Speech - TTIP: The reality of the EU-US trade talks

European Commission

[Check Against Delivery]

Karel De Gucht

European Commissioner for Trade

TTIP: The reality of the EU-US trade talks

Debate on TTIP, Hosted by Stephan Weil, Minister President of Niedersachsen

Berlin, 9 October 2014

The Transatlantic Trade and Investment Partnership has attracted an unprecedented level of interest for a trade negotiation, all across the European Union, but particularly here in Germany.

Many citizens are concerned about what they hear. But the reality of the negotiation is often different from the picture that is painted by anti-TTIP campaigners, certain political parties and even from many reports in the media.

So I appreciate every opportunity to speak in public about what that reality is. And that is why I am so grateful to Minister President Weil for having organised this conference.

Let me therefore talk for a few minutes about the most common criticisms.

First criticism: The negotiations aim to allow low quality, unregulated, dangerous or unhealthy American products onto the European market. They also aim to undermine the laws we have in Europe that stop our own companies from making and selling products like that.

That is just not true. The deal will not change EU legislation on genetically modified organisms, on beef treated with hormones, on chicken cleaned in chlorinated treatments or on chemicals more generally. Neither will it restrict Europe's sovereignty when it comes to future regulation.

The criticism is untrue for three reasons.

We in the Commission, representing the European Union in these negotiations, reject that idea.

EU Member States, including Germany, reject the idea.

The European Parliament rejects the idea.

Why do we all reject it? Because the European people reject that idea and we live in a democracy. Lowering our regulatory standards is simply off the table.

What is true is that there is a good deal of economic potential in the right kind of regulatory cooperation. But that is a very different thing to lowering standards. And I will come to it in a moment.

Second criticism: Investor-to-state-dispute settlement gives rights to companies to sue governments if new rules cause their profits to drop.

This is not true either. Yes, the Council asked the Commission to negotiate a chapter on investment protection.

But the reality is that the negotiations have been now frozen since March, when the Commission launched an unprecedented public consultation on the issue. It will be for the next European Commission, under President-elect Juncker and in cooperation with Cecilia Malmström, my successor, to decide the next steps.

But let me recall one thing: The idea of investment protection has not been invented for the benefit of Americans. EU Member States already have 1400 agreements like this. They are designed to address expropriations and unfair treatment by companies - not every little disagreement a company may have with the government.

My aim for a system of European investment protection has always been to improve on the current system. And I think we succeeded with this in CETA: there will be well-defined protection against abusive government action, and a transparent arbitration system, in which arbitrators have to follow a code of conduct. And I am not the only one who thinks so: an opinion of the highly prestigious Max-Planck-Institute for International Law in Heidelberg came to the conclusion that there is nothing in CETA which would go beyond the guarantees afforded to investors under the German Grundgesetz: in other words: the investment protection chapter is not the end of German democracy.

Third criticism: The negotiations are conducted in secret.

It is true that the Commission leads these negotiations - and may be the Commission is an unknown animal for many citizens. We are, however, appointed by elected national governments and then approved by the directly elected Parliament. So it's far from a coup d'état.

We are also closely monitored by the national governments and the Parliament. We share all of our proposals and ideas and papers with them and to go and brief them directly all the time. They know what is going on and are not shy at all about giving us advice.

It's also true that during the negotiations themselves there is a certain amount of confidentiality. Trust and personal chemistry are a big part of how deals are made.

But that's not the same as saying the talks are secret. Apart from all the information we share with the Council and Parliament, we also talk to stakeholders from all sides very regularly.

Did you know, for example that, during every round of negotiations, both teams stops talking to each other for a full day, in order to listen to presentations from environmental campaigners, trade unions, consumer organisations, digital rights activists and - yes, God forbid - business?

We also release as much information as we can to the general public. Did you know, for example, the Commission has an extremely detailed TTIP website with masses of information on the talks…

… including the EU's real position papers from the negotiations on the key issues?

Those actions - and many more like them - are the reality of this "secret" deal. And - from what I have heard from my likely successor Cecilia Malmström - the direction is towards even more transparency.

So much for the myths.

But what is the reality in the three pillars of the TTIP negotiations?

Market access means removing tariffs on manufactured and agricultural goods. We want to eliminate almost all of them.

It also means improving access for services companies in a number of sectors, and committing not to restrict existing access to EU or US firms in the future.

However, and I want to be very clear on this, public services are essentially excluded - unless the EU member country chooses to put aspects of them on the table. But this is not the case in Germany, or in the UK, where this is also an issue of concern.

Market access also covers public procurement. There are real barriers to EU exports caused by the fact that US government departments and states are obliged by law to "buy American." We want TTIP to deliver a level-playing field.

The second pillar is regulatory cooperation. In many areas EU and US regulations are very similar but come to slightly different solutions.

With TTIP we can make regulation in those areas work better together. The classic example - and I have more if you want to hear about them - is cars.

Here we are trying to agree that a critical mass of our safety standards deliver the same levels of protection. I don't feel any less safer driving in the US than I do here in Europe, and I hope neither do many of you. What we are working on is how to reconcile that apparent fact with our detailed and different requirements. Nothing sinister, just common sense.

The third pillar on trade rules includes a range of issues.

It is where we would deal with the energy issue, for example. Europe wants guarantees that we will be able to buy the American gas that is now revitalising their economy, because it will help us in our tough negotiations with Russia.

It is also where we would address sustainable development. The idea is to make sure that both sides protect workers and the environment and to give civil society a direct role in implementing the agreement.

And it is where we would put our dedicated chapter on small and medium sized enterprises. SMEs should be among the biggest beneficiaries of this deal but we want to make sure they can easily understand it…

… and also understand the rules and regulations they have to comply with before exporting to the US - which is a genuine trade barrier when you only have a few employees!

***

I don't want to go on much longer, but let me finish by giving you the two reasons why we are doing this deal.

The first is the basic economics.

TTIP will create opportunities for people working in the famous German Mittelstand companies in high-tech infrastructure or engineering.

The same goes for sectors like pharmaceuticals. Those companies would have an easier time exporting to the United States if their factories didn't need to be inspected twice - by EU and US authorities - for compliance with exactly the same rules.

And it goes for traditional firms that are no less important to German and European growth. Like the small tableware producer who today faces tariffs of over 20% in the US - who contacted the European Commission in the hope that TTIP might be able to help them.

There are many other stories of new opportunities like this. And of course, consumers will also benefit economically enjoying greater choice and lower prices.

The second reason for this deal is strategic: it will help us project our shared values in the 21st century.

As recently put forward also by the Minister for Europe of Baden-Württemberg, Mr. Friedrich, we actually share many values with the Americans: open markets, democracy, and respect for the individual for example. If you don't agree, think of some of the world's other major international players and make a comparison. We have our differences, but we have a lot more in common.

Today we are able to promote those values, because we are the two largest economies in the world. But the world is constantly changing.

One of the most important economic facts of our time is that new economic powers - China, India, Brazil and so many others - are emerging.

Let me be clear: Those new powers are very welcome. Just as the West's prosperity, through globalisation, has helped them grow, their prosperity is creating new export and investment opportunities for us.

But the best way to make sure that mutually reinforcing process continues is by making sure that we have an international system - political and economic - that remains committed to open markets, democracy and respect for the individual.

Europe and America's capacity to do that is gradually falling - along with our share of the world economy.

So we need to maximise our influence by sticking together, and leading by example.

And TTIP can help us do that.

***

I have made three points:

TTIP is not an attack on our societies.

TTIP is a sensible series of concrete measures to boost trade.

And TTIP can have both economic and strategic benefits.

That is my case for this agreement.