TTIP’s 11th round starts in Miami but EU-US businesses see no sunny side

Cecilia goes “shopping” in America. Mrs Cecilia Malmström, Member of the EC in charge of Trade, travelled to New York to visit a few European SMEs, including Solstiss, a high-end lace manufacturer, as well as Nudie Jeans. The purpose of the visits was to discuss trade obstacles faced by these companies when trading across the Atlantic, such as cumbersome customs requirements, tariffs and overlapping bureaucracy. Photo taken during the recent visit of the Commissioner responsible for Trade to the United States (EC Audiovisual Services, 25/09/2015).

After almost three months since the last official meeting between the senior negotiators of the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) negotiations resumed yesterday in Miami. Unfortunately, at least for those who still believe in this gigantic trade agreement between the two blocs, the nice and warm location is just one of the not so many bright momentums of the negotiation procedure.

A slow process

Indeed the Miami talks come in a very delicate moment for the EU-US trade deal, and the outcome of the negotiations this time looks even more uncertain than in the past. This is certainly due to the general evolution of the TTIP works, which is beyond a shadow of a doubt going very slow and might also have reached a dead end: this week’s session is surely one of the last calls to boost the negotiation process. Moreover, some very recent happenings have also played a decisive role in TTIP’s “bad luck”.

First, the 11th round of the TTIP talks come after the US secured a very important position on the world’s trade stage, with the launch of the Pacific free-trade pact with Japan, Canada, Malaysia and eight other countries. The Trans-Pacific Partnership free-trade agreement or “TPP” that  the American government has been trying for 5 years, is now reality and this is not necessarily good news for the “sister” American trade deal, TTIP.

A TPP-effect?

The truth is that a positive effect on TTIP coming from the agreement of TPP, something many were foreseeing and wishing for, is unlikely to be on its way. Earlier this month, the European Trade Commissioner Cecilia Malmström greeted the news of the conclusion of the TPP as good news for world trade as a whole. “It is also good news for the trade negotiations between the US and the EU, because with TPP done we will be able to approach our TTIP negotiations with an even greater focus from both sides”, she declared during a press conference.

The risk that there’s no real connection between a US success with the TPP and a possible “greater focus” on TTIP is high though, especially due to the substantial difference between the two agreements: while the US were striving to lower sensibly the trade tariffs barriers with the other TPP negotiators, there’s no big tariff issue with the EU, where trade taxes are already very low compared to all their other trade partners. The problem with the EU lays basically on three pillars: digital trade, harmonizing regulations for food and cosmetics and intellectual property.

A bad vortex instead

Moreover, the biggest danger for TTIP backers now is that there might be a sort of bad TPP-effect instead. Even though the attention of the American investors would not automatically and immediately shift eastbound, a growing appeal of the Canadian-Asian-Oceanic bloc is somehow due.
The only hope among many TTIP “lovers” today remains that the TPP will serve as a wake-up call for the EU, which simply cannot think of being a bystander anymore in the international trade field.

Protests gain surely momentum though

The other bad news for the EU-US agreement is that protests are certainly not easing either. Numbers indeed show that the opposition is stronger than before at both sides of the Atlantic, especially in the Old Continent.

After the Stop-TTIP movement drew at least 150,000 people to a protest in Berlin less than ten days ago, on October 10, anti-TTIP mobilisations were truly flourishing everywhere. At least 100 people were arrested in Brussels last week while hundreds were marching against the “precious” transatlantic trade treaty and European austerity policies in general. Another 2,000 people were protesting against TTIP in Brussels last Saturday as well.

Many TTIP opponents argue that the pact would undermine standards and regulations on environmental protection, health and safety, as well as workers’ rights, among other points, although Commissioner Malmström promised once again that “nothing in TTIP will undermine the way EU regulation protects our citizens”.

Many are also convinced and worried that TTIP will ultimately increase multinational company’s power through the so-called ISDS clause, the mechanism that would allow corporations to sue governments in tribunals if they believe to have been obstructed by local laws.

ISDS not covered in Miami

The Miami talks will not cover ISDS though, as the EU is currently developing its alternative proposal. The eleventh round of TTIP negotiations will mainly focus on government procurement standards that favor local businesses. The topic is quite thorny, as the US states are especially resistant to pressure on openning their contracts to foreign competitors. “State-level procurement in the US is very important for us”, an EU Commission official reportedly said. TTIP negotiators aim to exchange offers for government procurement by February next year though.

Whatever will come out of Miami talks, the feelings around TTIP have once again reached a record low. Business communities on both sides of the Atlantic are showing impatience, as the US Presidential elections as well as the referendum on whether the UK should remain in the EU premises are looming.