TTIP Negotiators Complete Tenth Round, Exchange Revised Services Offers

23 July 2015

Negotiators for a bilateral EU-US trade and investment deal concluded their tenth round of negotiations last week, exchanging revised services offers and reporting productive discussions on regulatory coherence.

The latest round, held from 13-17 July in Brussels, Belgium, marks the last before the summer break, though intersessional work is expected to continue in the interim. While more negotiating rounds are planned for later in the year, the official dates and venues for these have not been formally announced. A political review is also expected in early autumn. (See Bridges Weekly, 30 April 2015)

Market access

The market access component of the Transatlantic Trade and Investment Partnership (TTIP), as these talks are known, covers three main areas: tariffs, services, and government procurement.

Of these three, the key development highlighted by negotiators last week was the exchange of revised services offers. These occupied much of the week’s work, they said, with officials aiming to understand more what was provided in the new offers.

“Services is a key component of the transatlantic economy and therefore it is an area where both the European Union and the United States are seeking to achieve an ambitious outcome including commitments that go beyond what we have done so far in our [16] bilateral and multilateral agreements,” said Ignacio García Bercero, the EU’s chief negotiator for this agreement, at the closing press conference.

Dan Mullaney, the US’ chief negotiator in the TTIP talks, added that these new offers are now “much closer together in terms of expectation,” while reiterating earlier pledges that the EU-US negotiations will not do anything to  undermine either sides’ ability to provide public services.

Mullaney referred specifically back to the joint public statement by US Trade Representative Michael Froman and EU Trade Commissioner Cecilia Malmström earlier this year, where the two trade chiefs affirmed that any agreement involving either party does not in any way limit domestic governments from providing services in areas such as water, education, and health, nor do such deals require government privatisation of services. (See Bridges Weekly, 26 March 2015)

The EU has also tabled its textual proposal for a services chapter, officials said on Friday.

The two other market access components of TTIP – tariffs and public procurement – were not discussed at last week’s meeting. However, the two sides are reportedly aiming to set up a “framework” for speeding up the procurement market access talks, in order to then begin exchanging offers.

Regulatory discussions, rules, ISDS

García Bercero also told reporters last week that the two sides have found “significant convergence” on the five elements they should be able to achieve under the regulatory pillar of the agreement.

These include, he said, reaching agreement on good regulatory practices; achieving “greater regulatory compatibility” in nine chosen sectors, including cars, textiles, and pharmaceuticals; setting up a framework for future regulatory cooperation; and agreeing “ambitious” chapters on sanitary and phytosanitary (SPS) measures and technical barriers to trade.

Mullaney similarly characterised the talks on regulatory coherence as “productive,” while concurring that the two sides are continuing their technical work on trying to achieve greater regulatory compatibility in “economically significant sectors.”

The two sides also continued their discussions on trade rules, competition, customs, trade facilitation, small- and medium-sized enterprises, and state-to-state dispute settlement, the EU official confirmed. While there were “exploratory” talks on the issues of energy and raw materials, no decision has been made on whether to address this as a separate chapter within TTIP or across different areas of the agreement.

The EU also confirmed that it will be presenting an “ambitious” sustainable development proposal this September, which will be made public after submitted to the US.

No talks were held last week on investor protections or investor-state dispute settlement (ISDS), officials confirmed on Friday. That part of the negotiations has been on hold since January 2014, when the European Commission moved to suspend that element of the talks in order to hold public consultations on the subject. (See Bridges Weekly, 23 January 2014)

The Commission is now in the process of preparing a textual proposal for the TTIP talks on ISDS, building on the consultations that it has held with parliamentarians, the public, and member states, officials said. (See Bridges Weekly, 7 May 2015)

García Bercero added that this proposal will differ from previous iterations of ISDS, in line with the Commission’s pledges to reform how the mechanism is set up. No date has been announced yet for when this proposal might be tabled.

Timing?

With the talks now entering their third year, questions over the pace of the negotiations have persisted, particularly as other trade initiatives such as the Trans-Pacific Partnership (TPP), which involves Washington, race toward a possible conclusion and as the US prepares for its next general election in November 2016.

During their June summit in Germany, G-7 leaders called for TTIP negotiators to “immediately accelerate” their work, including through delivering an outline of a possible agreement by year’s end. (See Bridges Weekly, 11 June 2015)

Since then, the legislatures in both the EU and US have approved key trade-related legislation or resolutions, which are expected to give the talks a potential political boost.

On the US side, lawmakers approved the renewal of Trade Promotion Authority (TPA), a law that sets Washington’s principal negotiating objectives in trade deals and the terms for approving such agreements in Congress. The legislation was then signed into law by US President Barack Obama in late June. (See Bridges Weekly, 2 July 2015)

Shortly thereafter, the European Parliament signed off on a series of recommendations for what it would like to see in the TTIP talks. While that decision was non-binding, the report and accompanying resolution drew heated debate among parliamentarians, particular over what language to use regarding investor-state dispute settlement, given that the Parliament will be tasked with approving or rejecting a final TTIP agreement.

Ultimately, lawmakers approved the recommendations, calling for an “ambitious” and “balanced” deal that excludes public services, ensures high levels of protection for EU data relating to consumers, health, and safety, and keeps special treatment for sensitive agricultural and manufacturing goods, among other provisions. (See Bridges Weekly, 9 July 2015)

Officials from both sides highlighted these developments in their remarks, with García Bercero referring to both TPA and the European Parliament vote as having given negotiators “strong political wind in our sails” that allowed the two sides to make progress in all areas of the talks last week.

However, with the many issues still on the table and the big political decisions still to come, whether an outline will be ready by year’s end – or whether a full TTIP agreement will be reachable before Obama leaves office in 2017 – is expected to be a tough order.

“We have an opportunity to conclude TTIP negotiations during President Obama’s presidency, but this will require us to take advantage of every month and of every day available because we still have a lot of work to do,” Mullaney told reporters following the round.

García Bercero concurred, noting that the EU wants to make “all necessary efforts to try to conclude these negotiations with the Obama Administration” while also ensuring a high-quality, balanced outcome.

“I think at this point in time it’s a little bit difficult for me to tell you exactly how far ahead we will be by the summer of next year, but I would certainly very much emphasise that we are working very much to intensify our work on all areas and there is a lot of work to be done,” the EU official said.

ICTSD reporting; “EU TTIP chief negotiator: ISDS proposal being finalised,” POLITICO, 17 July 2015; “Progress or groundhog day after two years of TTIP,” EU OBSERVER, 20 July 2015.

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