European Union: The Transatlantic Trade And Investment Partnership

Last Updated: 23 May 2016
Article by Kate Curneen and Andrew Bates

Most Read Contributor in Ireland, July 2017

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 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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.