from different consumer, labour and business groups, will help the EU executive to frame the discussion at the negotiating table so that Europe’s high standards of consumer and environmental protection are fully respected.
This is the second move taken by the Commission to ensure transparency and avoid a replay of the Anti-Counterfeiting Trade Agreement (ACTA) which was rejected by the European Parliament after it was approved by all member states.
Last week, the Commission also decided to postpone negotiations on an investor-state dispute settlement mechanism and launch a consultation on which to build future talks on the controversial issue.
The so-called "investor-state" dispute clauses empower EU and US-based corporations to lodge private legal cases directly against governments. The Commission's initial proposal enabled US companies investing in Europe to by-pass European courts and directly challenge governments at international tribunals, whenever they find that laws in the area of public health, environmental or social protection infringe their right to do business. EU companies investing abroad would have had the same rights in the United States.
The advisory group (which will operate in line with the Commission's standard Rules on Expert Groups) met informally on 21 January 2014 to discuss initial working arrangements and practical details. The first full working session will be held on 25 February 2014.
Offensive on financial services
Meanwhile, the EU executive has also published a so-called ‘non-paper’, which calls for the inclusion of financial services in TTIP.
From an end user’s perspective, it could be argued that its inclusion could be an opportunity not only as regards product choice, but also to improve the consumer or investor protection regulatory environment on both sides of the Atlantic,” said recently CEPS’ Karel Lanoo, adding that the inclusion would also be in line with G-20 commitments to make both EU, US regimes ‘equivalent’.
Europeans are convinced that for TTIP to fully bring economic benefits, financial services must be included. But the United States is not so convinced. Washington is concerned that Wall Street would use regulatory convergence within TTIP to lower restrictions adopted in the 2010 Dodd-Frank act.
The EU and the US are the world's two largest economies and capital markets, and their financial markets are the most efficient, deep and liquid in the world. Cross-border flows between the two areas total nearly $32 trillion (€23 trillion) annually, or around $87 billion (€63 billion) daily. Direct investment – an important measure of the shared interests, which both markets have – is equally impressive. US direct investment in the EU totals roughly €1.6 trillion, while EU direct investment in the US is €1.2 trillion.
“The EU believes that financial regulation is too important to be discussed ad hoc, in informal settings at the very last minutes, under market pressure,” the Commission wrote in the non-paper, insisting that an EU, US agreement should provide the framework for discussion and coordination of financial regulation.
The next round of negotiations is scheduled for 17-18 February in Washington, when tariff barriers will be discussed and a stocktaking exercise will take place between Michael Froman, the US trade representative, and EU Trade Commissioner Karel de Gucht.
The next EU-US summit will be held in Brussels on 26 March 2014. This will be President Obama's first visit to Brussels and to the EU institutions.
The talks are expected to be suspended between mid-April and autumn 2014 because of the renewal of the European institutions.
Negotiations between the US and the EU on the Transatlantic Trade and Investment Partnership (TTIP) started in July.
If successful, the deal would cover more than 40% of global GDP and account for large shares of world trade and foreign direct investment. The EU-US trade relationship is already the biggest in the world.
TTIP would be the biggest bilateral trade deal ever negotiated, resulting in millions of euros of savings for companies and creating hundreds of thousands of jobs. It is claimed that average European households would gain an extra €545 annually, and that Europe's economy would be boosted by around 0.5% of GDP, if such a deal was fully implemented.
Brussels and Washington have set the ambitious goal of completing negotiations by the end of 2014.