The first round of negotiations on the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) free trade agreement was more about process than product. As the new U.S. Trade Representative Michael Froman said after the meeting, “…each side presented to the other its ideas on how to proceed, how various chapters might be addressed, and how specific issues might be dealt with in an agreement.” The negotiators will start dealing in specifics in Brussels in October and Washington, DC in December. The U.S. has not yet prepared papers outlining its positions.
According to Inside U.S. Trade, U.S. chief negotiator Daniel Mullaney said the talks will have a broad scope and will not be limited in any way by public statements that the EU will not negotiate on sensitive issues like sanitary and phytosanitary (SPS) rules. The EU has flexibility in their mandate on some issues and the U.S. is not constrained on what will be discussed. The two sides are not starting from ground zero. Before they decided to pursue an agreement, a High-Level Working Group (HLWG) of senior officials had spent more than a year working through substantive issues, like SPS issues, to judge the potential of reaching an agreement.
Mullaney’s comments would also appear to apply to the EU’s use of the ‘precautionary principle’ – an overarching philosophy of prudent caution in environmental programs beyond science-based risk assessment. A leaked EU position paper – EU initial position paper on SPS matters for the TTIP negotiations – did not mention the precautionary principle, but included language consistent with how it is applied in practice in the EU.
The HLWG had two recommendations to address key issues for agriculture. One was a “SPS-plus” chapter, including establishing an on-going mechanism for improved dialogue and cooperation on addressing bilateral SPS issues. The chapter would build on principles in the WTO SPS Agreement, including measures based on science, international standards and scientific risk assessment and developed in a transparent manner. The measures would only be applied to the extent necessary to protect human, animal and plant life or health. Since the standards would be higher and broader than those of the WTO, an enforcement mechanism would need to be included in the agreement.
The other recommendation was to create a similar “TBT-plus” chapter building on the WTO Agreement on Technical Barriers to Trade (TBT), including a mechanism for improved dialogue and cooperation for addressing TBT issues. The goal would be to have greater openness, transparency and convergence in regulatory requirements and standards-development processes. These should reduce redundant and burdensome testing and certification requirements and promote confidence in respective regulatory bodies.
Consumer groups, labor unions and non-government organizations in the EU and the U.S. have entered the debate by being opposed to fewer regulations. In a letter to President Obama and EU leaders, the groups argued that regulations should be handled through a democratic process by the people who have to live with regulations even if that results in higher costs. U.S. and EU official argue the discussions are not about harmonizing regulations upwards or downwards, but avoiding duplication and unnecessary red tape, thus lowering costs to consumers. Food safety and chemicals were two of the product categories mentioned in the letter that will impact U.S. agriculture.
The EU is also caught up in a debate about transparency in decision making. This made headlines when EU officials refused repeated requests for names of negotiators leading the EU issue groups. The EU is using press releases and social media to keep people more informed concerning developments in the talks. The EU Commission scheduled a briefing for groups this week on the Washington talks.
Reuters reported that when U.S. chief negotiator Mullaney was asked if negotiators would be able to finish the deal in 18 months, Mullaney said both sides were committed to moving “expeditiously” but substance would determine when a deal is struck. A two or three year timeline may be more realistic, unless negotiators move swiftly.
How difficult some trade issues are to resolve is shown by negotiations between the EU and Canada on a free trade agreement. They made a determined effort to complete the four years of talks before the TTIP talks began for fear that the EU-Canada talks will be overshadowed by the much bigger U.S.-EU effort. The issues are similar and agricultural issues that are not yet resolved include Canadian beef and EU dairy products. The new target is to be done by the end of summer; that means in September since much of Europe takes an extended break in August. That would be before the next U.S.-EU session in Brussels in October.
The intense interest of groups other than those with direct financial stakes in trade policy is not new, but is being taken to a new level with modern communications tools, the financial resources of special interest groups and the ability of practitioners to craft messages that appeal to a broad audience. The agricultural issues are mostly science-based and not easily understood in media sound bites. U.S. agriculture will need to use all of its resources to get its message understood by the negotiators and by the public with an interest in the outcomes of the talks. U.S. agriculture could win the negotiating effort, but lose the debate among the opinion leaders of the wider public that will influence the U.S. Congress and the European Parliament.
Work on the details of the areas of disagreement does not have to wait for the October meeting. Specialists with years of experience on the issues have been identified in the U.S. and the EU. USTR Froman said he will give negotiators leeway, while staying closely involved. He should get them thinking ‘out of the box’ to avoid a three-year stalemate. Froman also told the McClatchy Washington Bureau, “There’s a strong degree of political will on both sides to try and get this done. And that’s going to be necessary to deal with some of these historically difficult issues.” That ‘political will’ needs to be put to some early tests on minor issues as they work their way to the big ones.