TTIP offers would eliminate 87.5 percent of tariffs on entry into force
World Trade Online | 5 November 2015
TTIP offers would eliminate 87.5 percent of tariffs on entry into force
The tariff offers tabled by the United States and European Union during the 11th Transatlantic Trade and Investment Partnership (TTIP) round in Miami both eliminate duties on 87.5 percent of tariff lines immediately upon entry into force of the agreement, but hitting this mark was not a smooth effort, according to informed sources.
In a preliminary swap of their revised offers prior to the Miami round, the EU offer actually eliminated tariffs immediately for fewer than 87.5 percent of lines. It had reduced the proportion of tariffs going immediately to zero from its initial February 2014 offer, moving some of them into three-year and seven-year baskets (Inside U.S. Trade, Oct. 23).
The EU still regarded its offer as an improvement because it simultaneously offered to eliminate tariffs on some sensitive items — albeit for a period longer than seven years — it previously left undefined. This meant that the offer overall provided for tariff elimination over some period for 97 percent of tariffs, as agreed by EU Trade Commissioner Cecilia Malmstrom and U.S. Trade Representative Michael Froman in a September meeting.
The two ministers, however, did not agree on the proportion of tariffs that would go immediately to zero, sources said. Upon seeing that the revised U.S. offer increased the number of tariff lines that would immediately go to zero to 87.5 percent — up from less than 80 percent in the U.S. initial offer — Brussels scrambled to match that and adjusted its own offer to ensure that the same tariff lines on both would immediately go to zero, one source said.
The U.S. did not change its offer from what was presented before the round, the source said. In an Oct. 30 meeting with the member state officials, a representative for the European Commission explained that it changed its offer and also explained that no further market access offers will be exchanged until the negotiations enter the "end game."
EU Chief Negotiator Ignacio Garcia Bercero had previously said the EU would not negotiate market access on the most sensitive agricultural products, currently excluded from its offer, until the talks were in the final stages.
At that meeting, the commission also confirmed that EU Director-General for Trade Jean-Luc Demarty will meet with Deputy USTR Michael Punke, the U.S. political lead for TTIP, in early December to set the foundations for an exchange of government procurement offers in February.
The commission told member states that those offers will not cover sub-federal procurement or the U.S.’s "Buy America" provisions as those are politically sensitive issues for the U.S. and will also be left for the end game.
Member states have previously questioned the level of ambition the commission has pursued on procurement because Buy America provisions are not yet part of the discussion. Member states have prioritized gaining greater access to U.S. procurement through the elimination of Buy America provisions.
The EU and U.S. are also quibbling over the creation of a website that would detail import requirements, including tariff levels and regulatory requirements. The EU has been urging the U.S. to create such a site, which it says would mostly benefit small and medium-sized enterprises, but the U.S. has been cool to the idea based on the reasoning that it would be too complex, sources said. The U.S. maintains a website that details its tariff regime under various FTAs.
Member states are also pushing for greater access to consolidated TTIP texts in capital cities, sources said. Those texts are currently only available in Brussels and U.S. embassies in member state capitals. Member states want those texts to be available outside of embassy reading rooms as member states see having to visit a U.S. embassy as an unjustified restriction, according to sources.
Member states believe that their individual governments should have the same access to the texts as the U.S. government. The U.S. has thus far been unwilling to increase the access to those texts, citing the leaks of restricted EU documents as an indication that the texts would not be secure if available outside of its embassies.
