EU-US Transatlantic Trade and Investment Partnership

(TTIP) MEUSAC informative session

29/04/2014

Purpose of the Session

Explain EU process of negotiations of trade agreements

To highlight what is being negotiated in the EU-US TTIP

To give an update on the status of the EU-US TTIP negotiations

Provide information on a consultation process on Investment Protection provision

2 Economic Policy Department

EU negotiation process

European Commission negotiates FTAs obo of the EU and its MS as one entity

Provisions in agreements apply to all MS

However, on services and investment MS schedule their own interests through reservations

MS must sign and ratify and the EP must give their consent once a deal is concluded

3 Economic Policy Department

Purpose of FTA Negotiations

Enhanced economic growth through increased trade in goods and services and through an improvement in investment environment;

To establish market access between the negotiating parties through the removal of trade barriers;

Mutually beneficial and ambitious cross-border treatment benefits businesses and consumers

4 Economic Policy Department

EU-US TTIP Negotiations

In terms of tariffs, trade between EU and US is already very open: i.e. tariff rates already very low;

Negotiations are a result of the need to develop a framework for dealing with the regulatory divergences that hamper Transatlantic trade in goods and services and investment flows;

This was reported in the EU-US High Level Working Group on Growth and Jobs of February 2013;

5 Economic Policy Department

Four negotiating rounds have been held to date, the latest round being concluded in Brussels during March 2014.

Both parties have other ongoing processes: e.g. EU-Japan FTA/EPA; EU-ASEAN Deep and Comprehensive FTA; Trans-Pacific Partnership (on the US side).

6 Economic Policy Department

MS Involvement in Negotiations

The Commission consults MS through: ◦ weekly meetings &

◦ direct consultations on specific issues

Other processes: ◦ EU-US TTIP advisory group composed of business organisations,

environmental and labour experts was set up to provide advice to the CION;

◦ Specific consultation processes involving the general public, e.g.:

Pre-negotiation consultations and

Specific consultations on IP provisions in TTIP negotiations

Member States cannot negotiate trade agreements

7 Economic Policy Department

Negotiations are lengthy processes which may last years

Aim of TTIP is to conclude in just about 2 years (might be unrealistic);

4th Round of TTIP was held in the first half of March 2014

8 Economic Policy Department

The Content of the Negotiations

TTIP negotiations are covering 3 areas:

1. Market Access (goods, services and investment);

2. Regulatory Issues and Non-Tariff Barriers (NTBs);

3. Rules, Principles and New Modes of Cooperation to Address Global Trade Challenges and Opportunities

9 Economic Policy Department

EU-US TTIP: State of Play

The purpose of the initial rounds was to lay the groundwork and to be sure that in every area, each side has a good understanding of what the other is trying to achieve.

A major event was the political stocktaking exercise which was held between the 17 and 18 of February 2014. Both sides acknowledged that negotiations need to be stepped up.

It is expected that much of the substantive progress should occur throughout 2014 given the clear interest expressed politically by the two sides.

Economic Policy Department 10

Market Access Trade in goods:

Trade in services and investment including investment protection

Public procurement

Area Rationale

Duties on imports and exports Eliminate all duties on bilateral trade

Rules of origin Reconcile the EU and US approaches for trade

facilitation

General exceptions Articles XX and XXI GATT

Safeguards Eliminate serious injury to domestic industry

11 Economic Policy Department

Market access: state of play ◦ First tariff offer on goods was exchanged in February

2014 and a services and investment offer should be exchanged later on in the year

◦ European Commission indicated that the first offer of US was not ambitious

◦ However, there is consensus on sharing the mutual objective of a very ambitious outcome, and a new offer should be exchanged later on in the year.

◦ Negotiations on investment protection are currently on hold in view of the EU’s consultation process on this subject

Economic Policy Department 12

Regulatory issues and NTBs Five regulatory components:

1 Sanitary and Phytosanitary Plus Measures (SPS)

Go beyond the WTO SPS Agreement

2 Technical Barriers to Trade plus

Go beyond WTO TBT agreement on technical regulations, conformity assessment and standards Coherence

3 Sectoral annexes

Specific commitments for specific goods and services are being discussed

4 Cross-cutting disciplines on regulatory coherence and transparency

Develop and implement efficient, cost-effective, and more compatible regulations for goods and services: e.g. use of early consultations; impact assessments, periodic review of existing regulation and application of good regulatory practices

5 Framework to identify opportunities and guide future regulatory coop

e.g. Through provisions for an institutional basis for future progress

13 Economic Policy Department

Regulatory issues: state of play

On regulatory issues: ◦ Some text proposals on TBTs have been circulated

◦ The elements on SPS are being sketched out to form part of a chapter.

◦ Regulators are participating in a wide amount of discussions covering the following sectors: medical devices, pharmaceuticals, cosmetics, textiles, ICT, pesticides and automotive

Economic Policy Department 14

Rules, Principles and New Modes of Cooperation

The chapter will include areas such as: Intellectual Property Rights Trade and Sustainable Development Customs and Trade Facilitation Trade and Competition Trade Related Energy and Raw Materials Small and Medium-Sized Enterprises Capital Movement and Payments Transparency

15 Economic Policy Department

Rules: state of play

Some advancement was made in all areas but discussions are at an initial stage

Areas of specific interest include: a chapters on SMEs, sustainable development and energy and raw materials

The SME chapter is innovative for EU negotiations: aim is to increase transparency for SMEs to enable greater market access for small businesses

Economic Policy Department 16

Consultation Process on IP

A consultation process with the general public is being carried out on-line by the European Commission regarding the issue of Investor-State Dispute Settlement (ISDS).

The aim of the public consultation is to better define

the EU’s approach to investor protection and ISDS in the proposed EU-US TTIP negotiations by allowing all stakeholders an opportunity to provide their reflections.

17 Economic Policy Department

Purpose is to establish an Investor-State Dispute mechanism which incorporates both transparency and balanced state regulation to implement public policy; It also clarifies the points the EU aims to improve to ensure that ISDS in EU-US TTIP guarantees the right of governments to legislate in the public interest. Composed of 12 questions covering various aspects of investor protection and Investor State Dispute Settlement issues; Process is open till 6 July 2014

18 Economic Policy Department

Consultation Process on IP

Questions cover the following aspects of IP 1. Scope of the substantive investment protection

provisions

2. Non-discriminatory treatment for investors

3. Fair and equitable treatment

4. Expropriation

5. Ensuring the right to regulate and investment protection

6. Transparency in ISDS processes

19 Economic Policy Department

Consultation Process on IP

... 7. Multiple claims and relationship to domestic courts

8. Arbitrator ethics, conduct and qualifications

9. Reducing the risk of frivolous and unfounded cases

10. Allowing claims to proceed (filter mechanism)

11. Guidance by the Parties (the EU and the US) on the interpretation of the agreement

12. Appellate Mechanism and consistency of rulings

20 Economic Policy Department

Links to IP consultation process

◦ Consultation Homepage (open until 21st June 2014): http://trade.ec.europa.eu/consultations/index.cfm?consul_id=179

◦ Consultation Notice:

http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152279.pdf ◦ Consultation Main Document:

http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152280.pdf ◦ ISDS Fact Sheet:

http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152273.pdf

◦ FAQs: http://europa.eu/rapid/press-release_MEMO-14-206_en.htm

Websites on TTIP

European Commission website for latest updates and general overview: http://ec.europa.eu/trade/policy/in-focus/ttip/

The official United States Mission to the European Union website: http://useu.usmission.gov/ttip.html

The official Trans-Atlantic Business Council: http://transatlanticbusiness.org/eu-us-trade-agreement/

Contacts

Economic Policy Department: ◦ E-mail: economicpolicy@gov.mt

◦ Tel: 21249359