The European Parliament discusses the Translatlantic Trade Agreement and Investment Partnership

picture from www.euintheus.org

by Marco Quaglia

On 5 November 2014, it was held for the first time under the Juncker's Presidency European Parliament (EP) Committee on Industry, Research and Energy (ITRE). Among many topics, the Transatlantic Trade and Investment Partnership (TTIP) was discussed. Under this acronym it lies the free trade agreement that will change dramatically the economic relations between the European Union (EU) and the United States (US).

What is the aim of the TTIP?

According to the European Commission, which is in charge of this issue, the TTIP represents the opportunity ‘to create growth and jobs on both side of the Atlantic by removing trade barriers’. The three main elements upon which this goal is built are: 1) removing barriers to ease market access; 2) improving regulatory coherence and cooperation between the EU and the US; and 3) setting common international standards.

It is believed that if the US would reduce even by a small margin custom duties at its border, the impact of this measure could have enormous leverage. On a different note to eradicate bureaucratic hurdles alone can correspond to a reduction of custom duties of some 10 to 20%. And finally, setting of common international standard would make all parties on the market to play by the same rules. The paramount example is the one for the car industry. Regulatory alignment in the sector of car crash could easily cut the cost imposed on EU cars in the US market as much as 25% without lowering safety standards. In terms of overall effect, the total impact of the TTIP is estimated around € 119 billion per year.

Export from the EU could increase by 28% - equivalent to € 187 billion; new job opportunities could be created for both high and low skilled workers, while labour displacement - that is the necessity for a person to move from a job to another - may be well within normal trends. Furthermore, the agreement would have negligible effects on CO2 emissions.

If all of this is true, why are there so many difficulties and criticism in this negotiation? As for the difficulties, due to the importance of the stake, no agreement will be signed if both the EU and the US will not gain the most out of it. In addition, recent political turmoils in both parties - a new legislature in the Union, and the mid-terms election in the US - ended up in actually change the negotiators. In fact, the US are expected to present a whole new team in the next round.

During the session of the ITRE Committee, members of the European Parliament (MEPs) did not miss the opportunity to raise their voices and show all their scepticism. The majority of all interventions are resumable in 3 main issues:

• Small and Medium Enterprises: how will the TTIP influence the already difficult life of many SMEs? Can they really match big companies on a global market, or will they lose even more ground in favour of multinationals?
• Common market: the EU has not a common market in many fields. In the energy one, for example, each member states is promoting its own different strategy - renewable, green, nuclear, fracking. Therefore, how will the TTIP, signed on behalf of the whole Union, affecting this field, and each member states’ autonomy?
• Transparency: many MEPs complained about the lack of information at their disposal, and more in general, about the impermeability of the European Commission on the real stage of the negotiate and its real terms. Which are concretely the fields touched by the agreement? What about the protection of sensible data? What is the agreement on the Investor-State dispute settlement (ISDS)?

Answers on these questions were all provided by the Commissioners present at the Committee in order to provide some clarifications. 2015 will be a crucial year for the TTIP negotiations; Jean Claude Juncker, the current president of the European Commission, has even refereed the TTIP on his programme of ten priorities. Both, Juncker and Barack Obama, President of the United States, need a successfully agreement on this matter. Juncker, to show a new direction given to the European Union, and to forget the recent scandal; and Obama, to finish its Presidency in 2016 with an international success.

Only history will tell if the TTIP will be agreed, and if it will be indeed, successful. For now, what is clear is that heretofore there is still a lot of work to do at the European level. A promising start would be to increase the level of transparency, and as a consequence of public attention on this negotiation.