Members' Research Service By / October 1, 2014

Public debate following the hearing of EU Commissioner-designate for trade Cecilia Malmström before the European Parliament

Written by Cornelia Vutz Now that Commission President-elect Jean-Claude Juncker has put together his desired team of Commissioners, they all…

© laufer / Fotolia
Written by Cornelia Vutz

Now that Commission President-elect Jean-Claude Juncker has put together his desired team of Commissioners, they all appear before the competent European Parliament (EP) Committee for scrutiny. To mark the start of the ‘grillings’ (hearings, the Center for Transatlantic Relations (CTR) at Johns Hopkins University’s School of Advanced International Studies (SAIS) and the EP Liaison Office with the U.S. Congress (EPLO) organized a viewing party and debate, beginning with the live transmission of the hearing for the Commissioner-designate for Trade, Commissioner Cecilia Malmström of Sweden. If approved, Malmström will represent the EU in negotiations with the US on the Transatlantic Trade and Investment Partnership (TTIP). EPLO Director Antoine Ripoll explained that while the EP does not officially have the power to reject individual Commissioners, it must approve the entire Commission before it can take office. Therefore, it has considerable political leverage to convince the President-elect to remove individual Commissioners-designates deemed unsuitable for the job. The Parliament has made use of this power in the past.

Cecilia Malmström
© laufer / Fotolia

Panellists agreed that Ms. Malmström made a very good impression. They remarked favourably on her focus on transparency and inclusive stakeholder consultations in trade negotiations. András Simonyi, CTR Managing Director, expressed his confidence that Ms. Malmström is aware of the great importance of the TTIP negotiations for the transatlantic relationship. He said that the US negotiating team will have a strong partner to deal with if she is approved. Participants added that TTIP, in turn, is very important for the development of the international trading system as it could mean the ‘exporting’ of US and European standards.

During the discussion the different priorities of EU and US stakeholders on TTIP became apparent. Many US policy makers do not understand or underestimate European skepticism of Investor-state dispute settlement (ISDS). These arbitration tribunals ensure protection of the interests of companies investing in another country and can be very powerful. Originally, such tribunals were created to make foreign direct investment more attractive to private companies by ruling against host countries that breached trade agreements. There have been issues with the Comprehensive Economic and Trade Agreement (CETA), a similar agreement negotiated between the EU and Canada. Problems arising from CETA are seen as setting a precedent: the German government has delayed signature of the text mainly because the Social Democratic coalition partner sees the ISDS provisions as endangering the ability of countries to regulate, for example to improve environmental standards. According to Marjorie Chorlins of the US Chamber of Commerce, however, ISDS is a top priority for the business community. Hendrike Kuehl of the Trans-Atlantic Business Council said the fact that even liberal Members of the EP are now willing to look at ISDS critically shows the high politicization of the issue in Europe. Ms. Malmström said that renegotiating CETA would mean that the whole agreement could fall apart, but added that ISDS would not automatically be included in TTIP. When pressed by S&D MEPs, however, she refused to rule out its inclusion in TTIP.

A common misconception among many Europeans is that US standards for consumer protection, labour, and environmental protection are low. While some examples, such as genetically modified organisms and chlorine washed chicken, have made headlines, US consumers also have stronger rights to sue companies for damages than in the EU. The Commission explained that the EU sometimes relies more on regulations, while the US relies more on litigation. Panellists agreed that TTIP is much more politicized in Europe than in the US. These differences of perception make communication and transparency even more important. András Simonyi emphasized that the US Congress and the EP needed to intensify their relationship. Antoine Ripoll concluded that technology has benefited consumer and environmental interests: in the age of Twitter, it has become more difficult to keep a political process, such as this, secret. Accordingly, MEPs welcomed Cecilia Malmström’s assurance that she would discuss with the committee chairman on how to confidentially share negotiation documents with MEPs.

Further reading:

European Parliament: Hearings of the Commissioners-designate, Briefing with background to the trade portfolio and Cecilia Malmström’s  hearing, background on TTIP , EU-US Transatlantic Trade and Investment Partnership: Detailed Appraisal of the Commission’s Impact Assessment

CTR: The Transatlantic Economy 2013, by Daniel Hamilton and Joseph P. Quinlan, Editors

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