TTIP Leak Illustrates Depth Of “Enhanced Regulatory Cooperation” As NGOs Sound Off

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In time for the start of the third round of trade negotiations between the United States and European Union, EU transparency organisation Corporate Europe Observatory (CEO) published the first interesting leak on the substance of the talks.

[Update: the European Commission has responded with a critical statement, available here.]

The EU position paper [pdf] on the Transatlantic Trade and Investment Partnership (TTIP) “Chapter on Regulatory Coherence” illustrates how negotiators envision harmonisation of the legislative environment on both sides of the Atlantic.

All of the 20 or so work groups preparing text for the TTIP are meeting in Washington, DC from today until the end of the week.

An open meeting with stakeholders will take place on Wednesday in an effort to at least give the impression of being transparent. As EU Trade Commissioner Karel de Gucht and the US Trade Representative Michal Froman are going to engage early next year in a stock-taking exercise, negotiators are expected to try to make as much progress as possible. Meanwhile, support for a fast track procedure from Congress limiting itself to a yes-no vote on any trade agreement at this time is still not sure.

NGOs, meanwhile, warn against what they see as an erosion of democratic legislative procedures in the member states and at the US state level.

Meanwhile, a long list of NGOs in Europe and the US wrote [pdf] to the Office of the US Trade Representative (USTR) and the European Commission DG Trade warning against the controversial investor-state dispute settlement mechanism as yet another step around democratic institutions, they say.

And close to a quarter of a million people have signed a petition by German NGOs including Campact, Mehr Democratie/Democracy International and Arbeitsgemeinschaft Bäuerliche Landwirtschaft to stop the TTIP.

Enhanced Regulatory Cooperation

The leaked position paper on regulatory cooperation allows a first insight into how negotiators hope to avoid non-tariff and technical barriers to trade in the future. The paper points out that the “sovereign right (of both parties) to adopt new regulatory initiatives, to regulate in pursuit of legitimate public policy objectives” would be affirmed. Yet “regulatory cooperation” and a “light governance structure for that” shall be established nevertheless.

Major tools for that, according to the position of the EU, are “periodic information on upcoming initiatives in the pipeline” (federal and state, EU and member states legislation) and “regulatory dialogues” (between Commission and US administration, but also facilitated by them). Furthermore, the inclusion of transatlantic trade aspects in the “impact assessment/cost analysis” and “information on existing legislation and enquiry and contact points” are on the to-do-list.

“In concrete terms, where appropriate, regulators/competent authorities should cooperate to enhance regulatory compatibility, with a view to exploring trade facilitative solutions, e.g., by way of recognition of equivalence, mutual recognition or reliance and exchange of data and information, or other means,” the position paper reads.

Regulatory authorities also should give “due consideration to substantiated proposals from the other side or joint requests from EU and US stakeholders on how to achieve these goals and be required to communicate to the other Party and the stakeholders in any appropriate form the outcome of this assessment and its rationale.”

A “Regulatory Cooperation Council” manned by “senior level representatives from regulators and trade representatives the EU Commission’s Secretariat General (SG) and the US Office for Information and Regulatory Affairs (OIRA) “shall meet twice a year, organize the work and “prepare a yearly regulatory programme.”

Not the “FTA of Our Fathers”

“It’s as if trade will take over all other regulatory sections,” warned a spokesperson from Campact.

Corporate Europe Observatory in its extensive analysis of the leaked document of the regulatory cooperation proposal warns that the European Commission was planning to “fundamentally change the way regulations will be adopted in the future.”

The organisation is concerned that big business will gain new powers “to call a halt to proposed legislation which conflicts with their interests, or to re-negotiate existing regulation.” The position paper shows, according to CEO, that industry was writing the rules as “the Commission’s position is remarkably similar to a proposal put forward by BusinessEurope and the US Chamber of Commerce.”

“TTIP is much more than our father’s traditional FTA,” Joseph Francois, designated managing director of the World Trade Institute in Bern, acknowledged at an academic conference [pdf] of Heidelberg Center of American Studies/University of Heidelberg and the University of Mannheim last week. The agreement is trying to establish a pool of common standards, he said.

Francois and other international trade experts point first to the economic benefits, and some say there only would be winners. Others, meanwhile, calculate that trade will be re-routed and, for example, trade within the European internal market would decrease.

In its ambition and new nature, the TTIP goes far beyond the Trans-Pacific Partnership agreement, Francois also noted. TPP, he said, “is just tariffs and IP – TRIPS-plus stuff.” TRIPS-plus refers to measures beyond the 1994 World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights.

Francois pointed to governments as trusted agents for the public in these negotiations.

But according to the NGOs, secrecy on the TTIP texts is very rigorous with neither governments nor members of the European Parliament able to see negotiating texts at this time. Also, it is still unclear if the agreement will be a “mixed agreement” (with both EU and member states individually in charge), and it’s still unclear the negotiation results will ever go to national parliaments – as with the defeated Anti-Counterfeiting Trade Agreement (ACTA) – for ratification.

More Transparency Called For

The continued lack of transparency is one of the joint positions of the growing alliance of EU and US NGOs, according to Alessa Hartmann, coordinator at the German NGO Forum on Environment & Development, after a meeting of 50 NGO representatives last week. The transparency initiatives by the negotiators including stakeholder meetings and the planned advisory council have been rejected by the activists as “fake transparency”.

More transparency is not only be called for by the activists but was also acknowledged by experts at the academic conference in Heidelberg last week. The general manager of the American Chamber of Commerce in Frankfurt, Andreas Povel, during a panel discussion at the Heidelberg conference the stakeholder meetings currently held in connection with the negotiations rounds were steps in the right direction, “but we need more transparency to come.”

Celeste Drake, trade and globalisation expert at the AFL-CIO, the association of US trade unions, told Intellectual Property Watch that her organisation is concerned about the secrecy. In the US, draft legislation is published, markups in the committees are public and access is granted, she said.

Drake in Heidelberg was one of the critical voices with regard to the regulatory coherence. For example, she said mutual recognition of standards also means that lipstick containing lead could come to European supermarkets. The nitty-gritty details of the deal have to be checked very attentively, she warned, to avoid a “race to the bottom”.

Simplification, minimisation and avoidance of regulation are on the road map of the chemical industry, Kurt Bock, CEO of BASF, said during the Heidelberg panel discussion.

The EU and US chemical industry have started to prepare a joint position they want to present to negotiators. It is good, he said, when industry comes forward with what they have in mind.

The NGOs also are preparing a joint position for early next year. Will those inputs be treated the same?

Monika Ermert may be reached at info@ip-watch.ch.

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