The bilateral trade relationship between the European Union (EU) and the United States (US) is the largest in the world, but it has been stagnating over the last decade. With a view to strengthening it and thus boosting their respective economies, in 2013 the EU and the US entered into negotiations for a wide-ranging trade and investment agreement – the Transatlantic Trade and Investment Partnership (TTIP). The 2014 European Business Summit (EBS), organised by Business Europe, devoted a session to the challenges and opportunities of the TTIP. The same day opponents to the agreement demonstrated in the streets of Brussels.
A potential opportunity for growth and jobs
EBS panellists discussing the TTIP included Karel De Gucht, EU Commissioner for Trade, and Anthony Luzzato Gardner, US Ambassador to the EU, as well as business representatives. Participants agreed that the TTIP is a big opportunity for both sides of the Atlantic. The European Commission is negotiating the agreement on behalf of the EU. In its 2013 impact assessment based on studies by ECORYS and the Centre for Economic Policy Research, the Commission presented potential economic and social benefits of a deal, estimating that this could lead to overall annual GDP gains of up to 0.48% for the EU (or €86 billion in national income) and 0.39% (€65 billion in national income) for the US, once fully implemented (2027). A detailed appraisal of the Commission’s impact assessment, written at the request of the EP’s Committee on International Trade, has just been published. According to Ambassador Luzzato Gardner, a TTIP agreement represents the biggest debt-free stimulus available.
Concerns and protests
Opponents to the agreement contest the Commission’s estimates, they also believe that the process lacks transparency and would mainly benefit big corporations. In addition, concerns have been raised about a possible weakening of environmental and safety standards, for example in the framework of regulatory convergence processes and through rules on investor protection and investor-to-state dispute settlement (ISDS). Among the initiatives taken by the European Commission to address these concerns is the launch of a public consultation on ISDS, open until 6 July 2014. According to EBS panellists, a number of misrepresentations are circulating, including on social media. For instance, Tim Bennett, Director-General of the Transatlantic Business Council, argued that an agreement would benefit small- and medium-sized enterprises (SMEs) more than other companies. Luisa Santos, Business Europe Director for International Relations, said that communication needs to be improved, but noted that this could prove difficult given the technical complexity of the topic. In Brussels, police forces arrested 240 persons who demonstrated against the EBS and the TTIP, including some Belgian Members of Parliament.
State of play in the negotiations
The 5th round of negotiations is taking place in Arlington (Virginia) this week, with a closing press conference scheduled on 23 May 2014 (live streaming). The EBS debate mentioned some possible sticking points on the way to an agreement, such as: the inclusion of financial services in the deal, which is supported by the EU and opposed by the US; and different level of expectations on the two sides of the Atlantic, since the US is negotiating at the same time another significant trade agreement – the Trans-Pacific Partnership. EU Commissioner De Gucht considers that the political window of opportunity for the deal is by the end of next year, before the US 2016 elections.
European Parliament
In 2013, the European Parliament endorsed the launch of comprehensive trade negotiations with the US. Following the Lisbon Treaty (Articles 207 and 218 TFEU), the EP has greater powers in the field of trade policy. All trade agreements must get the consent of the EP before being ratified. In addition, the European Commission must report regularly to the Parliament on the status of trade negotiations.
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