What is TTIP?

The Transatlantic Trade and Investment Partnership (TTIP) is, according to the summary from the European Commission, a trade deal aiming at harmonizing regulations and removing „non-tariff barriers” to trade in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US. The negotiations started in July 2013 and the 8th round has already taken place in February 2015. The chief trade negotiators are Ignacio Garcia Bercero (EU) and Dan Mullaney (US).

The negotiations have been split into 24 chapters divided among 3 pillars: market access, regulatory cooperation and rules. These chapters include agriculture, investment, public procurement and so on. Some areas, such as cultural sectors (which France lobbied) and financial services (at the US’s request), have been excluded from the negotiations.

Based on an independent study conducted by the Centre for Economic Policy Research, the EU and the US already make up more than 40% of world’s economy. Together, they trade $2bn (€1.4bn) worth of goods and services daily. If successful, the deal would create the largest free-trade agreement in the world.

Create a Genuine Transatlantic Single Market

The TTIP would bring new prosperity and strengthen shared values on both sides of the Atlantic. As for the EU, it would generate jobs and growth, which have been vital issues in Europe since the depression. Also, it helps the EU compete with the US’s “pivot” towards Asia and the huge Trans-Pacific Partnership (TPP). As for the US, it is a strategic move to strengthen US corporations, opening several sensitive EU markets, setting global rules as a Superpower and a response to the rise of Asia, especially China.

More importantly, negotiators intend to achieve “regulatory coherence”. As many EU and US standards are comparable but not mutually recognized, the cost of certification on both sides is rather high. Better regulatory compatibility and coordination would cut down costs by avoiding cross-recognition and further increase trades. As the current EU’s trade commissioner Cecilia Malmström said, the TTIP is more than an economic boost. It is also about who will set global standards for the regulation of goods and services in the 21st century.

Controversial Issues

Despite the overriding goal, the road ahead is not without hurdles. As a matter of fact, several controversial issues and the lack of transparency during the whole TTIP talks are posing a threat to democracy and the rule of law.

Agri-business and Food Industry

Currently, agri-business and food are one of the most contentious issues of the TTIP negotiations. The US is putting strong pressure on the EU to relax its food safety standards which are stricter than in the US. The products in question are basically genetically modified organisms (GMOs), hormone-infused beef and chlorine-washed chickens. By contrast, the EU fears that it might undermine its food and environmental laws and give too much power to US corporations. Indeed, Europe has long been GM-free and probably has the most stringent GMO regulations in the world, for human safety, animal health and environment. In January 2015, the EU lifted its EU-wide ban on GM crops, instead allowing Member States to impose their own restrictions that do not contradict European Food Safety Authority (EFSA) opinions. For now, the debate is brought forward but far from over.

Investment Protection: ISDS Provisions

The ISDS (Investor-State Dispute Settlement), which has existed for almost half a century, is a mechanism that gives companies the opportunity to take legal action against a State whose legislation has a negative impact on the company’s economic activity. Critics indicate that the ISDS undermines the power of national governments to act in the interests of their citizens. A Green Party European Parliamentarian Yannick Jadot called the ISDS “a massive Trojan horse, which could be used by multinational corporations to whittle away EU standards.”

Data Protection and Privacy Regulations

The US has proposed in the E-commerce chapter that would prohibit the EU from requiring personal data to be processed within Europe. While the US might see data protection as a barrier to trade and surveillance activities as part of its strategy, protection of privacy is a fundamental right in the EU.

Since the NSA Scandal (PRSIM) took place, while the TTIP negotiations were about to start, the EU became even increasingly sensitive to data protection and privacy regulations. President of the European Commission Jean-Claude Juncker outlined his 5 priorities before the Congress, and stated that he “will negotiate a reasonable and balanced trade agreement with the US.” He “will not sacrifice Europe’s safety, health, social and data protection standards on the altar of free trade. Notably, (the safety of the food we eat and) the protection of Europeans’ personal data will be non-negotiable”. ISDS may further undermine privacy.

The former EU Trade Commissioner Karel De Gucht claimed his worries about Europe. “It is not a naturally balanced agreement,” he said. “Both of us have a lot of defensives. But Europe has many more offensives than the US has.” In addition, he said, the US is in a more favorable economic cycle with “considerable growth” than Europe is, where the economy is stagnating. Indeed, the EU benefits more than the US through the TTIP. However, the TTIP talks risk faltering for the EU which is keener on access to the American market than it is for the US on access to the European market.

As the TTIP puts trade businesses in the driving seat, it is essential for both the US and the EU to overcome all these barriers in order to achieve their ambitious goals from each side.

The TTIP negotiations are, on the one hand, a defensive response to the rise of non-Western countries and on the other hand, an offensive move aiming to set up globally regulated standards and create the largest free trade pact in history. As mentioned above, the EU might be more eager to have it for its pressing need: economy boost, more jobs, etc. However, the price is rather high. Under the pressure of the US, the EU is considering to give up some of its strict standards for food, chemical products, labour laws, etc. so that the US corporations can export as much as they desire. All those concessions may threaten human safety, the environment as well as democracy.

In brief, TTIP is not just about economic benefits, but it is also driven by important geo-strategic and geopolitical considerations.


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