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“Real Progress” in TTIP Talks Amid Effort to Conclude Agreement by Year End

Thursday, March 03, 2016
Sandler, Travis & Rosenberg Trade Report

Intensified engagement over the past few months has yielded “real progress” in the Transatlantic Trade and Investment Partnership negotiations, U.S. chief negotiator Dan Mullaney said after the most recent round concluded Feb. 26 in Brussels. Mullaney said text has been proposed in the vast majority of the negotiating areas and that in many cases negotiators are already removing brackets and agreeing on wording. Both sides said they are working to conclude negotiations by the end of the year.

On regulation, negotiators advanced discussions of regulatory cooperation and good regulatory practices with the aim of strengthening transparent rulemaking on both sides. They continued discussions on regulatory issues in sectors such as autos, pharmaceuticals, chemicals, cosmetics, engineering, information and communication technology, medical devices, pesticides and textiles and made “significant progress” in identifying their common objectives in these areas. Garcia said the sectoral discussions have advanced sufficiently that text-based negotiations can begin during the next round.

The cross-cutting goal, Mullaney said, is to improve regulatory compatibility in ways that reduce unnecessary burdens on trade while maintaining existing levels of regulatory protection and making better use of regulator resources. Garcia agreed, emphasizing that regulatory cooperation is only possible if levels of protection improve or at least stay the same. He noted that both sides have now tabled new textual proposals aimed at further refining their ideas about how to create a system that facilitates current and future regulatory cooperation in both manufacturing and services. For example, he said, there have been “good discussions” on how to reduce unnecessary duplication or excessive costs in the area of standards and conformity assessment, and the two sides have talked about how to rely more on sanitary and phytosanitary standards work done by each other’s regulators as well as more timely procedures for approvals. Garcia emphasized, however, that TTIP will respect the independence of regulators and domestic regulatory processes and will not change the way either side regulates on public policies such as food safety or environmental protection.

On rules, Mullaney said the U.S. put forward substantive proposals on customs and trade facilitation that seek to simplify customs procedures and cut unnecessary red tape and on rules of origin that seek to ensure that the benefits of TTIP go mainly to those who create value within the transatlantic area. Garcia added that the two sides held their first discussions on the EU’s proposal for a new investment court system and “spent significant time understanding each other’s proposals better and starting to identify areas of convergence.” There were also discussions on labor and the environment as the U.S. put forward texts that would make adherence to standards in these areas enforceable.

During the last round of talks in October the two sides exchanged second tariff reduction offers in which they agreed to liberalize 97 percent of their tariff lines, most of them immediately upon entry into force of the agreement. Mullaney said the U.S. still wants to eliminate all transatlantic tariffs and will work with the EU in the coming months to achieve that objective. In the meantime, officials began last week to discuss how to reduce the phase-out periods for those tariff lines that are not yet scheduled for immediate elimination.

Mullaney said that by July the two sides want to reach “an advanced stage of text consolidation across the board, narrowing down our differences to the most sensitive issues.” Garcia added that there will be deeper discussions of topics such as procurement and rules of origin in the coming weeks and two more formal rounds between now and August. Both officials said they believe negotiations can be concluded by the end of this year but emphasized that they will not accept an “early harvest” or “TTIP light” to reach that goal.

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