Damien Levie Deputy Chief Negotiator DG TRADE

Damien LevieDeputy Chief NegotiatorDG TRADE

Istanbul12 September 2013

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The EU-US Transatlantic Trade and Investment Partnership

(TTIP)

Disclaimer

All views expressed are purely personal and should not be considered as representative of the European Commission’s official position. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information.

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EU/US Trade: EU is the world's biggest trading power

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Countries who have the EU, the US, China or Japan as their most important trade partner EU as first trade partner US as first trade partner China as first trade partner Japan as first trade partner

Top trading partners• World's largest trade market

• 50% of world GDP and 1/3 of world trade• €1.8 billion/day and €723 billion/year of goods and

services traded

• 15 million transatlantic jobs• €2,4 trillion of mutual investment stocks

However, relative importance is in decline5

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EU imports from USA (2011)

EU exports to USA (2011)

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TTIP timeNot new: "old movie" of the 90ies Trade = growth at minimal cost to taxpayer

• Irresistible given macroeconomic situation

Potential not fully exploited• Tariff average: 3% EU: 5.2% US: 3.5%• Trade-weighted tariff protection: EU: 2.8% US: 2.1% • Barriers at and behind borders : similar aims, different approaches

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TTIP time (2)

Ambitious bilateral trade and investment agendas• Canada, Japan, India and ASEAN• Trans-Pacific Partnership

DDA Impasse & need of new global trade rulesStars aligned

• European Council and European Parliament• 28 Member States• Business

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How we got there? Preparations (1)

November 2011 EU-US Presidential Summit

•High-Level Working Group on Growth and Jobs •Tasks: identify policies & measures to increase trade and investment to support job creation, growth & international competitiveness•Timing: June & end of the year 2012 (US elections)

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• In-depth work • Scoping exercise • USTR & European Commission• Relationship between equals • Building on previous work, TEC, & > 60 sector-specific

regulatory dialogues

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Interim report June 2012• Preferred option: a comprehensive agreement• Goal is highly ambitious liberalisation in all areas: goods,

services, public procurement, investment, regulatory issues and non-tariff barriers.

• Rules for the 21st century: trade facilitation & customs, competition and State-owned enterprises, labour & environment, SMEs, supply chains, access to raw materials & energy.

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Preparations (4)

Interim report June 2012

"If achievable"

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Preparatory Work (5)

Stakeholders' roleinvited by the HLWG (interim report) to present concrete proposals to address the impact of regulatory differences that unnecessarily impede tradeJoint EU-US callJuly 2012 call by USTR/DoC + TRADE / DG Enterprise & IndustryGood resultsLegislators in the loop

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Final report February 2013Recommends start procedures to launch negotiations of a comprehensive trade & investment agreement: "TTIP"Key findings:•Need break new ground to reap benefits & establish new trade rules that are globally relevant•Need innovative approaches, both to be creative, flexible & open-minded•Agreement in three parts 15


Final report February 20131.market access2.Regulatory issues & NTBs3.Rules addressing shared global trade challenges and opportunities

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Market Access• Goods: "would be to eliminate all duties on bilateral trade …

substantial elimination of tariffs upon entry into force, phasing out of all but the most sensitive in a short time frame … options for … most sensitive products"

• Services: bind existing opening, and "achieve new market access … long-standing market access barriers while recognising … sensitive … sectors. Commitments on transparency, impartiality & due process for licensing & qualification requirements & procedures

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Market Access ctd

• Investment: liberalization and protection provisions based on highest standards

• Public procurement: "enhance business opportunities through substantially improved market access to gov procurement .. At all levels of government on the basis of national treatment

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Regulatory issues & NTBs• Important: "significant portion of the benefits" [equivalent to a

traditional tariff of 10-20%]• Balanced ambition: move progressively to a more integrated

market place while respecting each side's "right to regulate in a manner that ensures the level of protection of health, safety, and the environment that each side deems appropriate"

• Shared objective: identify new ways to prevent NTBs from limiting the capacity of U.S. and EU firms to innovate & compete in global markets

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Regulatory issues & NTBs ctd• Need new processes & mechanism: promote greater

compatibility, including where appropriate, harmonization of future regulations, & reduce burdens from existing regulations through, where appropriate, mutual recognition or other means

• 5 elements

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Regulatory issues & NTBs ctd1. ambitious SPS chapter 2. ambitious TBT chapter 3. Horizontal disciplines on regulatory coherence in goods and services…

upstream regulatory consultation, impact assessments, good regulatory practices

4. Sectorial annexes: Commitments / steps => regulatory coherence5. Framework … guiding regulatory cooperation … institutional basis for future

progress – "engine of the living agreement"

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Rules addressing shared global trade challenges and opportunities

1. IPR2. Environment & labour3. Other rules, principles, modes of cooperation in:4. trade facilitation & customs, competition policy, State-owned

enterprises and other enterprises with special gov' granted rights,localization barriers to trade, access to raw materials & energy, SMEs, transparency

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Final report HLWG• Endorsed by Presidents Barroso, Van Rompuy

and Obama• Triggered internal procedures to launch

negotiations of a “Transatlantic Trade and Investment Partnership” (TTIP)

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Impact Assessment - Economic findings

• Significant economic gains both EU & US: • 0,5 % increase in EU GDP by 2027 • 68-119bio €/year (EU), 50-95bio €/year (US)

• 545€ extra disposable income for families• Increased trade

• EU exports to US up by 28% (187 bio €)• Total EU exports up 220 bio € (3rd countries included)

• Labour market: benefits (of overall wages and new job opportunities for high- and low-skilled workers)

• RoW: GDP increase +100 bio/ €24

Impact Assessment – Sectoral Benefits

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Agriculture forestry fisheries 0.06 0.00 15.10 21.80 1,743 1,102Other primary sectors 0.02 0.05 0.60 0.40 55 41Processed foods 0.57 -1.13 45.50 74.80 13,405 4,083Chemicals 0.37 -0.40 36.20 34.20 29,895 27,273Electrical machinery -7.28 -2.04 35.00 44.10 2,555 8,304Motor vehicles 1.54 -2.78 148.70 346.80 87,358 65,903Other transport equipment -0.08 0.83 25.50 27.80 9,037 10,318Other machinery 0.37 1.66 6.60 16.70 7,448 7,810Metals and metal products -1.50 0.45 68.20 88.10 12,516 18,778Wood and paper products 0.08 -0.02 19.90 42.50 3,209 2,918Other manufactures 0.79 0.26 22.80 16.70 11,132 6,170Water transport 0.99 0.42 6.80 7.10 23 42Air transport 0.44 0.39 1.60 2.20 333 374Finance 0.42 -0.11 8.50 4.90 3,517 1,240Insurance 0.83 -0.44 8.30 7.40 3,333 264Business services 0.25 0.07 2.30 5.40 1,545 1,931Communications 0.17 0.32 0.90 10.50 51 685Construction 0.53 0.39 3.10 6.60 71 155Personal services 0.26 0.38 2.30 13.80 228 964Other services 0.28 0.18 -1.00 1.50 -491 744

Output (in %) Bilateral exports (in %) Bilateral exports (in Million EUR)EU US EU exports to US US exports to EU EU exports to US US exports to EU

EU negotiation mandateNegotiating directives set out in very broad terms the topics and objectives to be achieved in the negotiations

Three main elements: •Market access: tariffs, RoO, Services, PP, Investment •Regulatory and NTBs: towards convergence? •Trade rules addressing shared global challenges

IPR, Trade and Sustainable Development + Other Globally Relevant Challenges and Opportunities

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Timing Parallel launch procedures

Adoption of negotiation mandate (14 June 2013) Letter of notification US Congress (90-day period)

Trade negotiations on one tank of gas1st round of negotiations (July 2013)2nd round 7-10 October3rd round December

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Milestones on the way

No low-hanging fruitComplex topics

• Agriculture, SPS, Regulatory convergence, NTBs, services, public procurement

Elements of timing • US presidential term• EP elections June 2014• College of Commissioners Oct. 2014

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Transparency in trade negotiations• Democratic scrutiny and public involvement are encouraged at

all stages of negotiations• During negotiations: public consultations, civil society dialogue,

SIA, Council and EP (INTA)• Stay informed

Commission's TTIP dedicated website http://ec.europa.eu/trade/policy/in-focus/ttip/

Follow us on Twitter @EU_TTIP_team• Public debate before the deal is approved

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Negotiations: Working arrangements• DG Trade will take the overall lead (and USTR)• Negotiating teams are led by a Chief Negotiator • Chief Negotiators set up negotiation rounds, normally alternating

between the EU and US• Depending on the agenda, up to 70 people on the Commission side• 1st round: 8-12 July in Washington • All areas of negotiation covered • DG Trade draws on expertise from across the Commission • Strong cooperation between DGs

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THE END

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Damien Levie Deputy Chief Negotiator DG TRADE

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