TTIP Negotiators Reaffirm 2016 Goal, As Long As Substance Measures Up

3 March 2016

Negotiators for a bilateral EU-US trade and investment pact reaffirmed last Friday that they hope to conclude their talks this year, so long as this does not involve a compromise on quality.

“We are ready to seek to conclude our negotiations in 2016, provided that the substance is right,” said EU Chief Negotiator Ignacio García Bercero on 26 February, following the twelfth round of Transatlantic Trade and Investment Partnership (TTIP) talks. “So we must ensure we pick up the pace and give the necessary impulse to get this agreement right.”

His US counterpart, Dan Mullaney, similarly affirmed that Washington is interested in concluding a TTIP deal this year. Earlier this month, White House Press Secretary Josh Earnest had suggested that the Obama Administration was not expecting a concluded pact in 2016, but was rather aiming to make as many advances as possible before the next President takes over. (See Bridges Weekly, 11 February 2016)

“Let me be clear: We want to finish this year, but we do not favour an ‘early harvest’ or a ‘TTIP light’,” said Mullaney, who is Washington’s chief negotiator in the TTIP talks. “We want an ambitious, comprehensive, and high-standard agreement. And the United States remains committed to doing its part to accomplish that.”

The US will be holding its next presidential election this November, with the new leader to take office in January 2017. Whoever wins the upcoming polls – Republican or Democrat – will be entering a deeply divided political landscape, with trade being one of the topics that is highly polarising in Washington circles and across the country.

Investment protection, sustainable development

Notable from the 22-26 February round, which was held in Brussels, Belgium, was the fact that both sides now have on the table their proposals for the investment protection terms of the pact, as well as for a sustainable development chapter.

The EU had tabled proposals on both topics late last year. (See Bridges Weekly, 12 November 2015)

US officials now confirm that their own proposals on those issues have now also been put forward for discussion, referring to the sustainable development documents as proposals relating to labour and environmental challenges.

Officials from both sides say that the discussions on investment protection and sustainable development are still in the early stages, with the past week devoted to understanding each other’s proposals better. One of the key questions for trade and investment watchers will be how close – or how far apart – the two sides are on investment protection, given the EU’s push for a TTIP “investment court” with an appellate mechanism. (See Bridges Weekly, 17 September 2015)

“This round marks the beginning of discussions in this area so we have spent significant time understanding each other’s proposals better, and starting to identify areas of convergence,” said García Bercero at the closing press conference.

The 28-nation bloc announced just this week that it has agreed with Canada to include such an investment court system in their separate bilateral pact, known as the Comprehensive Economic and Trade Agreement (CETA). (For more on the EU-Canada developments, see related story, this edition)

Government procurement talks this week

TTIP talks are set to continue through this week, officials confirmed, as part of an effort to make faster progress than previously on the various outstanding issues that remain.

This will include a discussion of initial public procurement offers – one of the three TTIP market access pillars, along with goods and services – which were to be exchanged this week. The talks will also address the terms of the actual public procurement chapter, officials confirm.

According to the EU, their side would like to see “substantially improved access to government procurement opportunities at all levels of government on the basis of national treatment,” in line with the conclusions of a joint EU-US report issued before TTIP was launched nearly three years ago.

Intensified work

Given the goal of reaching a deal this year, officials outlined last Friday a series of milestones that they say will be key toward meeting this goal.

According to García Bercero, this will entail two additional negotiating rounds between now and summer, with continued contact between teams and top officials in between.

Furthermore, he said, there should be “meaningful offers” in all three market access areas by summer, as well as proposals in all areas involving regulatory issues and rules, with negotiators having also made significant strides in consolidating such documents.

“This would mean that only the more difficult issues in each chapter would remain bracketed,” he said.

Whether such progress will be possible is an open question. The two sides were far apart in their first goods market access offers, and while their exchange of revised offers last October was greeted as being a major milestone, putting them at a “comparable level,” Mullaney noted on Friday that more needs to be done. (See Bridges Weekly, 29 October 2015)

“This is a good start, but the United States remains committed to the goal of eliminating these transatlantic tariffs under TTIP. We look forward to working with the European Union in the coming months to achieve that objective,” he said, noting that one of the issues to come up this week was how to cut down the time periods for removing tariffs.

While the offers put forward in October each involved elimination of 97 percent of the two sides’ respective tariff lines, according to negotiators, the remaining three percent are expected to involve more work given political sensitivities. Of the 97 percent on the table, not all would entail immediate tariff elimination. (See Bridges Weekly, 29 October 2015)

The two sides have also exchanged initial and revised services offers. (See Bridges Weekly, 23 July 2015)

Regarding services, some discussions are also taking place under the regulatory cooperation area. (For more on the services aspect of TTIP, see related story, this edition)

On regulatory cooperation, TTIP negotiators say that they have made “significant” progress in this latest round, which could pave the way toward meeting their timing goals. For example, the US and EU have each put forward revised regulatory cooperation proposals, dealing with both services and goods manufacturing, with the Brussels version set to become public in the coming days.

ICTSD reporting.

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