EU-US trade agreement unlocks huge potential
Increasing output, improved household income and lots of new jobs – these are just some of the benefits that are expected to follow from successful implementation of the ambitious Transatlantic Trade and Investment Partnership (TTIP) between the EU and the United States. The Ministry for Foreign Affairs held a hearing on TTIP on 17 September.
Invitations to the open event had been sent out to business and industry representatives, members of various interest organizations, researchers and MPs. Comments and questions from the general public dealt with Finnish Arctic competence and related public acquisitions, digital markets, and the status of Turkey and other countries that already have free trade agreements in place with the EU. Questions of food security, the position of European small farmers, GM food and hormones also attracted discussion. Another issue covered at the hearing was the protection of EU employee rights and human rights. There was also active remote participation in the event through Twitter under the hashtag #FINTTIP.
Minister for European Affairs and Foreign Trade Alexander Stubb urged members of the audience to continue to lobby negotiators and the Foreign Ministry. Finland considers it important that special attention is given to openness and transparency throughout the negotiation process. Further open hearings will be held in the future.
Other speakers at the event included Susan Elbow, Deputy Chief of Mission from the Embassy of the United States of America in Finland, and Deputy Chief Negotiator Damien Levie from the European Commission.
Stubb: Get rid of all tariffs in merchandise trade – now
It has been a promising start to the negotiations, Minister Stubb said, as both the EU and the United States have expressed their commitment to an ambitious agreement. It’s thought that the negotiations will be tough, but Stubb believes the timing is right, even in view of President Barack Obama’s term in office.
“I have a sense that President Obama wants these negotiations to become a feather in his cap before 2016.”
Minister Stubb’s assessment was that the TTIP negotiations have broader significance and impact than is usually the case with these kinds of trade negotiations. According to the Commission’s impact assessment, the agreement would increase EU GDP by 0.48% per annum through to 2027, which in money terms translates into some 86 billion euros. This would have significant employment effects. The positive effects of the agreement would extend to developing countries. Minister Stubb challenged the audience to consider whether it is better to have the rules of international trade worked out between the EU and the United States, or to let others decide on those rules, say India and China.
He also stressed that the negotiation process must be open. Most of the negotiations will of course take place behind closed doors, but it’s important to have good dialogue in between the negotiation rounds: the only way to achieve the best possible outcome is to canvass views as widely as possible. There are lots of sensitive issues on the table, and there are bound to be misunderstandings, and therefore it is crucial that there is every possible openness in communication. The Ministry for Foreign Affairs has consulted a broad range of stakeholders and will continue to do so in the future.
“Don’t be afraid of having contact with our main rivals,” Minister Stubb continued. He stressed that Finland is dependent on foreign trade – always has been and always will be – which is because we have such a small internal market. The three key areas of the TTIP negotiations concern market access, regulation and non-tariff trade barriers, as well as global rules, and Finland wants to make ambitious headway in all three areas.
“We need to get rid of all tariffs in merchandise trade – now! And having said that, it’s possible we might need to have some exceptions in agriculture,” Minister Stubb continued. It’s also important for Finland that food security, consumer protection and environmental legislation are not compromised in any way. In conclusion, the Minister made it clear that the ongoing negotiations are a win-win situation.
“The United States is an excellent partner for us, a very difficult partner, but the fact that we’ve got the negotiations moving is half a victory.”
Elbow: Most important item on today’s world agenda
Susan Elbow, Deputy Chief of Mission of the Embassy of the United States of America in Finland, said that the ongoing TTIP negotiations are the most important item on today’s world agenda.
“I know this is a bold statement and I know that we Americans have a reputation for exaggeration. However these negotiations have huge significance, and an agreement would benefit both of us.”
Although trade negotiations might seem a rather tired and old-fashioned subject for a world media preoccupied with Middle Eastern events, this is definitely not true in the case of the TTIP negotiations.
Their significance is amply demonstrated by existing trade figures between the United States and the EU. The value of daily trade is currently 2.7 billion dollars, some 2 billion euros. US-EU trade accounts for 34% of total world merchandise trade and for 40% of total services trade. Together, these two economic areas account for almost 50% of world GDP. Up to 90% of this trade goes on without any problems, but it is estimated that a TTIP agreement would boost the United States GDP figure by 0.4% and the EU’s GDP figure by 0.5%.
“Although these figures might seem small, we are looking at huge amounts of extra economic profit,” Elbow said.
According to Susan Elbow the United States will be aiming in the negotiations to open up the markets for services, to strengthen the role of the United States and the EU, to remove all trade tariffs, to remove non-tariff obstacles to trade even in agriculture, to improve market access for services trade and investments, and to reduce regulation without compromising high health standards. Furthermore it is in the US interest to develop rules, principles and directives in areas where the United States and the EU share common objectives, such as the protection of intellectual property and questions related to regional rules and standards. The United States is also keen to develop the global competitiveness of SMEs. Susan Elbow said that President Obama is committed to reach a broad agreement with the EU as quickly as possible. However it is appreciated in the US that the negotiations will be far from easy.
“Although speed is important, so too is the scope of the agreement. The United States does not want to curtail its objectives just for the sake of achieving an agreement,” Elbow said.
Levie: Public opinion in Europe very positive
Damien Levie, EU Deputy Chief Negotiator for the TTIP process, concurred with other speakers at the event in underlining the significance of the negotiations. He was also pleased to note that both political and public opinion in Europe is very positive. The Commission’s negotiation team have the full support of the Council of Europe, the European Parliament and all 28 Member States. Business and industry has also given its strong backing.
According to Levie the TTIP negotiations hold particularly great promise in the field of regulation, which it is estimated would account for 60–80% of the benefits of an agreement. He says that several EU and US rules share the same goals, although they have different approaches. Automotive standards are a case in point.
“When we travel to the United States on holiday and take a taxi there, we don’t think it’s not safe.”
Reciprocal recognition of rules and standards would bring significant benefits to both parties. EU and US citizens would stand to benefit from an agreement as well: projections are that annual GDP would increase by 0.5% through to 2027, which translates into an extra 545 euros for every European family on average. Growth would also create new jobs for high and low education employees.
At this stage of the negotiation process the Commission’s aim is to take an ambitious stance and not exclude even difficult issues from the negotiating table. The second round of negotiations on 7–11 October will cover all areas. The third round is scheduled for December. Levie says that open public debate and discussion will be encouraged in connection with each round of negotiations.