Bordelex | 23 October 2015
In brief – TTIP: where we stand
Tariffs: Two offers tabled by both sides so far. After Round 11, 97 percent of tariff lines are due for immediate elimination. The remaining 3 percent will be left for the final stages of the negotiation. Negotiators have declined to comment on which sectors are included in the 3 percent list. Given the ‘peak tariff’ profile of both countries it is reasonable to assume that these are concentrated in the agricultural sector and some sensitive industrial sectors, such as possibly automotive. The EU has higher average tariffs than the US and would need to do most of the heavy lifting.
US average bound tariff for allsectors is tariff 3.5 percent ad valorem. For agricultural products the figure is 4.9 percent.
The EU’s average bound tariff is 5.2 percent. For agriculture, the figure stands at 13.5 percent.
Services: Two offers tabled so far. The services offers were also discussed in Miami this week. Financial services are still officially off the table though there are intense discussions underway notably on the ‘prudential carve-out’ which exempts governments from classic trade disciplines to safeguard financial stability.
Government procurement: both sides aim to table offers by February 2016.
Horizontal regulatory coherence chapter: US pushing for significant horizontal disciplines on “good regulatory practices”. The EU’s proposal for a regulatory cooperation body is “still under discussion” so Dan Mullaney, USTR’s chief negotiator.
TBT chapter: US tabled its proposals this week. The EU has done this earlier.
Sectoral chapters on autos, chemicals, cosmetics, engineering, ICT, medical equipment, pesticides, pharmaceuticals, and textiles. There’s been little progress in two years on substance. EU chief negotiator Ignacio Garcia Bercero told journalists that both sides are “closer to determining of our key objectives in each sector”. The EU official added that there was “very good engagment between regulators on both sides” in pharmaceuticals. Both sides are aiming for mutual recognition of each other’s inspection regimes for ‘good manufacturing practices’, he explained.
SPS chapter: Joint text exists since July 2015, indicating relatively good progress compared to other topics.
Labour and environment: The EU tabled its labour and environment chapter proposals this week in Miami.
Energy and raw materials: EU requests for rules on this matter are still being explored.
Investment protection: no proposals yet.
Intellectual property: not many details so far. On Geographical Indications, a key EU demand, Dan Mullaney said: “there are still important differences of point of view”.
Customs and trade facilitation: the US has tabled proposals this week. The EU did so in March 2014.
Competition: EU proposals on cartels, state-owned enterprises and subsidies exist since 2014.
Rules of origin: the US has tabled proposals this week. There are no signs of an EU textual proposal on ROOs yet.
Data flows: No discussions so far on the issue. The EU is sorting out its data privacy regime and renegotiating its Safe Harbour agreement with the US. These are preconditions for any discussion on a text on data flows – and for the very existence of TTIP.
SME chapter: on good track.
General architecture of the agreement
The US tabled proposals this week in Miami. The EU has already made proposals on dispute settlement mechanisms (government to government).
Both sides are intensifying the pace of negotiations. EU and US officials said that meetings between formal negotiating sessions will become more frequent.
The US administration is trying to push for a conclusion of the agreement before the end of the Obama presidency, i.e. in one year. Dan Mullaney said the next four months would be determinant. The EU appears ready to wait it out and agree on an agreement that suits it best. Signs are the US is planning to make proposals based on the template offered by the just concluded TPP with Japan and other Asia-Pacific countries. This is not necessarily something EU would be ready to go for. Garcia Bercero said he was confident negotiations could be sustained sustained beyond 2016.