TTIP negotiations: state of play summery after round 7

03.10.2014
Helmut Scholz, MEP

Round 7 had regulatory cooperation in its focus, with extensive presentations and discussions with representatives of various regulatory agencies. However, teams continued their negotiation efforts also on a number of other topics.

On market access for goods, the European Commission is still not satisfied with the U.S. offer. While the EU is ready to abolish customs for 98% of all tariff lines for goods, the U.S. offered only 80%. The Commission insists on a revised offer before continuing the talks. Meanwhile the U.S. did produce a document on market access for agricultural goods and will soon produce a consolidated text on that aspect, which the Commission will share with Member States (MS) and European Parliament (probably still reading room).

On agriculture, the Commission has reiterated concerns regarding the U.S. Farm Bill (their equivalent to the CAP), as it contains provisions such as state support for insurances that amount to 10 billion US$ in export relevant subsidies. The figure was confirmed to be in line with USDA estimates.

Being of relevance for Cyprus and other Mediterranean MS, the Commission emphasises on the rules for olive exports as an example for unnecessary costs arising from the U.S. rule of 100% inspections for each shipment prior to boarding.

Market access in services was also discussed. Both sides emitted a statement that they do not want to take commitments on public services. But this is different when Member States have at least partly opened a sector to the private market. For all those the U.S. want to negotiate on health and education services. They also questioned reservations declared by several MS and point out that these would be nullified by EU internal market rules, because if one MS chooses to allow establishment, this company could than operate in other EU Member States as well. In fact, we can currently observe that DG MARKT addresses non-compliance issues with the EU services directive concerning accreditation of private university education providers in Slovenia and investigates a complaint by A&O Hostels about state subsidies for the German Youth Hostel Network (Jugendherbergswerk).

While fresh water supply services can be exempt if not already open to private operators, waste water treatment shall fall fully into the scope of the services chapter.

Several issues become more and more clearly major obstacles to an agreement. First of all the EU approach of protecting Geographical Indicators (GIs). There is strong resistance to this in U.S. congress, in particular among Republicans. At the negotiating table, the U.S. listens to EU attempts to illustrate the approach, but does not issue any statement nor commitment.

The U.S. continues to refuse to talk about maritime coastal transport, as the Jones Act is in public and Congress attention.

On public procurement, a major offensive interest of the EU, there is a 60% commitment from the U.S. for the federal level and certain agencies, but so far no move to meet the EU demands for states and cities.

The U.S. also continue to refuse to meet the EU demands concerning financial services.

On telecommunication services, a consolidated text will be produced soon. Differences remain on the scope of liberalisation, access to facilities and U.S. rules on limiting foreign shareholding.

On e-commerce, the U.S. strive for a horizontal chapter, including commitments on all digital products. This could affect culture and audiovisual services, hence the Commission is reluctant. But the Commission offered to take full commitments on specific services concerned.

The U.S. are also supposed to prepare a consolidated text for the SPS chapter before the next round, and after intensive discussion in Round 7 about the EU proposal for this chapter. The U.S. remain reluctant to address animal welfare in this chapter, although the EU text proposal contains only a few soft lines. The SPS chapter will be highly relevant for the issues of GMOs in seeds.

The discussions on chemicals, pesticides and cosmetics have also advanced. The question of accepting equivalence in testing methods is the key issue at stake for these sectors. For instance regarding animal testing, the Commission has proses to the U.S. Government to issue a letter to U.S. corporations signalling the acceptance of alternative testing methods, as it is suggested that the corporations opt for animal testing in case they are not sure other methods would still allow for market accreditation of their products. The question arises whether this indicates that the Commission is ready to accept EU market access for animal tested U.S. products, but aims to persuade the American companies to use more alternative methods. The U.S. are challenging certain EU measures like required labelling on packaging of GMO or nano-technology content in a product.

This leads to regulatory issues in general. There is a conflict regarding Technical Barriers to Trade (TBTs) and regulatory procedures. The U.S. have a presented a paper that would require from the Europeans to give up their own approach and adopt the American procedures instead. The Commission does not accept this text as a basis of discussions. Methodically the U.S. want their own "notice and comment" system to be applied for developing regulations. This would increase the input opportunities for commercial stakeholders.

Concerning the horizontal chapter on regulatory cooperation there are still discussions about the objectives. The U.S. have not yet presented their own paper, as internal discussion are still going on. The EU urges to produce the text prior to the next negotiating round.

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