United States and European Union Negotiators Hold 3rd Round of TTIP Negotiations

by White & Case LLP
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US and EU negotiators concluded on December 20, 2013 in Washington, DC the 3rd round of negotiations toward the Transatlantic Trade and Investment Partnership (TTIP). Toward the middle of the round, the Office of the United States Trade Representative (USTR) held an event at which US and EU civil society stakeholders gave presentations to advocate their respective desired outcomes for the ongoing TTIP negotiations. The US Chief Negotiator Assistant USTR Dan Mullaney and his EU counterpart Director Ignacio García Bercero gave remarks to the press following the round on the progress of negotiations, and fielded several questions.

24 negotiating groups met during the 3rd TTIP negotiating round, covering the entire range of issues the parties intend to cover under the Agreement; in this regard, AUSTR Mullaney specifically pointed to (i) industrial and agricultural goods market access and corresponding rules of origin (ROOs), (ii) technical barriers to trade (TBTs), (iii) sanitary and phytosanitary (SPS) measures, primarily relating to food safety, regulatory coherence and particular sectors, (iv) investment and services, including in regard to telecommunications, e-commerce, cross-border services and financial services, (v) government procurement, (vi) intellectual property, (vii) labor, (viii) environment, (ix) competition, e.g., state-owned enterprises (SOEs), and (x) small- and medium-sized enterprises (SMEs). He also noted that the parties discussed possible paths forward on other such issues as localization barriers to trade, raw materials and energy trade, and legal and institutional issues, e.g., dispute settlement.

  • On (i), AUSTR Mullaney noted that the US International Trade Commission (ITC) has now provided USTR with a study on the impact on the US economy of tariff elimination under TTIP, such that the parties were able to begin discussions during the 3rd round on goods market access, and will likely exchange market access offers in early-2014. On ROOs, Director García Bercero asserted that the parties have not yet held extensive discussions in this area;
  • On (ii) and (iii), which have been a TTIP focal point among officials and stakeholders since the parties announced their intention to negotiate the agreement, both the US and EU Chief Negotiators confirmed that they would seek to achieve in TTIP horizontal, cross-cutting commitments on regulatory issues in a wide range of sectors, and also reach specific commitments for certain individual sectors. In this regard, Director García Bercero noted that the parties could reach sector-specific commitments on automobiles, pharmaceuticals, medical devices, cosmetics, textiles, chemicals, and information and communication technology (ICT), e.g., mutual recognition of technical standards, of manufacturing facility inspections, and/or of conformity assessments. US and EU TTIP negotiators face significant political difficulty with respect to regulatory issues, as many powerful civil society stakeholders allege that the TTIP is a vehicle for deregulation; both AUSTR Mullaney and Director García Bercero clarified that the goal of TTIP negotiations on regulatory issues is to eliminate behind-the-border barriers without compromising the right of government to regulate in the public’s interest, e.g., on consumer, health, environment, privacy and other protections;
  • On (iv), particularly in regard to e-commerce issues and cross-border data flows, which have become a focal point of concern due to recent revelations about National Security Agency (NSA) digital spying activities, the US and EU Chief Negotiators emphasized the importance of ensuring citizen’s digital privacy; however, Director García Bercero asserted that "[d]ata privacy is not part of the TTIP negotiations […] [t]here are other [fora] where issues and concerns related to data privacy are being discussed between the United States and the European Union […] [b]ut the TTIP is not the right forum for overseeing those issues;"   

On raw materials and energy trade, Director García Bercero emphasized the importance of the European Union gaining a "clear guarantee of security of access to US resources;" AUSTR Mullaney noted on this point that an exception to US LNG export restrictions under TTIP depends on whether the Agreement contains language providing "for national treatment in national gas area." USTR’s position on energy exports in the context of TTIP negotiations will depend on whether the US Department of Energy and other official US entities deem such exports to be in the public interest, although the United States has typically provided its free trade agreement (FTA) partners national treatment with respect to LNG exports.

The US and EU Chief Negotiators both affirmed their commitment to achieving enforceable provisions under TTIP, and to the investor-state dispute settlement (ISDS) mechanism. Several civil society stakeholders allege that an ISDS mechanism is unnecessary between such economies with strong rule of law as the United States and the European Union; however, Director García Bercero pointed to the approximately 1,400 investment treaties to which EU member states are party, "all of which include an [ISDS] mechanism." He also noted that nine EU member states already have such investment treaties with the United States. AUSTR Mullaney further added that all US FTAs include ISDS mechanisms.

AUSTR Mullaney and Director García Bercero emphasized the importance of maintaining support for TTIP at the political-level over the long-term; both the United States and the European Union have highly active, influential and sophisticated civil societies that can provide support for TTIP as well as strong opposition to it. In this regard, the US and EU Chief Negotiators point to the need for a strong political commitment to concluding the Agreement, and for proactive engagement on the part of negotiators of stakeholders in order to minimize their potential political obstruction of such conclusion.

AUSTR Mullaney noted that, in early-2014, Director García Bercero and he will take "stock at a political-level of [progress thus far, and plan] on what [the parties] need to do to move this negotiation forward in the year 2014." He further noted that USTR and the European Commission are currently working on the negotiating round schedule for 2014.

Click here for a copy of remarks AUSTR Mullaney and Director García Bercero gave to the press.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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