On the 27th of March 2014 the American Chamber of Commerce in the EU (AmChamEU) hosted the 2014 Transatlantic Conference on the Transatlantic Trade and Investment Partnership (TTIP) currently under negotiations between the US and the EU.
Sponsored by the most influential transnational corporation based in Brussels, P&G, Caterpillar, UPS just to cite a few, the conference welcomed speakers representing the US trade Department, their homologues from the DG Trade of the European Commission, Business leaders (P&G, Coca Cola, Ericsson, Cisco, General Electric), NGOs, consumer and business associations.
The TTIP: Key facts
The TTIP is a proposed “all encompassing” trade agreement between the US and the EU. Since tariff barriers between the US and the EU are generally very low (3,5% for EU products entering the US and 5,2% is the average EU import tariff), with the exception of agricultural goods and automotive sectors where protectionist tariffs persist on both sides, the prospected agreement will focus on regulatory standards, the so called “non tariffs barriers”.
Following the failure of the Doha round of negotiations of the WTO, leaders from both sides of the Atlantic advocated for a Transatlantic trade agreement.
At the November 2011 EU-US Summit a High Level Working Group on Jobs and Growth has been established. On the 11th of February 2013 it issued a report on the positive outcomes of a transatlantic trade agreement. The day after President Barak Obama endorsed the TTIP in his State of the Union address, immediately followed by the President of the European Commission Barroso.
The 14th of May 2013 the European Parliament adopted a resolution (2013/2558(RSP)) in which it endorsed the launch of negotiations with the US and affirmed its will to “follow them closely and contributing to their successful outcome”.
Week-long negotiation rounds are held in Brussels and Washington. Currently at its fourth round (10-14 March 2014), TTIP negotiations are set to conclude in 2015.
According to the IMF, the TTIP would cover the 46% of word’s GDP, being the biggest free trade area ever put in place in history.
Figures of the estimated benefits for the average citizen of the EU amount to €545 per year, with a 0.5% – 1% increase of GDP that equals €119 billion per year.
The automotive sector will be one of the biggest beneficiary form the TTIP because of the relatively high tariffs that still apply in this sector while intra-company trade will also receive a considerable boost, considering that a great share of transatlantic trade is made between subsidiaries of the same multinational companies.
Criticism on the proposed TTIP focus mainly on the regulatory aspects of its negotiations (they are indeed the core of the agreement) and concerns have been raised on whether existing level of consumer, environmental and health and data protection would be at stake in the negotiations.
ISDS (Investor-State dispute settlement) mechanisms to be implemented within the TTIP are always a contentious subject because they could provide corporations the right to sue member states before an arbitral tribunal.
Among the most critical point of the TTIP is also the lack of involvement of the European Parliament: up to now the European Council mandate to negotiate has not been subject to Parliamentary scrutiny, as the same Commissioner fort Trade Karel De Gaucht reminded on a Public hearing at the International Trade Committee on the 1th of April.
TTIP facts and fiction: The Transatlantic Conference
Opening his opening address Marc Vanheukelen, Head of Cabinet of European Commissioner for Trade Karel De Gucht, underlined the astonishing figures of US-EU trade flows “2,6 billion Euros cross the ocean every day”.
On the backdrop of rising critics toward the TTIP coming from civil society, he advocates for a further engagement of stakeholders in the decision making process: “stakeholders will be the first to see the benefits of the TTIP”.
“We have the mandate from 28 member state to negotiate”, said Vanheukelen in response to the widespread criticism of the TTIP democratic legitimacy.
Ambassador Michael Punke, Deputy US trade Representative and Permanent Representative to the WTO, begun its discourse by underlying the “enormity” of the historical moment in which we live and the “tectonic shifts” the world is undergoing after the financial crisis.
In a nutshell, the TTIP as the new “Bretton Woods”, an opportunity for shaping the international financial architecture for the next century to come.
Ambassador Punke also stressed the innovations the last round of negotiations brought up:small- and medium-sized enterprises’ (SMEs) interests have finally been taken into consideration since they account for the 99% of EU businesses and 2/3 of the entire private labour force.
To those skeptical about the trade agreement he took up President Obama’s speech at the US-EU summit held in Brussels on March 26 where he stated he has “no intention of signing legislation that would weaken consumer protection and environmental standards”.
“The US is not imposing its regulatory system to the EU”. The strong regulatory agenda set up by the TTIP will not lead to “deregulation”, but instead it will “cut red tapes”, overlapping procedures, leaving existing standards intact.
Joseph Quinlan, senior fellow of the Center for Transatlantic Relations of the John Hopkins University, remarked that growth path in the US and in the US are currently “out of sync” with foreign direct investments (FDIs) flows in both directions in decline and a significant US trade deficit with the EU (-126,6 billion dollars in 2013).
On the other hand, global competitiveness rankings show how both the US and European countries stand in the global market: the World Economic Forum puts 6 European countries (1st is Switzerland, a non EU country) and the US (5th) in the top ten. This figures, together with the “competitive advantage” of the US in the energy sector , would testify for the opportunity of closer ties between the two sides of the Atlantic.
To ensure that the TTIP doesn’t end up like the Doha round of the WTO (a stalemate), Quinlan suggests to “sell the relationship”, the historical bonds between the US and the EU and not the trade agreement with its row statistical figures.
The general distress about the wrong turn taken by the debate on TTIP in Europe was well demonstrated by a statement from a representative of an American corporation: “There should be a hearts and minds campaign for the average guy who drinks a six packs of beers”.
A critical observation made by a representative of caterpillar about the ineffective role of European institutions in addressing the economic crisis induced Quinlan to state: “Europeans are not yet out of the woods, deflation is still a risk for Europe”.
Pieter de Pous, EU policy director for the European Environmental Bureau, expressed his concerns about the ISDS (Investor-State dispute settlement) mechanism to be put in place by the TTIP. In a recent letter to the Financial Times he and Jos Dings asserted that big corporation would circumvent States’ legislation and “bypass regular court systems and sue governments”.
Kosuk Lee-Makiyama, Director of the European Centre for International Political Economy (ECIPE), drew attention on the value of data for the service economy by signaling that 1/5 of GDP growth in Europe comes from the use of internet. Trade in services between the EU and the US also account for around 40% of total traded goods, making the EU-US trade relationship the most “service intensive” and therefore “data intensive” in the world.
Rene Summers of Ericsson Group stated that putting barriers to data flows would result in increased costs of telecommunication services.
Marco Düerkop, lead negotiatior on services for TTIP for the European Commission, took the EU-South Korea trade agreement as an example of an all-encompassing trade partnership that also provides provisions regarding data flow protection.
Article 7.50 of such agreement allows for an exemption to free flow of data to protect privacy, a provision already existing at WTO level (article XIV of GATS, General Agreement on Trade in Services), while article 7.43 commit the parties on the implementation of “adequate” safeguards to the protection of privacy.
After four rounds of negotiations on services the discussion is still at a “technical stage”, suggesting that more politically sensitive questions will be discussed at a later stage.
He also stressed upon the fact that the European Commission “is not going to negotiate data protection standards in TTIP”.
On this subject Anne Fielder of Pricacy International reminded the public that while South Korea has a comprehensive data protection legislation, this is not the case of the US where a common regulatory framework on data protection is loudly invoked by consumers’ organizations.
She recommended to “reinforce privacy rights in both sides of the Atlantic” to “level the playing field” instead of racing to the bottom with a weak compromise based upon weak regulatory frameworks”.
She also made clear that while free flow of data is an asset for businesses and consumers, personal data should be considered of a distinct kind and therefore a distinct set of rules have to be put in place to ensure their protection.
She pointed up that citizens are really concerned about their personal information being transferred or disclosed, as shown by statistics from Eurobarometer, certainly the recent mass surveillance affair playing a role in shaping people’s sensibility on the subject.
On Safe Harbor Principles, she noted that independent reports on its functioning show how companies are self-certifying and self-policing over the principles they should follow, resulting in a large scale investigation carried out by the Federal Trade Commission.
She also remarked that US opposition to mandatory localization of data would not be acceptable for European businesses and consumers who instead strongly support it.
On this issue Mr. Düerkop admitted that a position has not yet been taken on weather including data localization in TTIP talks or instead rely on general GATS rules.
From a different perspective, Mr. Hosuk favors a laissez-faire approach that puts consumers and vendors’ choice at center stage.
“We are taking the choice away from the citizens and back to the Government”, he stated, adding that forcing data localization to business would have detrimental results for the economy with a loss of up to 1% of GDP in Europe.
IBM and Telefonica representatives both endorsed a “free-flow” of data approach to the TTIP, the former arguing that a “mythical” and thus mystifying depiction of the TTIP in the general public debate is occurring , while the latter underscored the consensual trade-off between persona data and free internet services.
A representative of Google interestingly pointed out how many governments seek and manage to take control over the internet not to protect their citizens’ privacy but to thwart free expression and control public opinion, asking how to multilaterally enforce a free expression regime at a global level.
“Privacy is a human right and so is freedom of expression”, remarked Anna Fielder of Privacy international, observing that trade agreements should not deal with human rights and that by no means personal information should ever be considered tradable goods to put on the negotiating table.
Pour en savoir plus:
– AmCham EU’s position on the TTIP: (EN)
– EU-US High Level Working Group on Jobs and Growth: (EN)
– TTIP: facts and fiction Conference programme: (EN)
– Transatlantic Economic Survey, John Hopkins University: (EN)