Update: EU/US Trade Negotiations 4th July 2014

DAIL QUESTION

NO. 90

To ask the Minister for Jobs, Enterprise and Innovation the current position regarding the EU/US trade negotiations; if the progress to date indicates a positive result; and if he will make a statement on the matter.

– Bernard J. Durkan.

* For WRITTEN answer on Wednesday, 2nd July, 2014.

Ref No: 28729/14

Minister for Jobs, Enterprise and Innovation (Mr Bruton)

Since the EU Council’s Decision in June 2013, to start negotiations with the US on a Transatlantic Trade and Investment Partnership (TTIP), five negotiating rounds have taken place, the most recent taking place from 19-23 May in the US. This round covered extensive technical discussion on a broad range of issues including regulatory issues, sanitary and phytosanitary measures, government procurement, intellectual property rights, electronic commerce and telecommunications, environment, labour, small and medium-sized enterprises, and energy and raw materials. Some discussion has already started on the text of an agreement in relation to helping SMEs, technical barriers to trade and on competition.

The sixth round is due to take place during the week beginning 14 July, 2014. The EU Commission has indicated that the topics expected to be discussed during the next round include trade in goods and services, regulatory issues, government procurement, environmental protection and labour rights, energy and raw materials, and opportunities for small- and medium-sized enterprises. The latter topic is important for Ireland because it will enable our SMEs to win more export business in the U.S., where Enterprise Ireland has invested considerable resources to support its clients in that market. The EU Commission has indicated that, as in previous rounds, EU and US negotiators will spend a day with representatives of industry, non-governmental organisations, consumer groups, trade unions, professional bodies, and other civil society groups.

Negotiations on TTIP can be summarised as covering three broad areas:

The first is market access, for goods, services, and public procurement. The first tariff offers, that is, the immediate or phased elimination of import tariffs on an extensive list of goods, were exchanged earlier this year, and I expect that, over the next few weeks there will be further work and negotiations to extend the range of tariff free trade that can take place once TTIP comes into effect. On services, I understand that the US tabled its first offer last week, and Member States will meet shortly to discuss what has been proposed by the U.S. The Commission expects that the EU’s first offer on services will be ready soon. Naturally there is an important level of confidentiality about the detail of both sides’ negotiating position, but I am hopeful that the greatest level of market access can be achieved for our goods and services exporters and for those looking to extend access to the very large U.S. public procurement market.

The second area covered by the talks is “rules”, on trade facilitation (EU and US customs systems), state-owned enterprises (these should operate on commercial lines), on raw materials and energy (EU is looking for access to US oil/gas exports that are currently restricted), and on labour and the environment issues (no weakening of the high standards/protection applied by both parties). Coming to agreement on these will also serve to set the standards for other Free Trade Agreements with trading partners, reduce the complexity for small companies to comply with many different standards and market regulations, and to regulate markets in an open and transparent manner.

The third most difficult and complex, but most important aspect of the negotiations, is reducing regulatory burdens, which will involve a multiplicity of sectoral regulations. In areas of regulation covering important sectors such as financial services, environment, and health and public safety, there are legitimate but in many cases unfounded concerns about a possible lowering of regulatory standards. In fact, both the EU and the US are equally committed to retaining existing high standards that protect consumers. The objective of TTIP is to address differences in standards between our two economies, that can give rise to heavy compliance costs, while at all times maintaining the high levels of health, safety, environmental and other protection that is reflected in EU legislation.

Studies show that addressing regulatory burdens will yield the most net gains from the agreement. The Commission’s impact assessment suggests that between two thirds and four fifths of the gains from TTIP would come from cutting red tape and having more coordination between regulators. Consequently, progress in respect of regulation, through harmonisation, mutual recognition or convergence, is the most important means of capturing the largest benefits from TTIP.

It is important to see this as a two part issue: the process of how regulation is enacted, and the sector specific solutions being negotiated. How regulations are made needs to be more transparent, efficient and objective, with regulators deepening relationships in order to address emerging issues together, for example in setting standards for new technologies. Regulators are also discussing how to reduce the cost of meeting existing standards without affecting the levels of protection afforded by them.

Real progress on issues like car safety standards, ending double inspections at pharmaceutical and medical device plants, should, over time, reduce costs for business, regulators and consumers. It is important to note that while regulatory aspects are one of the main elements of the TTIP negotiations, there is nothing in the negotiations that should prevent or undermine the rights of both sides to regulate, and the level of regulatory protection on both sides, be it environment, food, consumer safety, will not be lessened.

As regards investment protection, the public consultation launched by the European Commission last March on the investment protection provisions of a future Transatlantic Trade and Investment Partnership, is still underway and will run until 6 July. All stakeholders have the opportunity to respond to this consultation, so that specific interests and concerns on investor protection and settlement of related disputes are well understood by the European Commission, and can be used to better define the EU’s approach to investor protection in the TTIP negotiations. The public consultation can be accessed at http://trade.ec.europa.eu/consultations .

Further information on the negotiations, including background documents, are available on the European Commission’s TTIP website. [ http://ec.europa.eu/trade/policy/in-focus/ttip ]

My Department recently engaged international expertise to examine the economic and other impacts TTIP and related potential opportunities. The focus of this study will be to identify key areas and sectors of the economy that will be impacted by TTIP. This work will help to inform our input to the European Union’s negotiating position and to identify appropriate policy responses to be deployed, to maximise the potential of this historic agreement and provide an assessment of the longer term implications for enterprise policy.

I hosted a Conference in Dublin Castle on 20^th June to look at the opportunities for Ireland from TTIP. This conference aimed at bringing together at political and senior executive level, Oireachtas members, representatives of various economic interests (including farmers and trade unions), Government Departments, Agencies and Regulators, in order to tease out the issues that lie ahead for Ireland.

At this stage it is too early to draw definitive conclusions about the impact of TTIP on our economy. However, initial assessments suggest that Ireland will benefit to a greater extent than the EU. Preliminary estimates point to a possible increase of 1.1% in GDP compared with a .5% GDP increase for the EU as a whole. This could give rise to an increase of 8,000 jobs over the implementation period of the Partnership.

As the negotiations advance, I will continue to look for an agreement that is comprehensive and balanced and one that delivers real trade and economic potential for our economy. In this context I recognise the need to minimise the impact of trade liberalisation and market opening on sensitive areas of the economy and will continue to express our position that any agreement would respect our broad trade interests and especially our interests in the agriculture sector.