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The EU-US Transatlantic Trade and Investment Partnership

The European Union and the United States are currently negotiating a crucial trade agreement that will help create hundreds of thousands of jobs and pump billions of euros into economies on both sides of the Atlantic.

The Transatlantic Trade and Investment Partnership (TTIP) will be the world’s biggest bilateral trade and investment deal, and a successful pact is expected to benefit Ireland more than any other EU Member State.

That’s because almost half (49%) of Irish exports outside of the EU end up in the US, compared to the combined average of 16% for all Member States, and 25% of foreign direct investment (FDI) in Ireland comes from the US.

Graph showing Ireland's Trade with the US

TTIP talks began in 2013 when EU governments gave the European Commission a mandate to negotiate TTIP after the Irish presidency of the EU Council got both sides to agree a starting point for this important trade partnership.

As negotiations have progressed, they’ve become subject to increased public scrutiny, and a certain amount of concern. The Commission has responded by making the talks as transparent and inclusive as possible, while still maintaining the confidentially needed to conclude a constructive agreement.

The Commission publishes factsheets in plain language covering the negotiating texts, EU textual proposals and EU position papers, which are available on the Commission’s website.

Citizens, businesses and any concerned parties can have their say on the TTIP at ongoing public consultations and meetings or by contacting the negotiating team directly.

What exactly is the TTIP?

The United States is, by far, the most common destination for goods exported from Europe and trade between the US and the 28 EU Member States is currently estimated at around €2 billion every day.

Graph showing EU Trade with the US

The TTIP would create further growth and new opportunities by eliminating red tape and tariffs wherever possible to reduce costs and open up new markets.

This would make it easier for companies on both sides of the Atlantic to access each other's markets. For example, US rules currently ban some European food products and certain cheeses, even though the EU has its own strict regulations on all foods.

Many products are also more expensive because they have to undergo time consuming double testing to satisfy rules for both the European and American markets.

These rules usually ensure the exact same levels of safety and quality, differing only in technical details, but they often make it costly and difficult to bring all types of goods to the market, especially for smaller companies.

Cutting bureaucracy and costs - without cutting corners – would make it easier and fairer for EU and US businesses to export, import and invest resulting in safer, cheaper goods and services for consumers.

The TTIP’s main objective is to achieve this through a comprehensive partnership that agrees on 24 chapters covering market access, regulatory cooperation and rules.

How will Ireland benefit?

Ireland has a greater dependence on the US export market than any other EU Member State. In 2013, we exported €18 billion worth of goods to the US, equivalent to 21% of our total exports of goods.

However, Irish exporters pay in excess of $300 million per year in tariffs to the US Treasury and are excluded from some markets.

And tariffs aren’t the only problem. Non-tariff barriers such as customs procedures and regulatory restrictions can be even more costly.

One man who knows better than most what Ireland stands to gain from the TTIP is EU ambassador to Washington, Dubliner David O'Sullivan.

He says the TTIP will not only deepen the bonds of commerce and friendship across the Atlantic, it will also be a big boost for Ireland as an export nation.

“TTIP will be a powerful shot in the arm for Ireland as it rebuilds its economy on a more diversified, sustainable basis,” the Trinity College graduate said.

“As TTIP aims to eliminate tariffs and behind-the-border barriers, Irish exports and jobs supported by them can only increase.

“US firms are playing a major role in Ireland’s economic recovery. They have invested around €189 billion here since 1990, more than the combined total of US investments to Brazil, Russia, India and China.

“With only 1% of the EU population, Ireland accounts for more than 14% of all US investment to the EU, investment that supports 100,000 jobs.

“TTIP will make it easier for US companies to invest in Ireland and vice versa and this can only be a good thing for our school-leavers and graduates.”

Ambassador O'Sullivan pointed out that TTIP is also a strategic alliance with the country that most shares Europe's commitment to democracy, human rights and the rule of law, as well as a high level of protection of people and of the environment in regulation.

“We cannot put the genie of globalization back in the bottle, and we must accept that, as our weight in the world declines in relative terms, we need the EU and like-minded allies to have a hope of shaping the globalisation intensifying before our eyes,” he added.

“TTIP guarantees that kind of partnership with the United States for the future.”

In 2015 the Irish Department of Jobs, Enterprise and Innovation commissioned a detailed report to find out what economic opportunities and impacts a TTIP agreement would have on Ireland.

The study by consultancy experts, Copenhagen Economics, found that if implemented in the current economy, TTIP would increase Ireland’s GDP by 1.1% or €2 billion.

Real national income - a measure of actual purchasing power – would be up by €2.4 billion and investment in Ireland would increase to a level 1.5% above what it would be without an agreement.

The report also found that TTIP would increase exports from Ireland to the world by around 4% and improve Ireland’s trade balance by €2.4 billion.

According to the study a successful TTIP would also bring between 5,000 to 10,000 new export-related jobs to Ireland and improve wages for all skill groups by an average of 1.5%.

The report predicts new opportunities for many Irish industry sectors including pharmaceuticals and chemicals, Agri-food (notably dairy and processed food), insurance and machinery.

It also warns that Ireland’s beef producers may have to prepare for increased competition from cost efficient US beef producers in the European market.

What about SMEs?

There’s no doubt that big business in Ireland will benefit from the TTIP but our small and medium sized-enterprises (SMEs) stand to be the biggest winners.

Smaller companies are more affected by non-tariff barriers on exported goods (NTBs) than larger exporting firms, which often have entire departments dedicated to complying with the various rules and testing procedures on US imports that can even differ from state to state.

Graph showing average tariffs on EU-US trade

The TTIP will have an entire chapter exclusively dedicated to SMEs in the final agreement to make it easier for smaller businesses to export to the US.

European Commission statistics show that 28% of the EU's direct exports to the US are by SMEs, despite current tariffs and NTBs.

The value of exports sold by Irish SMEs to the US in 2012 was €7.3 billion and with SMEs accounting for 85% of European job growth during 2002-2010 the potential for job growth through the TTIP is significant.

In fact, the Copenhagen Economics TTIP Impact in Ireland study reported that a trans-Atlantic agreement would have a more significant positive impact on SMEs than on other types of business.

Enterprise Ireland already supports over 3,000 exporting Irish SMEs and can assist Irish companies looking to take advantage of new opportunities for extra export sales through its network of four offices in the USA.

The European Commission has published an in-depth survey of SME attitudes to TTIP , which highlights current difficulties experienced by SMEs exporting to the US and shows how they can benefit from an agreement.

What are the main concerns?

As the TTIP talks have progressed politicians, businesses, workers and consumers have raised a number of concerns. This has helped increase public awareness of the TTIP and European Commission negotiators are addressing these concerns in talks with their US counterparts.

One of the main contentious issues is a provision for investor-state dispute settlements (ISDS), which ensure investors are treated fairly when they invest abroad.

Around 1,400 ISDSs already exist in EU countries but occasionally they can be a source of controversy and the European Commission wants to make them more transparent.

To help do this, the Commission has approved a proposal for a new, transparent system for resolving disputes between investors and states called the Investment Court System.

The new system would replace the ISDS mechanism and the proposal stems from substantial input received from the European Parliament, Member States, national parliaments and stakeholders through public consultation.

Built around the same key elements as domestic and international courts, the Investment Court System enshrines governments' right to regulate and ensures transparency and accountability.

Under the proposal, a first instance Tribunal and an Appeal Tribunal would be established.

The ability of investors to take a case before the Tribunal would be precisely defined and limited to cases such as targeted discrimination on the base of gender, race or religion, or nationality, expropriation without compensation, or denial of justice.

In parallel to the TTIP negotiations, the Commission will also work, together with other countries, towards setting up a permanent International Investment Court.

Quote from Trade Commissioner Cecilia Malmstrom on ISDS

On 5 May, the European Commission published a concept paper concerning ISDS - "Investment in TTIP and beyond – the path for reform". This sets out ideas for copper fastening a Government's right to regulate and to move from current ad hoc arbitration towards an Investment Court.

The impact of the TTIP on food safety has also been raised as a concern and this is an important issue for Ireland as we export 80% of everything we produce, meaning tens of thousands of Irish jobs depend on good foreign trade relationships and agreements like the TTIP.

The European Commission says there’ll be no weakening of the EU’s high food safety standards and Member States won’t be forced to import Genetically Modified (GM) foods that EU regulators haven’t already improved.

There’ll also be no obligation to import hormone treated beef or meat from cloned animals but both EU and US regulators will work together to make it easier to export and import foods while fully respecting EU rules on food safety.

Irish farmers are concerned about a potential contraction of Irish beef output but EU Agriculture Commissioner, Phil Hogan, has confirmed the Commission is exploring and pursuing a TTIP outcome that delivers adequate protection for our beef producers, while at the same time provides reasonable market access to US exporters.

The Commission has published a myth-busting document that addresses other concerns about the TTIP. There’s also a comprehensive questions and answers section that covers concerns and provides basic information about the TTIP on the European Commission’s website. 

How transparent is TTIP?

Most negotiations involving compromise require a level of confidentially in order to reach a fair conclusion for both sides. However, the TTIP will affect almost all EU citizens so negotiators also need to know what all the stakeholders want, and don’t want, from an agreement.

The European Commission is actively seeking input from all EU citizens interested or concerned about the TTIP and anybody can contact the negotiating team to express views or learn more about the process.

Events take place during and after each round of talks with several hundred representatives of civil society attending, including members of trade unions, business groups representing both large multi-nationals and SMEs, non-governmental organisations (NGOs) and consumer protection organisations.

An Advisory Group made up of 14 representatives from very diverse sectors – economics, trade unions, consumers, environment, health etc - has also been put in place.

These representatives advise the EU's chief negotiator while the talks continue and have access to a broad range of documents.

The Commission has also posted comprehensive material on all aspects of the negotiations on its website, including EU negotiating positions and objectives, as well as the official mandate for talks.

How democratic is the TTIP?

The TTIP is being fully scrutinised through several democratic processes as talks progress.

As well as meetings with stakeholders, which help the negotiators form positions on the various aspects of the TTIP, the European Parliament is consulted and informed every step of the way.

Similarly, the Commission has a legal obligation to regularly consult the EU Council on all aspects of the TTIP negotiations, to ensure the common interests of all 28 Member States are represented.

Democratic control of the TTIP negotiations is particularly strong at the end of the process when the text negotiated by the Commission has to be approved by the EU's Member States through the Council and ratified by the European Parliament.

Depending on the policy areas covered in the final agreement the 28 individual national parliaments of the EU's Member States might also have to approve the deal.

So regardless of the outcome of the talks, the TTIP can only come into force with the backing of all the EU’s democratically elected national governments, and the democratically elected European Parliament.

Quote from Commissioner Malmstrom and Michael Froman, US Trade Representative

Further information

Questions and answers on the TTIP

Last update: 01/10/2015  |Top