Picture of Economic Consultant Tom Ferris, who comments on the iMF

Tom Ferris is a Consultant Economist specialising in Better Regulation. He was formerly the Department of Transport’s Senior Economist.

Other articles by Tom on TTIP Talks:

Transatlantic Trade Talks: What the new EU/USA Agreement might mean for Ireland? Published 15/04/16

Negotiating TIPP: Are the EU and USA getting any closer to a Transatlantic Trade and Investment Agreement? Published 01/10/15

Will a new Investor Court System be introduced as part of TTIP talks between the EU and USA? Published 27/10/15

 

 

 

 

The EU and the USA are facing mounting criticisms as they strive to get an early agreement on the Transatlantic Trade and Investment Partnership – see Table 1. With the leaking of numerous documents by Greenpeace, the TTIP negotiators are now on the back-foot in having to defend what has been agreed so far.

[1]

A lot has been agreed during thirteen rounds of talks. The most recent round ended on 29 April and the EU Chief Negotiator for TTIP, Ignacio García Bercero, concluded that the round was

“… part of a very intense period of the negotiations. We have a clear objective: to make as much progress as possible to achieve a balanced, ambitious and high-standard trade agreement with the US”.[2]

Table 1: What is the Transatlantic Trade and Investment Partnership?

The Transatlantic Trade and Investment Partnership, or TTIP, is a trade and investment agreement, which the European Union (EU) is negotiating with the United States.

The objective of TIPP is to remove tariffs, cut red tape and reduce restrictions on investment. This should make it easier for EU firms to export goods and services to the US. It should also make it easier for them to invest on the other side of the Atlantic. And, of course, the same would apply to US companies wanting to export to or invest in Europe.

TTIP would bring EU and US standards and regulations more in line with each other without lowering consumer, health or environmental standards. Companies would no longer have to produce different goods for the EU and US markets, helping them lower their costs. Consumers would benefit from lower prices and a wider choice of goods, confident that they meet the highest safety standards.

Source material.

 

For and against TTIP

What is emerging is that there are very differing views about the likely impact of TTIP. On the one hand, supporters of the partnership agreement are arguing that this agreement will cut red tape and reduce restrictions on investment on both sides of the Atlantic. On the other hand, opponents are arguing that this agreement could threaten consumer protection, social rights, health, agriculture, the environment and data protection.

Let us start with the positive case being made for Ireland. Quite positive views of the likely impact of TTIP on Ireland emerge from a consultancy report undertaken for the Irish Government. The consultants, Copenhagen Economics, undertook the study and it was published in March 2015. It is available on the Department of Justice website.[3] The consultants used economic models to provide an assessment of the likely impact of TTIP on Ireland. They concluded that

“Taking all these complex interactions into account, we find that TTIP will have an overall very positive impact on the Irish economy. We predict that TTIP would have increased Ireland’s GDP by 1.1% had it been implemented today. Using Ireland’s GDP at current market prices for 2013 of €175 billion as the base, the increase corresponds to an uplift of €2.0 billion to Ireland’s GDP”.

However, they do admit that,

“…Naturally these estimates are subject to uncertainty…”

 

On the opposition side, one need only refer to the views of the Atlantic-community.org, an online Think Tank, who argued in February 2014 that

“what individuals and civil society are most concerned and most vocal about regarding TTIP are the rights that are likely to be afforded to corporations entering newly liberalized markets across the Atlantic. They fear a situation where large, powerful companies are able to coerce and manipulate sovereign governments into doing their bidding, ultimately undermining national laws on food safety, environment, health, etc”.[4]

 

Greenpeace ‘Leaks’

On 2 May last, Greenpeace opened a Pandora’s Box when it leaked 248 pages of documents from the TTIP negotiations. Table 2 gives a flavour of the leaked documents.

 

Table 2 : Documents leaked by Greenpeace Netherlands. 2 May 2016

  • Greenpeace Netherlands released secret documents from the EU-US TTIP negotiations on 2 May 2016. They are publicly available at www.ttip-leaks.org
  • The 248 leaked pages comprise TTIP negotiating texts, including the US position, and internal EU documents outlining the state of play of the trade talks.
  • The classified documents cover thirteen chapters, addressing issues ranging from telecommunications to regulatory cooperation, from pesticides, food and agriculture to trade barriers.
  • A Q&A document explaining the release of the documents, including a full list of the documents, and what they contain, is available from Greenpeace.
  • Concise analysis of the content of the chapters of the negotiating texts relating to environment and public health are also available from Greenpeace.

Source: https://ttip-leaks.org/

 

European Commissioner Cecilia Malmström gave a quick response on 2 May, saying that there were a number of misconceptions about supposed leaks from the EU’s negotiations with the United States on TTIP. In particular, she pointed out that

“… so-called ‘consolidated texts’ in a trade negotiation are not the same thing as an outcome. They reflect each side’s negotiating position, nothing else. And it shouldn’t come as a surprise that there are areas where the EU and the US have different views…there are areas in the TTIP negotiations where we have come a long way, but in others we are simply not in agreement… many of today’s alarmist headlines are a storm in a teacup”. [5]

 

Will TIPP happen?

TIPP is far from being a done deal. President Obama’s recent visit to Europe tried to move the process forward. But the prospects of getting agreement before he leaves office are slim. In his recent statement, the Chief Negotiator for TTIP, Ignacio García Bercero, recognised the hard work that is needed to conclude the TTIP negotiations by the end of this year

“We are currently planning for another round before the summer break, most likely in July. The objective for this round would then be to continue the work of consolidation in all areas, so that we only have a very limited number of open issues (the so called ‘square brackets’) that will ultimately be resolved at political level. It needs to be the most ambitious, balanced and comprehensive agreement ever concluded by either us or the US”.

From an EU perspective, even if the negotiation process is successfully completed this year, the draft TTIP texts will have to be approved by the 28 EU’s Member States in the Council and then ratified by the European Parliament.

That is easy to say, but much harder to deliver in reality.

Even if agreement is achieved at overall EU level, there may still be agreement required at EU Member State level. Depending on the policy areas covered in the final TIPP agreement, the 28 national parliaments of the EU’s Member States might also have to approve the deal. So there is yet a very long way to go before TTIP can become a reality.

 

Notes

[1] http://www.greenpeace.org/eu-unit/en/News/2016/TTIP-leaks-update-Greenpeace-response-to-Commission-statements/

[2] http://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154480.pdf

[3] https://www.djei.ie/en/Publications/TTIP-Impact-in-Ireland-Study.html

[4] http://www.atlantic-community.org/-/ttip-top-5-concerns-and-criticism .

[5] http://trade.ec.europa.eu/doclib/press/index.cfm?id=1492

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