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About TTIP – basics, benefits, concerns

Basics - What, who, how

The Transatlantic Trade and Investment Partnership, or TTIP, is a trade and investment agreement, which the European Union (EU) is negotiating with the United States - our biggest export market. 

Customs duties, red tape and restrictions on investment on each side of the Atlantic can make it difficult to buy and sell goods and services on the other. Getting rid of these barriers to trade between the EU and the US would boost our economy, create jobs and widen choice and lower prices for consumers.

TTIP - the Transatlantic Trade and Investment Partnership - is being negotiated between the European Union (with its EU's 28 member countries) and the United States. In the case of the EU,the European Commission is at the negotiating table.

TTIP would remove tariffs, cut red tape and reduce restrictions on investment.  This would make it easier for EU firms - large and small - to export goods and services to the US.  It would also make it easier for them to invest on the other side of the Atlantic.  And, of course, the same would apply to US companies wanting to export to or invest in Europe.

That would be good for Europe's economy and would help create new jobs.  Already 30 million jobs in the EU depend on exports and US firms employ 3.5 million people in the EU.

TTIP would bring EU and US standards and regulations more in line with each other without lowering consumer, health or environmental standards.  Companies would no longer have to produce different goods for the EU and US markets, helping them lower their costs.  Consumers would benefit from lower prices and a wider choice of goods, confident that they meet the highest safety standards.

Benefits

TTIP would boost trade at a time of continuing economic crisis.  That means more business opportunities, more growth and more jobs.  Lower prices, a wider variety of products to choose from and confidence that products and services from across the Atlantic meet the highest safety standards would also contribute to the prosperity of the over 800 million EU and US citizens.

The EU is one of the world's most open economies.  Open trade:

  • strengthens our economy
  • creates jobs
  • gives us more choice and buying power as consumers
  • helps our firms compete abroad.

We are working hard to ensure Europeans benefit even more from open trade and globalisation.

As in any area of life, open trade may affect each of us differently.  We are working with EU governments, the European Parliament and civil society to identify any potential negative effects early on in the process.  This will help us manage them and take possible measures to off-set them.

TTIP would bring a welcome boost to trade at a time of continuing economic crisis.  It would help European firms sell more goods and services in the US.  European firms could also participate on an equal footing in US government tenders.  That is good for the economy and good for jobs.

Here in Europe, cheaper American imports would mean more choice in the shops at lower prices; cheaper goods and services would also bring savings for business.  Of course, any US goods sold in the EU would still have to comply with our high standards of environmental, consumer and health protection – just as they do now. An independent study carried out for the European Commission forecast that, when fully operational, TTIP could bring benefits to the EU economy worth an additional 0.5% of GDP.  Most other studies on TTIP also points to benefits for the EU economy.

EU exports to the US are mostly high-value products, like cheese, hams, wine, olive oil, spirits, and chocolate. High tariffs at US customs - up to 30% - make some of these hard for Americans to afford - and difficult for European farmers and firms to export.

The US also faces customs tariffs in the EU on basic products like maize, soya beans, and animal feed. This in turn raises costs for European farmers and food manufacturers. 

TTIP would lower these customs duties - or get rid of them altogether

US approval procedures and red tape can also make it very difficult for EU exporters. At the moment, many apples and pears sold in Europe are effectively banned in the US.

TTIP would not only boost trade and income in the EU and US but also in the rest of the world. An independent study found TTIP could increase our trading partners' output by almost €100 billion.

More growth in the EU and the US would increase demand for exports of raw materials, components and finished products from other countries.

Aligning EU and US standards and regulations would mean exporters in other countries would only have to comply with one set of rules instead of two.  This would make it easier for them to export and would help their economies.

Aligning EU and US standards and regulations could also provide the basis for high global standards, bringing benefits to consumers and business alike.

The negotiating process – basics, transparency, oversight

Basics - who, how, when

When it comes to trade talks, it is the European Commission that negotiates on behalf of the EU and its 28 member countries.  One voice representing 500m people is more effective than if each EU country tried to negotiate separately.

The EU Trade Commissioner represents the EU side.  Alongside the Commissioner are teams of negotiators and specialists from various Commission departments – for example agriculture, public health, and small and medium-size firms.  The Commission team negotiates using guidelines it gets from the governments of the EU's 28 member countries who meet together in the Council.  The Commission consults the Council and reports to the European Parliament throughout the negotiating process. 

The Commission also consults widely with representatives of civil society. These include:

  • non-governmental organisations
  • business organisations
  • health groups
  • environmental groups
  • animal welfare groups
  • faith-based groups
  • consumer groups
  • trade unions
  • trade associations

The United States Trade Representative (USTR) and his team negotiate for the US.

The European Commission negotiates on behalf of the EU and its 28 member countries.  It does so using guidelines it gets from the governments of the EU's 28 member countries.

Rounds of talks between the EU and the US take place every few weeks. The European Commission is in close contact with the governments of the EU's 28 member countries before and after each round.  It consults them on the EU's negotiating position and informs them of developments.  It also regularly reports to the European Parliament.  The European Commission consults widely with stakeholders too, including:

  • non-governmental organisations
  • business organisations
  • environmental groups
  • animal welfare groups
  • faith-based groups
  • consumer groups
  • trade unions
  • trade associations

Once EU and US negotiators have come up with an agreement, we will publish the text of the agreement on our website.  EU governments - together with the European Parliament - will examine the text and can approve or reject it.

Negotiations began in July 2013 with rounds of talks taking place every few weeks.  Both the EU and the US want to avoid years of negotiations, but the most important thing is to get a good result.

Transparency - sharing information about the talks

The mandate is the guidelines the governments of the EU's 28 member countries gave to the European Commission to negotiate TTIP.  

The governments of the EU's 28 member countries gave the European Commission a mandate to negotiate TTIP.  The mandate is a set of guidelines for the Commission. Only EU governments can decide whether to publish their guidelines.  
The European Commission repeatedly called for the mandate to be made public.  In October 2014, EU governments agreed to publish the mandate, a move the Commission hailed as a welcome boost for transparency

The European Commission negotiates on behalf of the EU.  We use our weekly contacts with the governments of the EU's member countries and regular meetings with the European Parliament to consult and report to them, including on the EU’s negotiating positions and specific proposals for text in the agreement. 

At the end of the negotiations, it is the governments of the EU's member countries and the European Parliament that will approve or reject the agreement.

Throughout the process, we have been doing more to spread information about TTIP and involve everyone with a stake than any other trade talks in the EU's 60-year history.

Our initiatives have included:

  • creating a dedicated TTIP website and TTIP Twitter account
  • publishing EU position papers setting out what we hope to achieve in the talks.
  • holding regular meetings with hundreds of people representing Europe-wide NGOs, consumer groups, trade unions and business organisations.
  • setting up a TTIP Advisory Group of experts to work directly with the Chief Negotiator.  The experts represent trade unions, consumers, the environment and business.
  • making more documents available to all members of the European Parliament.

More documents

Throughout the negotiating process officials from EU member countries can give their views on all the EU’s negotiating positions and specific proposals for text in the agreement.  We share these positions and proposals with the European Parliament too.

We also share the negotiating texts – which include proposals by both the EU and the US – with EU government officials and members of the European Parliament. In line with our ongoing efforts to further increase transparency, we have also published the EU's negotiating texts on our website.

With TTIP the Commission intends to follow the practice it adopted with the recently agreed trade agreement between the EU and Canada (CETA). The Commission published the text of the agreement before EU and Canadian government lawyers had checked it and before it had been translated into all 24 official EU languages.

Once the lawyers have checked the published text, the Commission will send it to the Council and the European Parliament for ratification.  The general public can already see exactly what has been negotiated.

Democracy - overseeing the talks

When it comes to trade talks, it is the European Commission that negotiates on behalf of the EU and its 28 member countries.  The Commission's team of TTIP negotiators uses guidelines it gets from the governments of the EU's member countries. 

Throughout the TTIP talks, the Commission team is keeping the governments of the EU's member countries and members of the European Parliament fully informed of developments.  Once EU and US negotiators have come up with an agreement, EU governments - together with the European Parliament - will examine the text and can approve or reject it. 

We listen to - and are available to meet - representatives of all stakeholders, including:

  • business associations
  • trade unions
  • non-governmental organisations
  • consumer groups
  • trade associations

We also hold regular meetings with all of these stakeholders together, as well as meetings only with civil society and non-profit organisations.

To help us with our work, we have set up a TTIP advisory group of 16 independent specialists representing:

  • business
  • service industries
  • agriculture
  • trade unions
  • consumers
  • health
  • the environment  

Clearly, trade barriers affect business - especially exporters - so we do need to know what problems they face if we are to negotiate an agreement that will help EU exports, stimulate economic growth and create jobs.  Over 30m jobs in the EU depend on exports.  But we also to take into account the concerns and potential impact of trade negotiations on all EU citizens, whether they are employers or employees, farmers, students, pensioners etc.

Once EU and US negotiators have come up with an agreement, EU governments - together with the European Parliament - will examine the text and can approve or reject it. 

All EU governments are democratically elected.  The members of the European Parliament are directly elected in EU-wide elections every five years.

EU laws states that trade agreements like TTIP can only be signed if they are agreed both by the governments of the EU's 28 member countries and by a majority in the European Parliament.  This means EU trade agreements are subject to a double democratic guarantee.

The substance of the negotiations

What is being negotiated in TTIP?

The negotiations cover three main areas:

We want to:

  • remove nearly all customs duties on manufactured goods and agricultural produce
  • make it easier for companies providing services to do so in both the EU and the US
  • create a level-playing field for companies on both sides of the Atlantic to bid for public tenders. This would create more choice for public authorities and better value for taxpayers'money.

Although EU and US regulations are often very similar they sometimes achieve their aims in different ways.

We want to:

  • help EU and US regulators work more closely when setting new regulations.
  • recognise each other's regulations where they provide equivalent protection

More about the regulatory part of TTIP

We want:

  • non-discriminatory and free access to natural resources
  • access to infrastructure
  • access to renewable energy
  • to protect workers and the environment
  • to give civil society a direct role in making sure both sides implement the agreement properly
  • to ensure small and medium-sized firms in particular benefit.

What are some of the concerns?

Standards on health, consumer rights and the environment

No.

TTIP will not overrule, repeal or amend EU legislation.  The EU's 28 member countries and the European Parliament would have to approve any changes to EU laws or regulations in order to liberalise trade.

EU laws set high standards that protect, among others:

  • human life and health
  • animal health and welfare
  • the environment
  • consumers

In the EU, independent regulators advise governments on how strict these standards should be, based on the latest scientific research. TTIP will safeguard these standards, and governments' right in the future to set them as high as they wish.

No.  Hormone-fed beef is banned in the EU.  That will not change under TTIP. 

Tough EU laws designed to protect human life and health, animal health and welfare, or the environment and consumers will not be changed because of TTIP.

No.  

The EU has a strict system for deciding whether to allow companies to sell any given GMO in the EU.  This is entirely separate from trade negotiations.

The EU basic law on GMOs - including the European Food Safety Authority’s (EFSA) safety assessment and the risk management procedure - is not up for negotiation.  It will not change as a result of TTIP.

Scientists at the EFSA assess all applications to sell GMO products in the EU.  EU governments then consider their findings before deciding whether to approve the application.  So far, they have authorised 58 GMOs.

Regulators in the EU and US already exchange information about GMOs - on policy, regulations and technical issues. TTIP could help them do so more effectively.  This would help limit the effect on trade of our different systems for approving GMOs

The EU is the world's biggest importer and exporter of agricultural and food products.  The food industry is the EU's largest manufacturing sector in terms of turnover.

US exports of agricultural commodities to the EU are vital as animal feed and ingredients in the food industry.
We are aware that competition from US products as a result of full liberalisation of EU-US trade could adversely affect some EU agricultural products.

In these cases, instead of full liberalisation we would negotiate import quotas, as we have in other EU free trade agreements.

Of course, US exports to the EU will still have to meet EU basic requirements, such as the EU's ban on beef from animals treated with growth hormones.

Public services

No.

Neither TTIP nor any other EU trade agreement require countries to liberalise, deregulate or privatise public services at national or local level.  This includes:

  • public health
  • state education
  • public transport
  • water collection, purification, distribution and management

In its trade agreements, the EU always underlines its commitment to protecting public utilities at all levels of government, including the local level.  Any decision to liberalise, deregulate or privatise such services is entirely up to national governments and local authorities.  Trade agreements will not change that; TTIP will not change that.

Nor will TTIP require EU governments or public health services to put anything out to private contract.  Some EU countries have chosen to allow firms from countries outside the EU to provide private education and health services; others have not.  This is entirely a choice of each national government.

If an EU government decides to renationalise a service that it or a previous government had privatised or contracted out to a private company, it is free to do so.  It would, of course have to respect its own national laws and EU law - for example, by paying compensation for expropriation.  But TTIP will not allow US companies to sue the government for lost profits.

Investors' rights

Investment is at the heart of the EU economy. It generates growth and jobs and is a key driver of trade.  Including investment in TTIP could mean:

  • providing new investment opportunities and making both the EU and US more attractive for investment
  • providing a level playing field for EU investments in the US – currently, firms from EU countries that have bilateral investment agreements with the US are better protected than those from EU countries that do not 
  • setting basic rules about investment protection. This is important for creating a business environment that encourages sustainable growth and jobs
  • reforming the current investment protection system to make it more balanced and transparent and to protect the right of governments to regulate in the public interest

No.

In TTIP the Commission wants to introduce a system of investment protection and a way for settling disputes between private companies and governments that is a real improvement on current practice.  At the United Nations, the EU has successfully pushed for the first system of global rules to make ISDS more transparent.  

The Commission wants to anchor these same improvements in TTIP

It wants to:

  • guarantee governments' right to regulate
  • make ISDS more transparent, for example by publishing proceedings
  • introduce measures to make sure arbitrators are impartial
  • oblige arbitrators to follow a code of conduct.
  • clarify and limit investors' rights
  • allow interested parties, such as non-governmental organisations, to make their views heard and for their opinions to be published as part of the proceedings
  • set up an appeals body to review ISDS tribunals' decisions.

Since the 1950s, EU member countries have signed some 1,400 bilateral trade and investment agreements, some with each other, the rest with countries outside the EU.  These agreements include measures to protect investments and to settle disputes between private companies and governments (ISDS). 

The Commission's proposals for TTIP are for a modern system for protecting investments and solving disputes that takes into account the public's concerns.

From 27 March-13 July 2014, the Commission organised an online public consultation to gather views on investment protection and ISDS in TTIP.  In January 2015, the Commission published a report on the consultation. In the coming months, the Commission will discuss the results of the consultation with EU governments, the European Parliament and EU stakeholders.

They won't.  This is a myth. 

Under the Lisbon Treaty, the European Commission negotiates investment agreements on behalf of the EU.  When instructing the Commission to enter into talks with the US on TTIP, the governments of the EU's countries told it to negotiate Investor to State Dispute Settlement (ISDS) as part of the deal.

The EU wants TTIP to offer protection for EU firms when they invest abroad.  ISDS is a way to do this.  ISDS has existed for decades and EU countries already have some 1,400 ISDS agreements in place, including as part of their investment treaties with countries outside the EU.

ISDS makes it possible for a foreign firm to apply for compensation if a government seizes its assets or passes a law which only applies to foreign firms and makes their investment worthless.  For example, a law banning a product made in a foreign-owned factory whilst not banning products made by domestic companies.

ISDS does not stop governments passing laws, but where new laws discriminate against foreign firms it allows them to bring a claim for compensation.

The European Commission believes the existing ISDS system needs to be improved.  That is why it has been very active in developing new United Nations' rules for ISDS to make ISDS more transparent.  The European Commission wants ISDS provisions in EU trade agreements to be the best possible, including with a code of conduct for, and government control of, arbitrators. 

No.  This is a myth.

If a US company wanted to challenge a law or measure passed by an EU government it would have to do so in that country's local or national courts.  If it were prevented from going to court it could then try to bring a claim under arbitration provided for by Investor to State Dispute Settlement (ISDS).

The other case where a US company could use ISDS would be where the point of law it wanted to raise was in the TTIP agreement itself rather than in a country's domestic law.  International treaties are not enforceable in national courts.  ISDS provides an international forum for settling points of international law.

Intellectual Property

No. 

ACTA – the 'Anti-Counterfeiting Trade Agreement' - was meant to stop trade in fake goods between the EU and a dozen other countries.  In some of these countries, enforcement of rules to protect intellectual property was different from that in the EU.  The European Parliament voted against ACTA.  The European Commission fully respects the Parliament's decision and has no intention of trying to introduce ACTA in TTIP.

Both the EU and the US agree on the importance of intellectual property rights for stimulating innovation and growth and for creating jobs.  They also agree that copyright infringement and other infringements of intellectual property rights are bad for the economy.  

Both the EU and the US have detailed and effective laws to protect intellectual property, even if sometimes we take a different approach to achieve it. 

TTIP will not harmonise EU and US laws in this area, but it could enable us to try to resolve some specific IPR issues.  It could also help us work better together in areas of mutual interest.  For example, music artists do not get any royalties when their music is broadcast on the radio in the US, whereas they do in the EU.