Tom Ferris is a Consultant Economist specialising in Better Regulation. He was formerly the Department of Transport’s Senior Economist.

 

Negotiating TIPP: Are the EU and USA getting any closer to a Transatlantic Trade and Investment Agreement?

Introduction

As the negotiations for a Transatlantic Trade and Investment Partnership (TTIP) between EU and the USA trundle along, it’s creating a mountain of paper and generating quite conflicting views (TTIP is now known as “tea-tip”). The eleventh round of talks is scheduled for mid-October in the US. Supporters of TIPP argue that it will cut red tape and reduce restrictions on investment on both sides of the Atlantic. Opponents argue that it could threaten consumer protection, social rights, health, agriculture, the environment, and data protection. We highlighted some of the issues in a blog last April1. This article looks at some of the latest developments on the TTIP process.

Removing the Secrecy

Up to now, one general criticism was that TIPP negotiations were taking place in secret. The EU has taken this criticism on board and now has a dedicated website providing a wide range of up-to-date information2.

This website contains a wealth of information:

  • a wide range of TTIP documents – including summaries, and the EU's negotiating guidelines and opening positions;
  • a calendar of upcoming TTIP events – including negotiating rounds and stakeholder meetings; and
  • videos and photos.

Filling the Information-gap

In addition, EU officials are engaging widely in debates about TIPP. Just to take one example: on 25 September, Cecilia Malmström, EU Commissioner for Trade, addressed Columbia University on “TTIP and Beyond: EU Trade Policy in the 21st Century. She admitted that TIPP was ambitious, pointing out that

"Our aim is an advanced set of rules on issues like state-owned enterprises, localisation requirements, raw materials and energy. We are also trying to break new ground in international regulatory cooperation – in general and for nine specific sectors including pharmaceuticals, cars and cosmetics”.

The European Commission Representation in Ireland is also making its voice heard. Its website states that, as far as TIPP is concerned,

"...a successful pact is expected to benefit Ireland more than any other EU Member State. That’s because almost half (49%) of Irish exports outside of the EU end up in the US, compared to the combined average of 16% for all Member States, and 25% of foreign direct investment (FDI) in Ireland comes from the US”.

The Irish Government has also published its views on TIPP. Specifically, the possible impact of TTIP on Ireland was examined in a report prepared for the Irish Government. The consultants, Copenhagen Economics, undertook the study and this is available here. The Irish Government accepts that legitimate concerns have been raised about the possible negative impact of TIPP on Ireland. Anxious that the negotiations be transparent,  the Department of Jobs, Enterprise and Innovation has provided a response to a number of the issues raised, such as the Investor-to-State Dispute Settlement Scheme, Public Services, Regulatory Cooperation, Food Standards, particularly Genetically Modified Organisms and Hormone Treated Beef, and Transparency. The responses are set-out in a briefing note available here.

The views of one negotiator

David O’Sullivan, EU Ambassador to the United States, addressed a seminar in Dublin last September on “Transatlantic Relations and TIPP”. He argued that TTIP “...will be a powerful shot in the arm for Ireland as it rebuilds its economy on a more diversified, sustainable basis”. Notwithstanding the clear benefits to Ireland from trade, the Ambassador acknowledged

"...that there are people and organizations here that are less enthusiastic. This is not surprising coming on the back of a period of difficult austerity which made some people rightly resentful, like they were not at the Celtic Tiger party but somehow have ended up with the bill”.

He went on to discuss issues that have raised concerns, namely Regulatory Cooperation, Investor-to-State Dispute Settlement Scheme (ISDS), and Agriculture. The transcript of David O’Sullivan’s address is available from the Institute of International and European Affairs (IIEA) here.

TIPP negotiations continue

TIPP is far from being a done-deal. Ambassador O’Sullivan summed up the current position as follows: “Negotiators have their work cut out for the coming weeks and months when they meet next month for the 11th round of negotiations”. It is likely that negotiations will continue well into 2016. Further, even if agreement is achieved at ambassadorial level, over all agreement at EU and USA government level will then be required.

From an EU perspective, if the negotiation process is successfully completed, the draft TIPP texts will have to be approved by the twenty-eight EU's Member States in the Council and then ratified by the European Parliament. Even if agreement is achieved at overall EU level, there may still be agreement required at EU Member State level. Depending on the policy areas are covered in the final TIPP agreement, the twenty-eight national parliaments of the EU's Member States might also have to approve the deal. So there is still a long way to go yet.