US, Italy Leaders Push for TTIP Outcome Amid Questions over Timeline

11 February 2016

US President Barack Obama and Italian President Sergio Mattarella publicly urged for finalising a major trade and investment pact between the United States and the European Union, just weeks before the trading giants are set to hold their first negotiating round of the New Year.

“We agreed that joint and common action between the United States and Italy not only serves the interest of both our countries, but the broader transatlantic relationship that has underwritten so much peace and prosperity over the last several decades,” said Obama following the bilateral meeting in Washington on Monday, citing the conclusion of trade talks as one way to boost such a relationship.

The Italian President, for his part, similarly stressed the two sides’ past history of trans-Atlantic cooperation, adding that the economic and trade partnership in this respect “is a very important approach because it can help us to avoid in the future additional, new economic and financial crises.”

Such crises, Mattarella warned, could in turn be devastating for some of the economic advances seen in developing countries, to the point whether these could “perhaps ward off or prevent any prosperity from being achieved in developing nations.”

WH official: deal unlikely before end of Obama’s term

The US and the EU have been negotiating a Transatlantic Trade and Investment Partnership (TTIP) since mid-2013, having launched the talks during a G-8 summit in Lough Erne, Ireland. During the early days of the negotiations, they had expressed hope of wrapping up a bilateral pact before the end of 2014. (See Bridges Weekly, 20 June 2013 and 18 July 2013)

That target has since been pushed back on repeated occasions, despite various attempts at reinvigorating the talks, which would cover the world’s largest trading relationship. Top EU officials, such as Trade Commissioner Cecilia Malmström, have said in recent weeks that they would like to see a deal this year, given that Obama is set to leave office in January 2017. (See Bridges Weekly, 4 February 2016)

Speaking to reporters on Monday after the Obama-Mattarella meeting, however, White House Press Secretary Josh Earnest cast doubts on whether a TTIP deal would indeed be reached under that timeframe.

“I do not believe that we’re going to reach a TTIP agreement before the President leaves office, but he’s certainly interested in moving those negotiations forward, and in a direction where we can be confident that the economy of the United States can be enhanced through the completion of an agreement, hopefully, under the leadership of the next US president,” said the White House official.

Earnest added that he did not have an updated timeline to share at this stage, while highlighting that TTIP is an Obama Administration priority.

TTIP Round 12: Investment proposal, public procurement

The twelfth TTIP round is set to take place from 22-26 February in Brussels, Belgium, with subsequent meetings planned for April and July. (See Bridges Weekly, 4 February 2016)

During this upcoming round, the two sides are expected to discuss their initial public procurement offers – the third pillar of the market access talks, which also includes goods tariffs and services – along with discussing for the first time the EU’s proposal for an investment court, among various other topics. (See Bridges Weekly, 17 September 2015)

US officials have previously questioned the need for such a court, with Trade Representative Michael Froman noting in October that Washington’s pacts are already of very high standard. (See Bridges Weekly, 12 November 2015)

“Because of the high standards and safeguards in our agreements, there have been very few cases against the US, and to date, the government has never lost,” he told Reuters at the time, responding to questions over the EU’s suggested investment court and appellate mechanism. “It’s not obvious to me why you would want to give companies a second bite of the apple.”

At the time, the EU had not formally tabled the proposal within the TTIP negotiating context. Now that it has, trade watchers will be looking to see how the US responds and whether the EU would be willing to revise aspects of the proposal, and if so in what way.

“We expect a constructive discussion,” EU Commission spokesperson Daniel Rosario told Politico.

The EU proposal hit another hurdle last week, after the German Association of Magistrates published an opinion questioning the need for a special investment court; the implications for domestic courts in individual EU member states; and whether it would actually have a legal basis, among other concerns.

Investment protections and dispute settlement have not been the only controversial element of the EU-US talks. Indeed, the proposed trade pact has drawn significant public scrutiny, particularly in Europe, over questions on both the level of transparency in the talks, as well as whether the content could affect domestic public policies in areas such as environmental and food safety standards.

Trade officials, for their part, have repeatedly worked to assuage these concerns, pledging that nothing in the planned pact will jeopardise consumer protection, environmental, or health standards. Brussels has also worked to make more TTIP documents public, including factsheets, policy position papers, and all EU negotiating proposals.

Bernd Lange, the chair of the European Parliament’s International Trade Committee, said last week regarding the continued controversy that it is necessary to “fight for a people’s TTIP and make a decision based on a final text.”

The German member of the Parliament’s Socialists and Democrats (S&D) Group added that the final text should answer both US and EU interests. “If there is no ambitious deal on the table, there will be no deal,” he said.

ICTSD reporting; “TTIP investor court illegal, say German judges,” EU OBSERVER, 4 February 2016; “EU faces tough sell on TTIP compromise,” POLITICO, 7 February 2016.

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