Background

It is easy to be pessimistic about the EU and U.S. negotiations of the transatlantic trade and investment partnership. Previous initiatives to improve the regulatory cooperation between the EU and the U.S. went nowhere, and recent U.S. spying allegations did not help to put the negotiations up for a good start.

It was in the 1960s that the United States proposed—unsuccessfully—creating a North Atlantic Free Trade Area. In the 1990s, Germany and Great Britain proposed a second initiative for the creation of a Transatlantic Free Trade Area, which would have centered around political issues rather than economic.  Fear that the end of the Cold War would inevitably lead to American disengagement from Europe and the collapse of NATO drove both states to push for a free trade area. Although this initiative failed, it still paved the way for the New Transatlantic Agenda, which Chancellor Angela Merkel and President George W. Bush’s New Transatlantic Economic Partnership replaced in 2007. As with previous approaches, the Partnership’s economic and political success was fairly modest at best.

More than a year after the first working groups discussed the idea of a Transatlantic Trade and Investment Partnership (TTIP), President Barack Obama announced in early 2013 that TTIP negotiations would soon begin. On the European side, Merkel has continuously promoted the benefits of this partnership, especially with regard to the positive economic effects for the German as well as European economy.

With the European delegation in Washington for the first round of negotiations, pressure is high to achieve a durable and mutually beneficial agreement, despite early set-backs. The U.S. National Security Agency (NSA) surveillance leaks, showing NSA surveillance of Europeans and especially Germans allies, posed a threat to negotiations before they began. In France, where politicians have often been critical of the transatlantic partnership, requests to postpone the negotiations until resolution of the NSA surveillance controversy are common. Despite French opposition, European Trade Commissioner Karel De Guch, other EU officials, and the U.S chief negotiators adhered to the agreed first round in Washington. Knowing that TTIP possibly represents a last opportunity for the United States and the European Union to set a regulatory framework that will boost economic growth and employment on both sides of the Atlantic, there was little alternative to moving forward.

First Round: Washington, DC

As the first round of negotiations focused on organizational issues and a separate delegation with representatives of the Federal Ministries of the Interior and Defense (including Minister of the Interior Hans-Peter Friedrich) met with U.S. representatives to discuss espionage, the spying controversy did not have a direct impact on the success of the first round. This affair is not, however, the only political pressure on negotiations. Both Europeans and Americans have an interest in reaching a deal before the end of 2014, the end of the European Commission’s current term. Remaining obstacles include consumer safety, environmental protection, and privacy; starting the negotiations on time was necessary to maintain the goal of 2014.

The negotiations last week included fifteen working groups, and proceeded as detailed below.

Monday, 8 July: After an opening plenary session on Monday morning, the scheduled working groups discussed investment, government procurement, cross-border services, textiles, rules of origin, energy andraw materials, and legal issues. These first meetings continued on Tuesday and covered sanitary and phytosanitary (SPS) measures, market access and industrial goods, government procurement, cross-border services, investment, and energy and raw materials.  The day concluded with a joint session of negotiators on labor and environment.

Wednesday, 10 July: U.S. Chief Negotiator Dan Mullaney and EU Chief Negotiator Ignacio Garcia-Bercero called a stakeholder briefing session to provide updates on the first round of negotiations and to answer questions from present stakeholders. One important event preceding this session brought together U.S. and EU negotiators with representatives from academia, labor unions, the private sector, and non-governmental organizations, thereby creating a platform for discussing priorities for and progress of the trade agreement.

Thursday, 11 July: Meetings between the negotiating groups on SPS measures, competition, labor, customs/trade facilitation, and state-owned enterprises concluded the first week of negotiations. In a final press briefing on Friday, Mullaney and Garcia-Bercero summarized their views on this first round and answered questions from the press.

Aware of the importance of getting the negotiations off to a good start, both chief negotiators tried to relay confidence and optimism. They achieved their short-term goals: the negotiations started without disruption and will continue in Brussels this October. In the first round of TTIP negotiations, expectations did not extend beyond demonstrating unified commitment with regard to this sweeping prospective partnership, but all parties know that the days of harmonic and peaceful working group meetings are coming to an end as this first round concluded. In this context, U.S. Trade Representative Michael Froman’s emphasis on creativity, flexibility, and unconventionality comes over as well meant, but will probably be soon forgotten. Negotiating the Transatlantic Trade and Investment Partnership is still and will continue to be a boring of hard boards.

By Monica Schmidt

  • Rob Houck

    Do the Europeans understand that China will become ever more important to the US by buying US companies, thereby becoming employers of more and more Americans and gaining influence in the Senate? It’s now or never for this deal. And is anyone working on the labor wing of the Democrats and the Tea Party, to give any deal a snowball’s chance? Please keep reporting!