European Union: The Transatlantic Trade And Investment Partnership

Introduction

The Transatlantic Trade and Investment Partnership ('"TTIP") is a proposed trade and investment agreement that has been and remains the subject of negotiations between the European Commission and the United States since July 2013. TTIP envisages the creation of a common commercial environment between the two blocs leading to considerable joint economic benefits, as well as reinforcing well-established links between the EU and the US.

TTIP remains a work in progress, having recently concluded its 13th round of negotiations on 29th April, 2016 and it must be noted that it faces considerable opposition from many quarters.

Although we have sought to summarise its main aims below, many of its proposals have faced considerable criticism as has the lack of transparency around the negotiation process. There is a general lack of visibility of what the overall impact of the partnership would be and how it would affect, from a practical perspective, EU citizens, different business sectors and other stakeholders across the EU.

What does TTIP aim to do?

TTIP aims to strengthen the multilateral trading and investment system between the EU and the US through harmonised regulation, the reduction of customs tariffs, the provision of enhanced protection for investors and the opening up of new business opportunities in, for example, the services sector. The European Commission estimates that the formulating of a deal on TTIP could boost the economy of the EU by up over €100 billion per year.

Negotiation of TTIP is a large-scale and complex process. If agreed, it would be the most comprehensive trade agreement of its kind; it is estimated that it would affect approximately one quarter of all global trade.

In this note we discuss the key elements of the TTIP discussions, the arguments that are being made for and against TTIP, its potential impact on Irish businesses, and the status and development of negotiations.

Areas of Application

It is expected that TTIP will be broken down into four primary areas, as follows:

(i) Market Access

TTIP aims to facilitate enhanced market access by promoting trade and tackling customs duties and barriers to services exports. In addition, it is hoped that it may open up public procurement markets and help the EU and the US to agree rules of origin to determine the products that will benefit from TTIP.

(ii) Trade Rules To Address Common Global Challenges

It is hoped that an agreement can be reached that would provide an effective and efficient means of resolving any trade disputes between the EU and the US. Further measures contemplated include the promotion of the protection of workers' rights and rules aimed at preventing abuse of market power.

(iii) Investment Protection

Another one of the measures proposed is a framework for foreign investors to bring claims directly against EU Member States and the US by means of a separate arbitration process, rather than using the domestic legal system. It is argued that this would provide investors with greater certainty that their claims would be heard in an impartial manner and this would be supported by the adoption of agreed interpretations of the investment provisions of TTIP which would be binding on arbitration bodies. The proposals also provide for an appeals process to allow for the review of arbitral decisions. However, this proposal has caused controversy as some EU Member States do not have bilateral investment treaties with the US, with the result that they would become subject to claims that they would not have otherwise been exposed to.

(iv) Regulatory Convergence

TTIP envisages greater coordination between the EU and the US, with the aim of streamlining the technical requirements for products and access to information on the regulations pertaining to those products. In addition, there is a push for sector specific initiatives for particular industries, including pharmaceuticals, information and communications technology, agri-business and engineering.

The Benefits of TTIP

A study undertaken by the Centre for Economic Policy Research in London ("CEPR"), entitled "Reducing Transatlantic Barriers to Trade and Investment: an Economic Assessment"1, has highlighted potentially significant economic advantages for the EU as a result of TTIP. It forecasts that EU exports to the US could increase by 28% or €187 billion per annum, as a result of the partnership. Currently, EU firms pay over €3.5 billion a year in customs tariffs when exporting to the US - the streamlining of customs rules and controls, as well as eliminating direct additional costs, might avoid unnecessary bureaucracy for exporters.

The CEPR report also concluded that a comprehensive agreement targeting both tariffs and nontariff barriers could result in annual gains of up to €119 billion for the EU as a whole and up to €95 billion for the US. The introduction of harmonised regulations and standards should, it is hoped, result in substantial savings for businesses, in job creation and overall better value for consumers.

Additionally, TTIP's advocates indicate that it is expected to result in an expansion of trade between the EU other third countries as a result of increased demand for example, for raw materials and other goods. Exports of metal products to the rest of the world are predicted to increase by 12%, chemical exports by 9%, exports of processed foods by 9% and exports of other manufactured goods and transport equipment by 6%. TTIP is also projected to benefit SMEs, in increased exports as well as more demand from larger companies for their goods and services.

TTIPing Point?

Many stakeholders have however expressed criticism at several elements of the draft agreement and the lack of transparency around the negotiation process. Certain opponents say that there is no evidence that TTIP will actually cut the cost of products and that as such, it is impossible to quantify the likely financial benefit of the deal, if any.

The concept of regulatory co-operation is also the subject of much criticism, with opponents arguing that an international trade deal is not the appropriate forum for binding regulatory rules to be agreed as they are not subject to national democratic scrutiny.

It must also be noted that concerns have been raised by various groups as to what they see as consequences of TTIP, such as the weakening of food quality standards and consumer protection legislation, the erosion of employee rights, increased pressure on countries to allow high-risk technologies such as fracking or GM technology and the privatisation of important public utilities.

Potential Implications for Ireland

Ireland is a very open economy with significant trade with the US, the UK and EU (ex UK).

A report by Copenhagen Economics2 predicted that that TTIP would have an "overall very positive impact on the Irish economy"; improving our trade balance by circa €2.4 billion and resulting in investment increasing to a level 1.5% above what it would be without the agreement. According to certain projections, if Ireland benefited in proportion to the size of our economy, TTIP should provide us in the region of €800 million per annum in increased GDP, as well as potentially adding thousands of new jobs to the economy.

The report by Copenhagen Economics also found that although TTIP would lead to growth across a range of industries; the main sectors that would benefit would be pharmaceuticals and chemicals, electrical and other machinery, agri-food (notably dairy and processed food) and insurance.

Conclusion

The original TTIP timeframe envisaged agreement being reached by the end of 2014. Currently, it appears unlikely that a deal will be reached this year and a recent leak of confidential documentation3 in respect of the negotiations has caused somewhat of an outcry from particular quarters, with critics alleging that the deal poses risks for EU environmental protections, consumer rights, internet privacy and public health. In addition, over the course of the last week, it has been reported that TTIP has faced further increased pressure, with German Agriculture Minister Christian Schmidt contending that the US is failing to make 'any serious concessions'4 in the negotiation process.

Therefore, despite extensive talks, given the ambitious objectives and the multiple sectors affected, there is still much ground to be covered before the political momentum generated by the rounds of negotiations is actually translated into a practical, workable outcome that is acceptable to both sides. In addition, if or when the negotiations are concluded, agreement on the final text of the partnership could take up to a year. TTIP would thereafter need to be ratified by the national parliaments of all 28 Member States of the EU (or 27 Member States in the case of a Brexit; see Dillon Eustace's recent article " Brexit – an Irish Perspective.

Footnotes

1 http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf

 2 "TTIP impact in Ireland" – report by Copenhagen Economics for the Irish Department of Jobs, Enterprise and Innovation, February 2015.

3 http://www.greenpeace.org/international/en/press/releases/2016/Greenpeace-Netherlands-releases-TTIP-documents/

4 http://www.independent.co.uk/news/world/europe/ttip-trade-deal-under-threat-due-after-germany-claims-us-not-makingany-serious-concessions-a7019291.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions