EU, US Trade Chiefs Pledge to Speed Up TTIP Talks
The top trade officials from the EU and US agreed to ramp up the pace of bilateral negotiations for a wide-reaching trade and investment deal, following a “political stocktaking” meeting expected to set the tone of the talks through the rest of the year.
During their discussions in Washington on Tuesday, EU Trade Commissioner Cecilia Malmström and US Trade Representative Michael Froman also confirmed that meetings between their respective negotiating teams would be “intensified,” including through intersessional, technical discussions.
“We need to intensify the pace of our negotiations,” Malmström said afterwards. “This means stepping up efforts on both sides. Today’s meeting took place in a constructive spirit, and we have a good momentum going forward to the next negotiating round.”
The two sides are slated to hold their next negotiating round in October, though the exact dates and venue have yet to be officially confirmed. That meeting would mark the eleventh round since the talks began in mid-2013. (See Bridges Weekly, 23 July 2015)
Investment court proposal
The TTIP talks have been said to be lagging throughout the past year and much of 2014 as well. However, the indication from G-7 leaders that they aim to see a deal outline by year’s end – along with other developments such as the potential renewed discussion on investor protections – could give the negotiations a possible boost.
While officials did not note in their statements whether the contentious issue of investor-state dispute settlement (ISDS) and investor protections was raised during the Malmström-Froman meeting, the subject was already debated this week among EU trade lawmakers in Brussels.
Malmström had presented a draft proposal a week ago for an “investment court” that would replace the controversial ISDS mechanism in trade and investment deals, starting with TTIP. That document was not a formal proposal to the US, given that the European Commission first plans to discuss the ideas in more depth with the EU’s 28 member states in the Council as well as with parliamentarians. (See Bridges Weekly, 17 September 2015)
The issue of ISDS or a variation thereof has already proven polarising within the European Parliament, which adopted non-binding language on the subject – as well as the broader TTIP talks – in early July after months of heated debate. (See Bridges Weekly, 9 July 2015)
While some lawmakers reportedly welcomed the Commission’s new proposal, questions were raised by others over the need for having such a legal forum. This has been a longstanding argument in the context of the TTIP talks, with opponents of ISDS and similar mechanisms arguing that both the EU and US already have strong enough rule of law and should not cede any of that authority to an international court.
Among the other questions that came up during the debate were the potential positioning of this TTIP Investment Court in the overall EU legal system; what obligations investors will face under TTIP; what the US thinks of the news; and what the proposal means for the EU’s completed trade deal with Canada, which has not yet been ratified.
Meanwhile, some European civil society groups have come out against the Commission proposal, arguing that it does not go sufficiently far enough to address long-standing concerns about investor privileges, the balance with national laws and jurisdiction, and the right to regulate.
“The EU cannot hide behind a name change when the flaws of the Investment Court System remain the same,” said Cécile Toubeau, senior better trade officer at Brussels-based Transport & Environment. “Citizens will continue to unfairly shoulder private risks taken by foreign investors, while lawmakers will be deterred from regulating in the public interest.”
Similar questions were also raised by Friends of the Earth Europe, with trade campaigner Natacha Cingotti arguing that “the inclusion of investor-state arbitration – albeit under a different name – in an EU-US agreement is not necessary.”
Trade landscape in flux
The 22 September meeting between Malmström and Froman comes during a busy period for both trading giants in various concurrent international negotiations, with some overlapping areas and many approaching deadlines.
One of the most high-profile efforts is the US’ push to conclude a wide-reaching deal with 11 Pacific Rim partners, known as the Trans-Pacific Partnership (TPP). While the talks have long been said to be in the final stages, election cycles in major TPP economies such as the US and Canada have given a renewed urgency toward finishing the talks soon, before difficult negotiating decisions become politically untenable.
The EU is also involved in a series of major trade processes, including negotiations with Japan for a “highly comprehensive and ambitious” agreement which officials aim to conclude as soon as possible, ideally by year’s end. Negotiators from Brussels and Tokyo concluded their 12th round of talks last week in the Japanese capital city, with a separate session on the deal’s investment chapter scheduled for later this month and another negotiating round slated for the end of October.
At the same time, negotiations at WTO headquarters in Geneva for an outcome at the global trade body’s upcoming ministerial conference in Nairobi, Kenya, are showing signs of strain, as members continue to be at odds over the level of ambition of any package of outcomes for the end-year meet – and what implications its results could have on global trade. (For more details on the WTO talks, see related story, this edition)
Meanwhile, completed TTIP and TPP deals would together mean “free trade with somewhere around two-thirds of the global economy,” Froman said on Tuesday in a separate speech in Washington, with both serving as possible platforms to which “additional countries could potential accede.”
The latter appeared to be a potential reference to some of the concerns raised by third countries that they could be left out of these new “mega-regional” trade frameworks, while being significantly affected by how these rules affect trade flows and practises.
“When that kind of critical mass embraces high standards and modern rules of the road, it makes it much easier to advance those objectives at the multilateral level, across the economy as well,” the US trade chief said.
ICTSD reporting; “MEPs react to new TTIP court proposals,” BBC NEWS, 22 September 2015.