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April 25 — U.S. and European negotiators continued work April 25 on the text to a major trade and investment agreement whose completion is increasingly influenced by U.S. and European elections in the closing months of the Obama administration.
Negotiators started the 13th round of talks in New York on the Transatlantic Trade and Investment Partnership (TTIP), which is expected to address various issues, including agriculture markets, government procurement practices, regulatory cooperation and energy exports.
Negotiations are scheduled to continue until April 29, and trade specialists told Bloomberg BNA the clock is running out on finalizing the agreement's text because of national politics on both sides of the Atlantic. Gaining the assent of the U.S. Congress and European Parliament to ratify any resulting agreement presents its own set of challenges.
The negotiations started as political pressure to conclude a deal increased, in part because of the uncertainty of how the next U.S. administration might approach the agreement. Speaking in Hanover, Germany, April 24, President Barack Obama said not concluding negotiations on the agreement's text by the end of 2016 “could mean this agreement won’t be finished for quite some time.”
“We can't let this window of opportunity close,” the president said, adding that this is the time to complete TTIP.
Complicating matters further are general elections in France scheduled for the spring of 2017 and in Germany the following autumn. “So if the negotiators miss, say, completing negotiations around this summer, then the risk is that you have to wait until 2018, because it would be very difficult to close a deal both in France and in Germany,” Andrea Montanino, Atlantic Council global business and economics program director, told Bloomberg BNA. “I would say more July than August” 2016 is when negotiations must be completed, he said.
Both sides continue to disagree over several agriculture issues. Europeans continue to oppose U.S. foods containing genetically modified organisms in European markets, despite the willingness of some U.S. companies to disclose the presence of GMOs on product packaging.
Europeans are also firmly opposed to diluting protections for geographical indications, insisting that, for instance, any meat product labeled Parma ham or sparkling wine labeled Champagne be sourced from specific geographical origins in Italy and France. “I can't see the Europeans giving in on that,” Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, told Bloomberg BNA.
Montanino, a former International Monetary Fund executive director, said that of all the issues involving TTIP, those involving agriculture and food are the ones most discussed by typical Europeans. Many EU citizens prefer locally produced foods and dislike the notion of big U.S. agricultural concerns displacing local farmers, he said.
U.S. negotiators also are trying to open U.S. beef, chicken and field crops to European markets, which can be cheaper than similar foods and feeds produced in Europe. France and Germany, however, are just two influential European countries resisting greater market access for U.S. food products.
In advance of the New York round, 26 senators wrote in an April 22 letter that any TTIP agreement lacking strong agricultural provisions “could have a negative impact on Congressional support for this deal.”
The EU uses existing free trade agreements with other countries “to impose barriers on U.S. exports under the pretense of protecting [geographical indications],” and eliminating tariffs on all products remains a negotiating priority, the senators, including Senate Majority Leader Mitch McConnell (R-Ky.) and the leadership of the Senate Agriculture Committee, wrote.
Agriculture isn't the only area of disagreement. Negotiators continue to work on achieving regulatory cooperation to reduce the need for multiple product-safety tests in various jurisdictions, perhaps resulting in more streamlined product-approval regimes.
European negotiators continue to push for procurement language that would mean greater access to U.S. state contracts for European companies, an issue that has proven to be a sensitive one for U.S. negotiators.
Other regulatory concerns involve environmental and consumer protections. An April 25 letter to European Trade Commissioner Cecilia Malmstroem from European environmental and health organizations said the agreement could dilute EU environmental standards in an effort to converge with purportedly less stringent U.S. rules.
Another unresolved issue is the inclusion of an investor-state dispute settlement (ISDS) regime, which would allow companies to seek arbitration against a foreign government and is favored by U.S. negotiators. The European Commission in January proposed to replace ISDS with an investment court and an appeal mechanism (10 ITD, 1/15/16).
Meanwhile, U.S. negotiators continue to resist European negotiators' push for a separate chapter on energy that would promote access to energy sources and raw materials.
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The senators' letter is available at http://www.agriculture.senate.gov/imo/media/doc/TTIP_Letter_Froman.pdf.
The letter to Malmstroem is available at https://tradinghealthforprofit.files.wordpress.com/2016/03/call-to-exclude-the-e28098good-regulatory-practices_-chapter-from-ttip.pdf.
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