25 March 2014

No progress points to one thing: no need.

Both sides cannot compromise, nor should they. So lets quit while we’re ahead.

Simon McKeagney, Editor

It has been a bizarre few weeks in the world of EU-US free trade talks, and it’s only going to get odder. Nine months into the negotiations for the Transatlantic Trade and Investment Partnership have resulted in nothing but headaches for all involved.

Most of that time was spent dancing around the trickier issues, such as “regulatory cooperation” in which the US will accept nothing but a complete overhaul of our regulatory procedures. This, we are told, will be figured out later.

So the focus turned recently to the easy things, like tariffs- a core aspect of any traditional trade agreement. Now even this has proved a challenge. Last month Trade Commissioner Karel De Gucht complained about the lack of ambition from the US side when it came to their offer to reduce tariffs. The EU was willing to remove 96% of them, while the US gave a figure of less than 80%. De Gucht suggested that this offer couldn’t even form the basis of an agreement it was so unambitious.

No, no and no.

That both sides are getting bogged down by something as easy to negotiate as tariffs has made the Commission nervous. Perhaps they have bitten off more than they can chew, and put a lot of political capital on the line. The loud and grandiose claims about what TTIP would achieve has been replaced by more subdued tones, and no promises. No promises. No progress.

This became more evident when Ambassador Froman and Commissioner De Gucht met for their ‘stocktaking’ event in February, and were unable to identify any offensive interest area that had progressed in a positive direction.

The Europeans are adamant that financial regulation is part of the deal. The Americans say no. The Americans are crystal clear that their offensive interest is to sell their pork, beef and poultry to the EU. Europe says no way- not when doing so would dramatically compromise our food standards, given the chemicals, hormones and other processes used in their manufacture.

Citing energy security concerns, Europe wants some guarantee that the US will export their natural gas to Europe. But the US are toying with retaining this energy resource to drive down prices at home, or to export it to an Asian market, where prices are more competitive. So, again, a ‘no’.

On public procurement, Europe wants to end the autonomy which many US-states still have in deciding whether to open a procurement to international bidders. And for the US states already obliged to tender internationally, the EU wants to phase out what they call ‘discriminatory’ laws that promote SMEs or local businesses, a disadvantage to European companies, known as “localization barriers to trade”. US states are worried this liberalisation will negatively impact local food programmes like Food to School and Food to Prison which support sustainable, locally grown food initiatives. The US government does not want to invest political capital in dragging states into something they don't want.

Lots of smiles and handshakes, but no side is delivering the goods.

Blind leading the blind

On transparency- the negotiating teams here and in the US are taking a hammering from civil society and public representatives who remain in the dark on the details of the talks. Negotiating teams themselves are blaming the other side for their lack of transparency, as reasons for not having their own.  

No representatives, either in Congress or at the European Parliament have seen the negotiating texts of the other side. Neither have member states, and certainly not the hundreds of NGOs with many well-founded concerns.

This means that the largest bilateral trade deal agreement in the world is being negotiated in secrecy by a handful of technocrats. They were never elected, yet they have in their capacity the ability to impact hundreds of millions of lives.

To their own admission- DG Trade has never experienced such public interest in a trade deal. They’re not used to it. Leaks of EU position papers have moved them to readdress language, and reports into privileged corporate access has dragged DG Trade and USTR into making changes to their advisory models to support more input in the name of public interest.

This shows firstly, that they recognise that transparency concerns are well justified. Secondly, it is now very obvious that public interest has about as much luck as a snowball’s chance in hell of being the main focus and the core pillar of this agreement, when private interests have represented the overwhelming majority of “advisors” feeding into the process. As one commentator put last week, TTIP is a complete “stitch up”.

Moreover- member states, state-level representatives, Congress, MEPs- are all livid that they are locked out of the progress. How do they expect to pass a deal, when they’ve managed to frustrate and worry the very people who they are asking to support it with their votes down the line? And will the public continue to buy into the official lines of jobs and growth, when so many credible sources are rubbishing their figures?

Roll out Obama

The 4th round of negotiations last week revealed much of the same as before- no progress. But even no progress managed to make less progress. Out of the blue- cars, an area the EU expected would be as much of a breeze as tariffs, is now looking impossible, with the U.S National Highway Traffic Safety Administration “reluctant to even more forward in the discussion” on regulatory equivalence standards for vehicle safety.

Then things took a stranger turn- the US accused Europe of not being ambitious enough on their tariff offer! Although an unprecedented 96% was offered by Europe- that magical 4% represents agriculture, where the real benefits can be made in exports from the US.  How Europe has managed to go from the accuser to the accused in less than a month is, well, odd to say the least. If the US pushes for a complete elimination of all tariffs, there is little chance it will go down well in member states, or be passed by the European Parliament.

And so we are at an impasse both on the complicated sector-related issues, and the cross-cutting general goals of TTIP. Both sides are giving no ground, and nine months has shown no willingness to find a place in the middle. 

If only there was a knight shining armour to reinvigorate TTIP? Obama visits Brussels on Wednesday, which may inject some energy into a deal on life-support. The on-going crisis in Ukraine could deflect attention, but it is clear that the momentum is already wavering, and is in need of a boost.

Remembering that TTIP is not so much about trade, but about regulation and standards indicates how much of a political project this actually is.  It will be high-level political forces who will ultimately drive or end it. Unfortunately when leaders like the British prime minister calls the deal a “once-in-a-generation prize” that they are “determined to seize”- it is hard to see how our political leaders can walk away from it now without losing face.

But if we are seeing no movement toward consensus on any front- and more division now than six months ago, why not call it a day? Why should they keep galloping towards something that no one wants, and that presents such a long list of risks to our democratic processes and our citizens? What exactly is the point? Quitting while we are ahead may be better than flogging a dead horse down the road.

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