Brussels, 08/01/2014 (Agence Europe) - If they want to progress quickly towards a free-trade agreement to liberate new sources of growth and employment, there will have to be a meeting of minds between the EU and US on extremely thorny issues such as agriculture and sectoral regulatory convergence in industry.
After six months of work, completed at a third session of discussions in Washington on 16-20 December (see EUROPE 10989), the negotiations for a transatlantic trade and investment partnership agreement (TTIP) are now on a “good basis”, according to the two chief negotiators - Ignacio Bercero for the EU and Dan Mullaney for the US.
However, tangible progress will be crucial in 2014. A political update meeting in February - between European Commissioner for Trade Karel De Gucht and US Trade Representative Mike Froman, who will meet beforehand at the World Economic Forum in Davos (22-25 January) - should enable the negotiating parameters to be set more clearly.
The technical talks led by Bercero and Mullaney will resume in March at a fourth session of discussions in Brussels. The EU and UShave also planned to move on to an exchange of tariff offers on market access at the beginning of this year.
Several issues will need a great deal of flexibility including, primarily, agriculture. The Commission is repeating its desire for the TTIP not to allow the import of GMOs or of hormone-injected beef, pork or poultry. The free-trade agreement concluded with Canada could serve as a model as far as this is concerned. However, the US will certainly not accept export quotas below those offered by the EU to Canada for its beef and pork.
Among its offensive interests, the EU wants to obtain the protection of its geographical indications (GI). However, like Canada, the trade marks used in food processing in the US are the property of the company that uses them, which differs from the European system of GI authorisation by public authorities. While the EU obtained strengthened protection of 145 iconic GI names in Canada (see EUROPE 10948), the EU will have to negotiate firmly with its US partner.
Lastly, still on the issue of agriculture, the sanitary and phytosanitary (SPS) regulation is also a thorny topic. However, while a change in the rules on zero tolerance for any agri-food product imported is a red line for the US side, simplifications in the authorisation procedures for exports, avoiding “duplication and pointless differences”, can be envisaged, said Mullaney. And the EU and US parties agree on one point - both sides are determined that the TTIP will not lower the highest standards of protection for consumers.
The other large part of the negotiations is regulatory convergence in the different industry sectors that have much to gain from the TTIP, such as the automobile sector, cosmetics, pharmaceuticals, medical equipment, information technology and textiles. Here too, the EU and US will have to find creative solutions to avoid pointless regulatory costs due to duplication, and to agree on common standards in certain sectors, such as safety tests for motor vehicles.
The issue of financial services is also on the negotiating table, but the two partners have different ideas. Believing that the financial services regulation is managed more appropriately in the international framework, like at the G20, the US side does not want to include it in the TTIP. The EU, for its part, wants to ensure better cooperation between regulators on both sides of the Atlantic.
Lastly, the protection of investments is also a thorny issue. The EU and US will negotiate a protection clause for investors under the form of a dispute settlement mechanism between companies and states. This is of concern to NGOs and unions, which fear that such a mechanism might dissuade the states from regulating on social and environmental issues. The legal proceedings taken by world tobacco leader Philip Morris against Uruguay for having ordered an increase in the size of health warnings on cigarette packets set a dangerous precedent. (EH/transl.fl)