10 March 2014

EU-US Free Trade: 4th round of talks begin today

Areas of disagreement “still larger than the common ground” as talks continue in Brussels.

Simon McKeagney, Editor

"When we talk about T-TIP, some people think it is an extraterrestrial" admitted EU Commissioner Karel De Gucht at the end of February, following an EU-US ‘stocktaking’ on the Transatlantic Trade and Investment Partnership (TTIP). He was referring, one imagines, to the unhelpful use of the acronym and not to the content of the current negotiations, though much of this is also as alien to the public as life on another planet.

Continued secrecy surrounding negotiating texts has not helped, with civil society groups and national parliaments kept in the dark as to the current state of play. Not even EU member states have access to the US position texts, much to the frustration of the European Council.

This lack of transparency has not stopped hundreds of industry lobbyists impacting the negotiation agendas, which gives little hope that talks will “level-up” regulations and standards to protect people, the environment and the public good.

The dominance of industry cannot be underestimated in this regard. On 27 February The Washington Post creatively demonstrated how over 85% of voices in the US trade advisory system were from private industry or trade associations. On the EU side, the Corporate Europe Observatory revealed last year that 93% of ‘stakeholder’ preparatory meetings on TTIP were with ‘large corporations and their lobby groups’. On this basis, measures to keep talks in ‘stealth’ mode and thus avoid exposing industry-friendly stances is being seen as politically motivated- and presents even more of a reason for campaigners to get activated now.

Mounting Pressure, Little Progress

So far talks have ‘failed to narrow even the most fundamental differences in areas critical to the European Union, including government procurement and services’ according to Inside US Trade (Feb 20). The 4th round of talks are therefore likely to remain “explorative”, addressing the least controversial items from the gulf of divergence exposed at the stocktaking meeting. The US may produce position papers on localisation barriers, as well as energy and raw materials, with the EU covering global competition rules on mergers, anti-trust and SMEs for third countries. This avoids sticking points like regulatory cooperation, something De Gucht claims is the "the toughest nut to crack".

"Our negotiating teams have taken a close look at all the issues on the table. They have identified areas of common ground. And they have marked out the areas that need more work," De Gucht said. "Certainly, the marked-out areas are still larger than the common ground. But we now have a clear picture of the whole field."

But that clear picture is revealing many red lines on both sides of the pitch, in what will be a long and frustrating game for both sides. The US has not been forthcoming when it comes to the EU’s demand that new procurement rules apply for sub-federal level, allowing European companies to bid for tenders at state level. There is also no agreement on whether financial regulation will be included in the deal, something the EU is strongly insisting on but the US is adamantly against, for fear that some of Europe’s largest financial services companies could undermine recent financial reforms.

Meanwhile the US continues to challenge Europe’s precautionary principal, in areas like chemicals. Frustrated by the EU´s application of the precautionary principle, they hope to persuade Europe to change its stance on endocrine disruptors and nanomaterials (used in a variety of agricultural processes in the US.)

The same can be said for sanitary and phyto-sanitary (SPS) rules. Again, the US is pushing the EU to move to a “risk/performance based approach”, instead of based on the precautionary principle, something likely to be met by strong opposition in on this side of the pond.

Commissioner De Gucht has also riled up the US beef lobby, who he angered when he reiterated his stance on the imports US hormone treated beef in the EU at the end of last month: "I will not agree to put hormone beef on the European market or change our laws on genetically modified organisms." Against strong attempts by industry to change this, many hope De Gucht will live up to his word.

Even on the less controversial topic of tariffs and market access there is disappointment. The EU has judged the US offer on tariffs as completely unsatisfactory, after offering to phase out up to 96% of all tariff lines within 7 years of TTIP coming into force. This comes in sharp contrast to the unambitious offer by the Americans, with tariff reductions remaining below 80%. It is therefore unlikely that the 4th round of talks will include further moves on tariffs unless this imbalance is addressed:

"To our mind, this is not matched at this moment in time by what has been put on the table by the United States. And that means that it will have to happen in the near future" said De Gucht.

Rallying Support

While little progress can be seen from the negotiations themselves, the pro-TTIP PR machine is steaming full speed ahead. A leaked communication strategy from the European Commission called for ‘a new and “radically different” PR approach that could “reduce fears and avoid a mushrooming of doubts”’ as reported by Euractiv (Feb 27).

De Gucht, feeling the heat on ISDS and almost daily requests for access to negotiating texts by civil society groups, called on proponents to be “more vocal” in their support for TTIP.

"When I hear voices about TTIP in Europe, they tend to be the negative and the critical ones," De Gucht said in Washington. "I think business, but it's not only business … those who are in favour of TTIP should come out much more loudly and clearly if they want us to succeed."

And leading business lobby groups are answering those calls, with BusinessEurope and AmCham Europe writing an open letter in the Financial Times asking the public to “give TTIP a chance of success” (Feb 13) or claiming that are “no issues that could derail the negotiations” (March 5).

The ramping up of the pro-TTIP campaign by the business lobby indicates an underlining concern that negotiations have produced barely any quantifiable achievements. EU negotiators were warned by Markus Behyrer, Director General of BusinessEurope that “honeymoon phase was over” (Feb 28) in a thinly veiled call to get on with the job at hand.

Opposition has grown apace too. Last week the world’s largest trade union, representing 2.3 million German industrial engineers called for an immediate halt to TTIP negotiations citing concerns for consumers and workers. The German environment ministry are starting to ask questions, the first crack in support from member states. Civil society groups from both sides of the Atlantic are increasing active and coordinated, and Green MEPs are now actively campaigning against the TTIP agenda in its current form.

The 4th round of negotiations might have started today, but there is a long way to go before any side can claim a successful conclusion.





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