EU and US negotiators are meeting this week in Brussels for a new round of talks, and promise concrete steps will be taken to advance the Transatlantic Trade and Investment Partnership (TTIP) negotiations.
Bogged down by public opposition, this is the first round since the new European Commission took office in November, and after European Commissioner Cecilia Malmström and US Trade Representative Michael Froman met in Washington, and promised to give a new momentum to the negotiations.
“This week is crucial, because so far there has been little real flesh on the bones of the negotiations, and in order for a deal to be made there has to be some real progress made behind the scenes,” said one EU diplomat on condition of anonymity.
“Observers will be looking at this week’s talks for evidence that the two parties can achieve something beneath the superficial debates, however controversial these may be,” the diplomat added.
After the Commission decided to temporarily put aside the controversial Investor-State Dispute Settlement (ISDS) clause, this round of negotiations is supposed to advance on tariffs and regulatory cooperation, as the EU is trying to table proposal.
EU sources said they expect to have a strong presence of US regulatory agencies in Brussels.
Regulatory cooperation at stake
Featuring high on the negotiations is the setting up of the Regulatory Cooperation Body (RCB). According to experts, greater regulatory convergence between the EU and the US could result in efficiency gains and GDP growth.
Others, however, fear that regulatory coherence would effectively limit policy space and sideline the public and civil organisations, the Corporate Europe Observatory said in a statement last week.
“Trade Comissioner Malmström has to step back on regulatory cooperation in TTIP. Like Investor State Dispute Settlement (ISDS), it strengthens big business and threatens democracy on both sides of the Atlantic,” said Max Bank of LobbyControl.
In the past, business groups and civil society organisations have released contradictory statements about regulatory cooperation.
Businesses on both sides of the Atlantic want coordination between regulators to be hardwired into the deal to remove barriers to trade. Companies across Europe have thrown their support behind TTIP. German automakers like Daimler, BMW, Porsche and Volkswagen said the trade agreement could save them around €1 billion a year in customs tariffs. The cost of dealing with different regulations could also drop, they said in a joint event last week in Berlin.
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 signed already 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.
Luisa Santos of BusinessEurope refutes the claim and said the European Commission has stated quite clearly that none of the elements of the present regulatory system will be changed through TTIP. For example, REACH will not be touched, she said.
With or without TTIP
Regulatory cooperation does not require a comprehensive TTIP agreement, and could also be implemented without it, underlines a recent report on the issue.
For example, in 1998, the two partners concluded a mutual recognition agreement for several industry sectors, including telecommunications equipment, electromagnetic compatibility, electrical safety among others.
In 1999, the EU and the US struck the Veterinary Equivalency Agreement (VEA) after six years of negotiations. The idea was to facilitate trade in animals products by establishing a mechanism for the recognition of equivalence of sanitary measures and to improve communication and cooperation.
Furthermore, a wealth of dialogues occur between regulators in a more or less formal and informal way, including the Transatlantic Business Dialogue, the Transatlantic Consumer Dialogue, and the Transatlantic Legislators’ dialogue.
“But these dialogues have not translated into concrete actions to improve cooperation,” said Santos, advocating for a more formal body that would structure and advance regulatory cooperation.
An EU-US regulatory body is something that is common sense, said an EU official close to the negotiations. “You need to create a structure that would facilitate cooperation. A body that would set priorities and monitors what is done on both sides so that fact-based discussions can take place.”
It is estimated that as much as 80% of the total TTIP potential gains come from cutting costs imposed by red tape and regulations as well as from liberalising trade in services and public procurement.
Another study concludes that if 50% of existing non-trade barriers were removed between the EU and the US, the EU GDP would be 0.7% higher in 2018.
>> Read: TTIP for dummies
To ensure that a plurality of interests will be taken into account during the negotiations, the Commission has also organised a stakeholder event on Wednesday (4 Februrary).
The Parliament is currently preparing a mid-term review of the TTIP talks and the report could be voted on in May. All international trade agreements negotiated by the EU will have to be approved by the European and national parliaments before entering into force.