EU Releases TTIP Negotiating Mandate

16 October 2014

EU governments last Thursday decided to make public negotiating instructions given to the European Commission in June 2013 for hammering out the bloc’s ongoing transatlantic trade talks with the US.

EU Trade Commissioner Karel De Gucht welcomed the news, noting that he had previously encouraged member states to release the mandate.

“It allows everyone to see precisely how the EU wants this deal to work, so it contributes to economic growth and jobs’ creation across Europe while keeping our commitment to maintain high level of protection for the environment, health, safety, consumers, data privacy, or any other public policy goal,” the EU trade chief added in a press release.

Efforts to seal a Transatlantic Trade and Investment Partnership (TTIP), as the planned deal is formally known, have been ongoing for over a year. While both sides initially expressed willingness to cut a deal by late 2014, the talks have since moved at a slower pace than anticipated.

The move comes as the two trading partners work to assuage public concerns over transparency in the negotiations, qualms that have also been echoed by legislators. The European Parliament Greens Party, which has in the past been among those levelling the accusation that the talks are too secret, also applauded the move. 

Greens trade spokesperson Yannick Jadot added, however, that member states should now release specific negotiating documents.

“The devil is in the detail and it is only by scrutinising the detail in these negotiating documents that those not directly involved in the negotiations can know where these devils lie,” Janot said last Thursday.

Unpacking the EU mandate

The declassified mandate confirms that both parties envisage an agreement tackling three broad areas, namely, market access, regulatory issues and non-tariff barriers, and rules.  While the deal will be consistent with WTO obligations, the document indicates the level of ambition will also go beyond commitments at the multilateral level.

The preamble and general principles governing the negotiations from the EU’s side reiterate the bloc’s commitment to sustainable development and wielding trade as a tool to this end. Listed EU objectives include promoting high levels of protection for the environment, labour, and consumers, consistent with international environmental and labour agreements.

In a section specifically dedicated to trade and sustainable development, the EU indicates that consideration will be given in the planned deal to measures that facilitate trade in environmentally-friendly and low carbon goods, as well as those related to energy and resource efficiency. Mention is also made to environmentally-friendly services and technologies, including through green government procurement.

In this area, the EU is also part of a separate effort between a group of 14 WTO members to cut a tariff-cutting environmental goods trade agreement, as is the US. (See BioRes, 30 September 2014)

The 28-nation bloc also commits to facilitating an assessment of the economic, social, and environmental impacts of the deal in parallel with the negotiations, which would be finalised before the agreement is signed. The so-called Sustainability Impact Assessment (SIA) would involve civil society and seek to clarify the likely effects of the agreement on sustainable development.

One separate section in the mandate focuses on trade-related energy and raw materials. The EU says the agreement will include provisions to address trade- and investment-related aspects in these areas. Negotiators from both sides have not yet decided, however, whether or not to include a separate energy chapter in the agreement, though the EU has been advocating for one. The decision, officials have said, will depend on whether energy issues can be sufficiently addressed in other parts of the TTIP, or if they merit their own separate chapter. 

The EU has said that an energy chapter is key, not just given the importance of the 28-nation bloc to focus on diversifying its energy sources away from Russia, but also in order for both sides to set a new global standard in this area. (See Bridges Weekly, 28 May 2014)

Regarding regulatory issues, the EU document says on multiple instances that the effort to achieve regulatory compatibility “shall be without prejudice” to each parties’ right to enact regulations in areas such as health, safety, consumer, labour, and environmental protection, as well as cultural diversity.

The mandate also makes clear that audiovisual services are off the table in the negotiations, and that the TTIP Agreement should “respect the policies of the EU and its member states for the promotion and protection of cultural diversity,” which had been a major concern of some countries – particularly France – before the start of the negotiations. (See Bridges Weekly, 25 April 2013

Also of potential significance is the EU’s push to build upon the disciplines in the revised WTO Government Procurement Agreement (GPA), which was finalised at the global trade body’s eighth ministerial conference in December 2011 and entered into force in April of this year. (See Bridges Weekly, 10 April 2014)

Disagreements between Brussels and Washington, among others, had been one of the major final sticking points in the negotiation process. The EU has said that it now hopes to complement the outcome of the GPA revision talks, aiming for better access on both sides to public procurement markets at the national, regional, and local levels. Furthermore, Brussels hopes to include provisions aimed at barriers “having a negative impact” on procurement markets, such as the US’ controversial Buy America(n) provisions.

EU public concern

The release of the TTIP mandate came just ahead of planned pan-European civil society demonstrations over the talks. Approximately 400 activist groups mobilised protesters across Hamburg, Berlin, Madrid, Ljubljana, Helsinki, London, Vienna, and Paris on Saturday to express concern over issues ranging from perceived lack of transparency to environmental and health fears.

TTIP opposition varies widely between member states. Some groups fear that the trade deal will spark a race to the bottom in environmental standards. Demonstrators in France said they feared that the agreement would force the extraction of known shale gas reserves and boost trade in genetically modified organisms.

Meanwhile, groups in Germany have claimed that TTIP could weaken the regulatory power of the German regions known as Länder.

Officials from both sides have been adamant that any decisions make in TTIP will not detract from regulators’ ability to establish regulations in the public interest. However, such assurances do not appear to have persuaded detractors.

Public concern also exists in various member states, and particularly in Germany, around the possible inclusion of an international arbitration process for settling disputes between governments and business. The proposed investor-state dispute settlement (ISDS) mechanism has been touted as a major concern by Berlin since the recent inking of a free trade pact between the EU and Canada. (See Bridges Weekly, 2 October 2014)

The ISDS-related discussions in TTIP are currently on hold, as the Commission reviews the results of a public consultation conducted earlier this year on the subject.

The mandate released last week says that including such a policy will ultimately depend on “whether a satisfactory solution” is reached in line with the bloc’s interests, such as providing European investors with legal certainty abroad, or ensuring that certain standards of treatment for investors are established.

Such a mechanism should also feature safeguards versus “manifestly unjustified or frivolous claims,” the mandate says, and any TTIP investor protection provisions will be “without prejudice to the right of the EU and the member states to adopt and enforce… measures necessary to pursue legitimate public policy objectives,” so long as these are done in a non-discriminatory manner.

State of play

Political advances in TTIP are, for the moment, not expected until after the ongoing hand-over at the European Commission and next month’s congressional midterm elections in the US are completed.

Officials have also said that making technical progress now will pave the way for the more difficult political decisions later on. In this context, the seventh round of trade talks, which ended earlier this month, focused primarily on making technical advances, with discussions focusing on areas such as regulatory coherence, sanitary and phytosanitary standards, and technical barriers to trade.

The two sides also worked to advance their understanding of each side’s respective services proposal, with discussions regarding the EU’s submission now over halfway complete. Energy and raw materials, as well as intellectual property rights and small- and medium-sized enterprises, were also discussed during the talks, held in Chevy Chase, Maryland.

Other topics under discussion reportedly included agreement language on both agricultural and industrial products regulations and standards.

“Ultimately, of course, as this painstaking work of building a foundation for an agreement is completed, we will need to make a high-level push to achieve the comprehensive and ambitious results that we are now working to support,” explained US chief negotiator Dan Mullaney at the time.

Even so, trade observers are watching closely to see when the tough political decisions might take place, particularly given concerns in some quarters that the high-profile talks may be losing steam.

Recent comments from US Trade Representative Michael Froman appear to have placed the responsibility of taking the talks to the next level squarely on Brussels’ side, with the US trade chief writing in a Financial Times op-ed that this should be the goal of the EU’s incoming College of Commissioners.

“Once a new Commission is in place, the EU has an opportunity to re-energise its negotiations with the US on the Transatlantic Trade and Investment Partnership (TTIP),” Froman said in the 10 October piece.

A political review of the TTIP talks to date has been promised by Trade Commissioner-designate Cecilia Malmström, who was recently approved by the European Parliament’s International Trade Committee. (See Bridges Weekly, 2 October 2014)

ICTSD reporting; “TTIP negotiating mandate finally declassified,” EURACTIV, 9 October 2014; “Anti-TTIP demonstrations seize European capitals,” EURACTIV, 13 October 2014; “Harder push for trade deals needed to spur global growth,” FINANCIAL TIMES, 10 October 2014.

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