Last reviewed 23 June 2016

Good progress has been made between the EU and the USA in their ongoing negotiations on a trade agreement, the Transatlantic Trade and Investment Partnership (TTIP). Henrietta Clarke reports.

The 13th round of talks concluded in April with many chapters moving forward but significant strides remaining in some areas if the main elements of a deal are to be agreed this year. There was progress on better access to markets for EU and US firms, on simplifying technical regulations without lowering standards and on global rules of trade, including sustainable development, labour and the environment and a dedicated chapter for small and medium-sized enterprises (SMEs). Significant differences remain in such areas as services and public procurement.

Results of the 13th round

The objective of this latest round was to consolidate, or agree joint texts, in as many areas as possible. A huge amount of technical work had already been done and the task was to create joint texts and find compromises where necessary, particularly in the regulatory and rules areas. In all areas of the negotiations, when both sides have put forward proposals, they work on joining them together in one document. These consolidated texts still have many issues to be resolved and do not represent the final agreement.

Regulatory pillar

As with the previous round, discussion under the regulatory pillar took centre stage. The two texts on regulatory co-operation and good regulatory practices were consolidated. There were intense discussions on technical barriers to trade (TBT) with a particular focus on conformity assessment. The main interest of these discussions is to reduce the cost of obtaining a conformity certification in the USA for EU companies, especially in the engineering sector. Both sides have an interest in greater co-operation between their standardisers bearing in mind the differences between both systems. The aim is to make it easier to co-operate without changing either system.

Sectors

Good progress was made on sectoral discussions. Before the negotiations started, nine sectors were identified for looking at how to enhance regulatory compatibility. Discussions moved forward on cars, pharmaceuticals, medical devices, chemicals and textiles. Progress on engineering, pesticides, ICT and cosmetics was more difficult.

The EU presented its first proposal for pharmaceuticals, now published, which aims to help regulators work more closely together for better efficiency. Co-operation would take place in areas such as recognising good manufacturing practice inspections to avoid unnecessary duplication, exchange of confidential and trade secret information between regulators and supporting each other’s work on developing regulations in new areas that could lead to faster and cheaper approval of medicines. Both sides reserve the full right to regulate to achieve public policy objectives, and protect human and animal health and the environment.

The EU will table proposals on cosmetics, textiles, cars and medical devices before the next round planned for July and it intends to table a text proposal for a Chemical Sector Annex. The EU continued discussing how to identify areas of regulatory co-operation in the engineering sector, this time based on its idea for an Engineering Annex which would establish processes for regulatory co-operation in areas of common interest. Both sides discussed how to co-operate on pesticide issues.

Rules

On rules, progress was made in text consolidation on several issues, particularly in the SME chapter.

SMEs

This is the first ever chapter of this kind that the EU has negotiated in a trade agreement aiming to enable smaller businesses to make the most of the agreement. Progress was also made on simplifying customs procedures and reducing fees and charges to the benefit of SMEs in particular.

Sustainable development

Negotiators looked at labour, environment and cross-cutting issues. Both sides agreed on the importance of including commitments in the text related to the International Labour Organization core labour standards as well as effectively enforcing their respective labour laws. Another area of interest to both sides was ensuring protection of health and safety at work and decent working conditions. On environment, progress was made in areas of broad convergence including the conservation and sustainable management of fisheries.

Energy and raw materials (ERM)

There was discussion of trade in ERM. The EU set out its wish to include pro-competitive provisions for energy market access as well as provisions to promote sustainability and green policies. There is no commitment yet from the USA to accept an ERM chapter.

Investment protection

Discussions covered all substantive rules as well as definitions and reservations on investment liberalisation and protection. In-depth exchanges allowed the comparison of overall approaches and progress in consolidating text.

On investment dispute resolution, exchanges took place on the text proposals which had not been discussed in the last round. There was a detailed discussion of the EU’s proposal for an Investment Court System.

Market access

Trade in goods — non-agricultural goods

Both sides continued to narrow down the differences on the general provisions relating to trade in goods. Proposals to remove customs duties on the first day of the agreement were discussed. The majority of customs duties for industrial and fisheries products are now to be eliminated on day one except for tariff lines which the EU or USA deem sensitive. For these, a transition period will be considered.

Trade in goods — agricultural goods

Good progress was achieved on the least controversial provisions of the consolidated text on agriculture. On tariffs, the discussion focused on products within the 97% of lines covered by the second offer. Products identified as the most sensitive were not reviewed.

Trade in services and investment and public procurement

In the area of services, the EU’s objective is to gain substantial new market access for EU firms. Negotiations covered issues including financial services, cross-border trade in services, liberalisation of investment, domestic regulation, mutual recognition of professional qualifications, market access, telecommunications and e-commerce.

The USA tabled its text proposal for a general framework on mutual recognition in professional services.

There were extensive discussions on public procurement and the consolidation of texts was started. The EU underlined proposals which support transparency and non-discrimination and which properly reflect environmental and social considerations as well as labour rights in procurement procedures. The EU highlighted the importance of a single point of access to information on procurement opportunities, particularly to help SMEs participate in public contracts.

The EU believes that a lot of work remains to be done to reach a similar level of progress in access to services and procurement markets as in tariffs.

Looking ahead

The EU is keen to try to conclude the negotiations in 2016 but only if the deal is right. A further round of talks is planned for July to continue the work of consolidation in all areas so that there are only a limited number of open issues that will ultimately be resolved at political level. The EU wants the agreement to be the most ambitious, balanced and comprehensive one ever concluded by either the EU or USA. However, Trade Commissioner Malmström has said: “No EU trade agreement will ever lower our protection of consumers, or food safety, or of the environment.” “Any trade deal can only change regulation by making it stronger. We might agree with a partner that rules on the safety of medicines would be tougher than before, for example, but never weaker. No trade deal will limit our ability to make new rules to protect our citizens or environment in the future.”