Negotiations on the Transatlantic Trade and Investment Partnership (TTIP) officially started last Monday, July 8th. 150 negotiators from the EU and the US gathered in Washington for one week to discuss how cooperation should best progress in the various areas which the agreement is expected to encompass. These include, among others, energy, investments and financial services, agricultural goods, intellectual property rights and state-owned enterprises. The negotiators also met with a large number of stakeholders to gain a first-hand understanding of how the TTIP is perceived and how people believe it will affect them and their commercial interests.
As tariffs between the EU and the US are already extremely low, it is expected that much of the TTIP will focus non-tariff barriers to trade or NTBTs. As The Economist reports, these can be quite substantial:
NTBTs include measures such as consumer safety standards, (import) quotas, shipping and transport restrictions and the preference for domestic products in government procurement contracts.
However, it will be difficult for both sides to reach a compromise on some of these issues. With regard to consumer safety, agriculture and food standards will pose a particular challenge. Overall, Europeans remain strongly opposed to GMOs, which are commonplace in the US – both as human consumables and as components of animal feed. Yet while the EU has stated that “[b]asic laws, like those relating to GMOs or which are there to protect human life and health, animal health and welfare, or environment and consumer interests will not be part of the negotiations,” there are indications that the EU may in fact be more willing to compromise on these issues than most believe. In a particularly insightful article, Glyn Moody of TechDirt uncovers and exposes some of the parallels in wording between a leaked EU position paper and previous statements made by Monsanto and the US government regarding GM foodstuffs.
If both sides do manage to overcome their particular sensibilities and conclude a truly comprehensive agreement, the outcome could be impressive – perhaps even leading to an increase in output of more than the 0.5 percent claimed by the European Commission as The Economist explains:
The TTIP is seen as a potentially indispensable measure to leverage Western influence and power as emerging economies gain in status and slowly move from the periphery to the centre of the world economy. Javier Solana summarizes the consequences of this for Europe:
What this means is that the European states are too small to compete separately in the world of the twenty-first century. It’s as simple as that. By 2030, according to the World Bank, there will be two billion more people, mainly Asians, in the middle class. The pressure on the planet’s resources, commodities, water, and food will be huge, making a global rebalancing practically inevitable. And in a world marked by interdependence and constant change, Europe will find that unity is strength.
The next round of talks on the TTIP will take place at the beginning of October in Brussels.
(Flickr image courtesy of temaki)