EU Pushing for TTIP Talks’ Completion, Hefty Trade Agenda in 2016
The upcoming year is expected to be a busy one for EU trade negotiations, with the 28-nation bloc aiming to conclude talks for a trade and investment deal with the US before the end of the Obama presidency, while setting in motion various other processes with countries around the globe – all amid an uncertain economic and political landscape.
During a speech in Berlin late last week, EU Trade Commissioner Cecilia Malmström outlined plans to advance the bloc’s existing and new trade agenda, stressing that one of the key areas for making progress would be the Transatlantic Trade and Investment Partnership (TTIP) negotiations with Washington.
“The EU is ready to finish this agreement under the Obama Administration. We have the political and human resources to do that. However, the US must also be prepared to commit if we are to get a result,” said Malmström.
Washington and Brussels have held eleven negotiating rounds to date since the talks first began in 2013. Following the latest round in October 2015, US officials also confirmed their interest in finishing the negotiations before US President Barack Obama leaves office. (See Bridges Weekly, 29 October 2015)
Obama’s term is slated to end in January 2017. Elections for his successor will be held in early November 2016, with the primaries to determine the respective party nominees set to begin in less than two weeks’ time and run through the summer.
To date, the two trading partners have exchanged initial and revised services offers, as well as initial and revised goods offers. They have also made progress on regulatory discussions, and are planning to exchange initial public procurement offers early this year.
“The Transatlantic Trade and Investment Partnership or TTIP negotiations are essential. Almost five million jobs in the European Union depend on our exports to the United States,” Malmström said.
China investment pact, other deals in focus
Malmström also outlined various other priorities for the bloc’s trade agenda in 2016, such as finishing the “fine tuning” on the EU-Canada trade pact reached in 2014 – including on the controversial provisions in the pact involving investor protections. (See Bridges Weekly, 2 October 2014)
Another key goal for the 28-nation bloc is advancing negotiations with Japan for a trade agreement, which is one of the EU’s largest trading partners in Asia, surpassed only by China. Those negotiations have been underway since 2013. (See Bridges Weekly, 27 March 2013)
“We will continue to make progress this year,” Malmström noted, without specifying whether this would mean reaching a completed deal in that timeframe. A programme document issued separately by the Netherlands’ Presidency of the Council of the European Union has indicated that it is “possible” that the EU-Japan trade talks could be completed sometime during the six-month Dutch presidency, which is now underway and will last from 1 January to 30 June 2016.
China will also be in focus for the EU this year, both due to the ongoing debate over its market economy status (for more, see related story, this edition) as well as the continued negotiations over a bilateral investment deal, which have been underway for over two years. (See Bridges Weekly, 24 October 2013)
The day following Malmström’s speech, negotiators from the EU and China confirmed that they had agreed upon the scope of the planned investment deal, which they say would establish a “genuine right to invest” and also provide a guarantee against discrimination. Other areas that the proposed pact would address include regulatory challenges involving transparency and licensing and authorisation procedures, as well as rules involving environment and labour, an EU press statement said.
“The negotiations for an EU China investment agreement would improve conditions for EU investors on the ground and can be a support to China’s domestic reform efforts,” said Malmström. “We will also continue to pass the message that, in light of China’s continuing economic uncertainty, those reforms are more necessary than ever.”
According to EU statistics, only 2-3 percent of European investments overseas are based in China, with the Chinese investor presence in the EU even lesser, despite some recent gains.
New trade negotiations with Australia, New Zealand, the Philippines, and potentially Indonesia are also set to be on the horizon, the EU trade chief said, noting also the goal of updating the bloc’s deal with South Korea and possibly begin investment talks with Hong Kong and Taiwan. These processes would begin, she said, “when conditions are right.”
The EU is already beginning preparations for launching talks with Australia and New Zealand. The Commission had noted last year that such negotiations will aim to take “into account EU agricultural sensitivities.” (See Bridges Weekly, 5 November 2015, 19 November 2015, and 15 October 2015)
Brexit question, other concerns
Overall, the EU as a bloc is also facing a host of challenges as 2016 gets underway, ranging from migration issues to questions over rule of law in Poland, with European Commission President Jean-Claude Juncker conceding last week that the Union is living “in difficult times.”
Indeed, one of the major questions looming over the European Union this year is whether the United Kingdom will choose to remain one of the bloc’s 28 member states – and what the implications would be of a “Brexit” if it does not.
UK Prime Minister David Cameron has committed to holding an in-out referendum domestically by the end of 2017, following a renegotiation of the UK’s EU membership terms.
In that context, Cameron outlined last year a series of proposed reforms to his country’s relationship with the EU, specifically relating to the areas of economic governance, competitiveness, sovereignty, and immigration. The UK premier also has noted, with relation to competitiveness, that he backs the European Commission’s new trade and investment strategy that was released late last year. (See Bridges Weekly, 3 December 2015 and 5 November 2015)
Speaking to reporters last Friday, Juncker said that an upcoming February summit is very like to lead to an agreement with Cameron.
“I am quite sure we will have a deal – not a compromise, a solution, a permanent solution – in February,” said the Commission chief.
Whether the deal will indeed be enough to avert a “Brexit” – which some officials from major trading partners, such as the US, have warned could be damaging to the UK’s trading relationships – remains up for debate. Cameron, for his part, has said that leaving the bloc would not be “the right answer” for his country, though if the vote is in favour of leaving his government will find a way to “make it work.”
ICTSD reporting; “Juncker confident of deal to keep Britain in Europe,” FINANCIAL TIMES, 15 January 2016; “Juncker ‘quite sure’ Brexit can be avoided,” POLITICO, 15 January 2016; “‘Brexit’ negotiations still face difficulties: European Commission,” AGENCE FRANCE PRESSE, 14 January 2016; “David Cameron: Brexit ‘is not the right answer’ for Britain,” THE TELEGRAPH, 10 January 2016.