Mythbusting the EU-US free trade agreement

What is the TTIP?

The Transatlantic Trade and Investment Partnership is the name of a trade agreement between the EU and the US aiming at removing trade and non-trade barriers in a wide range of economic sectors so as to make it easier to buy and sell goods and services between the EU and the US, as well as to increase investment possibilities for our companies in the US.

The European Parliament showed strong support for the launch of such negotiations in its two last Resolutions of 23 October 2012 and 23 May 2013, which were adopted by a large majority. The EPP Group was at the frontline of this strategy and support.

What's in it for the EU?

The impact assessment launched by the European Union before the start of negotiations in March 2013 suggested that the EU's economy could benefit by 119 billion euros a year and the US economy could gain an extra 95 billion a year - with gains of 545 euros for each EU family. These gains would be the result of removing tariffs and doing away with unnecessary rules and bureaucratic hurdles that make it difficult to buy and sell across the Atlantic.

The EU's economy could benefit by 119 billion euros a year and the US economy could gain an extra 95 billion a year - with gains of 545 euros for each EU family

Tariffs between the EU and US are already low (4% on average) but due to the huge volume of transactions the final gain is not irrelevant. However it is the cost of dealing with unnecessary bureaucracy which can add the equivalent of tariffs of 10-20% to the prices of goods, with substantial gains for European companies when these are abolished.

Who is going to benefit from the TTIP?

Negotiations for the TTIP will cover many areas of the economy, including manufacturing, services and agriculture. By removing barriers to trade, a balanced agreement will provide a boost to economic growth, create jobs and lower prices.

The economic growth and increased productivity created by the agreement will benefit workers in the EU and US

Exports from all parts of the economy are expected to increase, some of them more than others. Furthermore, as a result of increased demand for raw materials, components and other inputs, EU exports to other countries are also forecast to grow.

The economic growth and increased productivity created by the agreement will benefit workers in the EU and US, both in terms of overall wages and new jobs opportunities for high and low-skilled workers alike.

There are some examples of small businesses already exporting to the US who could see their business grow with an open market, such as those on the such as those on the New opportunities for business like yours site.

Will the TTIP automatically trump EU laws?

No, it does not and the EPP Group stresses that the TTIP must not and cannot overrule, repeal or amend EU laws and regulations. Any changes to EU laws have to be approved by the competent Institutions.

Are the negotiations being held in secret and why does a certain level of confidentiality have to be maintained?

The EPP Group considers that, for trade negotiations, a certain amount of confidentiality should be maintained, so as not to undermine the EU's own position in the negotiations. However, this confidentiality should be balanced by an accurate and appropriate flow of information to the other stakeholders and to the public, including the European Parliament and the Council.

AGRICULTURE and CONSUMER PROTECTION

Do I have to worry about existing EU standards of consumer, environment or health protection?

We believe that the EU should not negotiate on existing levels of protection for the sake of an agreement and therefore the high level of protection here in Europe is non-negotiable. The US has the same concerns and they are committed to high levels of protection. However we support the idea that improvements could and should be made to make our regulations more compatible, and that we should be willing to take a pragmatic view on whether we can do things better and in a more coordinated fashion.

What will happen to agriculture?

The negotiations on agriculture are crucial to having a balanced final agreement and we believe that opening up agriculture markets can be a two-way street with benefits for both the EU and the US.

In particular, the agreement can create tremendous opportunities for agro-food products where some of them, such as apples and various cheeses, are banned from the US market and others are subject to high US tariffs - 30% on meat, 22% on drinks and up to 139% on dairy products.

Furthermore, no sheep meat can be exported to the US due to strict US requirements on infectious viral diseases, and about half of the US states do not allow the sale of raw milk. Removing these and other barriers will help boost EU exports to the US.

Will the EU be forced to change its laws on Genetically Modified Organisms (GMOs)?

In the European Union’s current system, applications for approval are assessed by the European Food Safety Authority and then sent to Member States for their opinion. This risk-management assessment must not be affected by the negotiations.

The EPP Group opposes any change in EU laws as a result of the agreement

The EPP Group opposes any change in EU laws as a result of the agreement. We consider that the current legislation should continue to be applied.

Will European supermarkets be filled with meat from American animals fed with hormones?

The EPP Group considers that the negotiations should not be about compromising the health of our consumers for commercial gain.

Meat with hormones should continue to be banned in the EU market

Tough EU laws, like those relating to hormones, or those that exist to protect human life and health, animal health and welfare, environment or consumer interests will not form part of the negotiations; therefore meat with hormones should continue to be banned in the EU market.

The Commission has confirmed such an approach and is not negotiating on this issue.

CULTURE and AUDIO-VISUAL

Will Europe's film industry be killed off by a flood of American films?

Europe is not closed to American cinema, but has rules to protect Europe's cultural diversity.

The majority of the EPP Group has made it clear that the audio-visual sector has to be excluded from the scope of the negotiations. This sector is not part of the Council's mandate and is not negotiated.

INTELLECTUAL PROPERTY RIGHTS, DATA PROTECTION and INVESTMENT PROTECTION

Will the TTIP be ACTA through the back door?

We consider that the position of the European Parliament, which voted against ACTA, has to be fully respected and therefore there is no option of getting ACTA through the back door.

On the other hand, IPR (Intellectual Property Rights) will be part of the negotiations; both the EU and the US already have efficient rules for protecting IPR, maybe with a different approach.

We recognise that TTIP could make trade between the EU and the US easier for a limited number of important IPR issues without weakening these rules.

Will the TTIP mean US data privacy standards prevailing over or undermining EU standards?

We believe that both parties should regulate data privacy in a different way and therefore the TTIP is not the right place to address these differences.

The EU is in talks with the US on access to data by enforcement authorities with the aim of getting an Umbrella Agreement on data protection in order to combat terrorism and serious crime. These talks must not affect the TTIP.

Why is the EU including ‘Investor to State Dispute Settlement’ in the TTIP?

It is an issue which has been included in all the previous investment protection treaties negotiated by the Member States with third countries, including the United States. Therefore the EPP Group considers that it should continue to be part of the negotiations, since the possibility of appealing to an international body for arbitration would offer the foreign investor the best guarantee that their investments will be adequately protected.

Nevertheless the scope of the application of ISDS should be limited to a few precise cases, such as expropriation, and framed within a more transparent and improved procedure with better rules in terms of government control of and a code of conduct for arbitrators.

PUBLIC SERVICES

What about the effect on public services?

Public services are excluded from the scope of these negotiations. There is therefore no risk of undermining the free choice of EU municipalities on whether or not to liberalise such services.

REGULATORY CONVERGENCE

Are the EU and US going to harmonise their standards?

Harmonisation is not on the agenda of the talks and the EPP Group thinks it should stay that way.

The TTIP is not about trying to convince both parties to change their own system of regulation, but rather about finding ways to make the two systems work more smoothly.

Harmonisation is not on the agenda of the talks and the EPP Group thinks it should stay that way

Vehicles, pharmaceutical and medical devices are three areas where there is particular scope for regulatory convergence and the EPP Group considers that negotiators should make efforts to reduce such divergences, whenever and wherever it is possible.

STATE OF PLAY OF THE NEGOTIATIONS

The first round of negotiations took place in Washington in the first week of July 2013; after that two other rounds of negotiations took place, in Brussels in October and in Washington in December. This third round closed the first stage of the negotiations, where the two parties defined the scope and organisation of the negotiations and their respective purposes in achieving a satisfactory outcome.

On 18 February 2014 in Washington, Commissioner De Gucht and US Trade Representative Michael Froman delivered a joint statement in which they reiterated the ambition of these negotiations, the political willingness to conclude a deal as well as the concrete feasibility of a balanced and mutually satisfactory agreement.

There is still distance between the two sides, however, as the US offer on market access for goods is much less ambitious than the EU’s.

The crucial work is starting now as the two sides are launching the process of consolidation of a joint text.