Brussels, Washington seen seizing new regulatory powers through TTIP

Anti-TTIP protest. Brussels, 4 February. [greensefa/Flickr]

Proposals to introduce a new regulatory body to help bind the Transatlantic Trade and Investment Partnership (TTIP) are likely to bypass national governments by centralising decision-making powers in the hands of Brussels and Washington, policy analysts have told EURACTIV.

On Tuesday (10 February), the European Commission published negotiating documents following the close of the eighth round of TTIP negotiations, held in Brussels last week.

The round, which focused on regulatory aspects, included detailed provisions for stepping up cooperation within the TTIP by setting up a transatlantic regulatory cooperation body (RCB).

The proposed RCB will aim to discuss regulatory proposals relevant to the agreement, covering issues such as textiles, automobile standards and professional qualifications, at an early stage, in order to ensure a coherent approach to rule-making in the US and EU.

It will have no power to issue policy, and will only feed into the existing rule-making processes, but is likely to be influential within the relevant regulatory processes.

Details on how the RCB would operate remain sketchy. However, it would have different ad hoc configurations depending on regulatory sector, and draw personnel from existing European and member state regulators. EU officials told EURACTIV there were no plans to create a large secretariat or EU agency.

Business groups and civil society organisations have disagreed over the efficacy of regulatory cooperation.

>> Read: Business and NGOs divided over TTIP regulatory cooperation

Businesses on both sides of the Atlantic want coordination between regulators to be hardwired into the deal to remove barriers to trade.

Improved regulatory convergence and standards compatibility would help increase trade, lower costs, create jobs and improve the international competitiveness of the industry, said Erik Jonnaert, Secretary-General of the European Automobile Manufacturers Association (ACEA) last week in a European Parliament hearing.

But NGOs have signed a joint declaration spelling out their “deep concern and firm opposition” to such cooperation, arguing it will drive down standards in areas such as chemicals, food standards and financial services.

In a bid to assuage such fears, the EU stated explicitly in its proposal that existing and future regulation and protections will not be restricted by the deal. Rules affecting EU chemicals within REACH will not be affected, and will be kept out of the agreement.

The proposals also suggest a yearly review process open to stakeholders. “The intention is that those involved would be drawn from the widest possible range of groups representing civil society, NGO and campaign groups in addition to corporate interests,” said an EU official.

>> Read our LinksDossier: TTIP for dummies

Sensitive to this issue, the EU executive said it will table a paper before April dealing with the exchange of “planned or existing regulatory acts of US states, and of the central national authorities of EU member states”, where these impact on the treaty.

“The sort of trade agreement that both sides have set out to do will involve some thorny issues about competences – whether about EU constitutional rights or federal US decision-making,” said Fredrik Erixon a Swedish economist and director of the European Centre for International Political Economy (ECIPE).

“Neither side wants to go into details about this, because they want to do a free trade agreement and will need to find some ways to centralise powers and trespass on regulatory powers in the member states and federal states,” Erixon added.

“It is likely to change the nature of the debate on policy at a discursive level, although it will not change the mechanics of policy-making,” said one senior think tank academic who preferred not to be named.

“Europe has lived with split [regulatory] competences on services, intellectual property and a range of other issue now we are taking a giant leap forward in regulatory policies where we need to have restrictions on regulatory bodies and state-controlled regulatory bodies, so we are stepping into a new era,” Erixon added.

An EU official dismissed the suggestion that Washington and Brussels would increase their leverage over the regulatory processes as “an interpretation” of the RCB’s intended role.

Negotiations between the United States and the European Union to forge an ambitious Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.

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. Traded goods and services between the two partners are worth €2 billion daily.

Brussels and Washington have set an ambitious goal of completing negotiations by the end of 2015.

>> Read our LinksDossier: TTIP for dummies

  • Before April 2015: Commission to table proposal on regulatory convergence between member states and Regulatory Cooperation Body within TTIP
  • April 2015: Ninth TTIP round of negotiations expected to take place in Washington DC

Subscribe to our newsletters