TTIP in 2015: The View from Brussels

Is 2015 realistic for conclusion of the deal? This interview in POLITICO with Hosuk Lee-Makiyama and MEP Marietje Schaake, published in POLITICO is available for the subscribers of Politico Pro. It is republished here with the kind permission of the publishers. 

The coming year will be crucial for the Transatlantic Trade and Investment Partnership, a massive new trade agreement between the United States and European Union. Both sides have pledged a “fresh start” for the talks, and European leaders this month pressed for concluding the deal in 2015.

A final deal, however, is still far from view. The pact aims to address the few remaining transatlantic tariff barriers and, more important, increase trade by easing regulatory differences in critical sectors. But the two sides have little to show since negotiations started in July 2013. That work could grow even more difficult as a well-organized opposition movement grows in Europe. That movement has focused much of its attention on the potential inclusion of an investor-state dispute settlement mechanism that allows private companies to sue governments over regulations or law they deem to be damaging to their business.

POLITICO asked two leading trade figures in Brussels about prospects for TTIP in 2015. Marietje Schaake is a Dutch member of the European Parliament and is the point person for her Liberal political group on Parliament’s International Trade Committee. Hosuk Lee-Makiyama is director of the European Center for International Political Economy.

Do you expect opposition to TTIP grow in Europe in 2015? Why or why not?

MS: 2015 will be an important year for TTIP. Both sides have stated they want a so-called fresh start for the negotiations. The Commission’s transparency initiative and the fact that the upcoming negotiation round is being prepared via telephone calls shows they are willing to press on. Hopefully, this will go hand in hand with more commitment from European member states and stakeholders to speak out for TTIP and to indicate why this treaty can benefit Europe and Europeans. While discussion on TTIP is very welcome, it must be done on the basis of facts. If we manage to move toward this more fact-based discussion, people will be able to see why and how TTIP can be a benefit for them.

HLM: Brussels is bracing itself for things to turn even darker before it dawns. The opposition against TTIP in EU member states is still growing and mobilizing — and the EU has entered into a phase where key EU member states keep their leash short on the European Commission Several member states are weak coalition governments, and politically vulnerable. TTIP talks were opened because Germany decided that it was prepared to pay for the talks and be a demandeur, a role she no longer has any intention of playing alone.

What will be Parliament’s role in the TTIP negotiations be in 2015?

MS: As we have been doing, the Parliament will continue to follow TTIP critically. With a special U.S. monitoring group, we meet with the EU negotiators before and after every negotiation round and when it is needed. Parliament has shown it can play an active role. The ISDS consultation and transparency initiative from [EU Trade] Commissioner [Cecilia] Malmström was a result of pressure from our side. The European Parliament must also be a platform for stakeholders to voice their concerns and to provide input to the negotiators. Stakeholders are already contacting us and I hope this will continue. Parliamentarians need the input from experts to make sure they can make the right choices for the right reasons.

HLM: The European Parliament has technically no role to play before it ratifies the finalized agreement, when they do, they decidedly vote according to the instructions of their capitals. However, considering the Parliament’s limited understanding and experience in dealing with trade, the MEPs quickly lend themselves to special interests (that tend to be protectionist), or hijack trade agreements to promote their own personal political platform on non-trade issues (such as environmental issues or human rights). There will be many more empty statements by MEPs of how they will not be voting for TTIP unless their (often irrelevant) pet peeve is corrected.

The European Commission will develop in 2015 a position on a including a controversial ISDS mechanism. How will that be influenced by Parliament?

MS: The decision to halt negotiations on investment and to launch the ISDS consultation was at least in part due to pressure from the European Parliament. Commissioner Malmström has indicated that once the results of the consultation have been launched, she will enter into a dialogue with both Parliament and the member states to discuss what the next steps should be. I expect Parliament to be fully involved in this process and I expect the Commission to listen. Parliament’s support will be crucial for the commissioner and this will be an important process for her to show her commitment to working closely with MEPs.

How much will the Commission’s position on ISDS impact the EU’s overall position in the talks?

HLM: ISDS is a red line for Germany since it was presented with a 4.7 billion euro investor dispute from Sweden. And I can’t foresee a scenario where the U.S. would agree on non-inclusion. I am aware that the Commission is trying to create a position in the vacuum in-between — and the Commission itself is probably not sure whether such middle ground actually exists.

Is there satisfaction with the Commission’s transparency initiatives? Does more need to be done to change public opinion in Europe?

MS: Broadly speaking, the Commission’s transparency initiatives have been well-received. There are still some questions regarding the precise modalities for providing a large amount of texts to a large amount of MEPs, but this is set to be resolved in January. The fact that the text of the negotiating mandate has been made public by the member states is also an important step. Now I hope people will actually go and read these texts. Hopefully, the initiative will lead to a more fact-based discussion. We should also look into whether this initiative can be a model for other negotiations. At the same time, I think it should be clear that trade negotiations cannot be conducted in front of the camera. A certain amount of discretion will be necessary to make sure that negotiators retain the space they need to make proposals and to come to an agreement. We cannot expect negotiators to make their entire negotiating strategy public.

HLM: As with many challenges the new Commission is facing, it has no choice but to take two steps backward before it can move forward. The TTIP cheerleading is inept, awkward and condescending, whereas the opposition is surprisingly well-funded, and fueled by the crisis and the anti-globalisation sentiments and political instability it spurred. Normally, showing your cards just weakens your hand — yet it helped to keep member states committed to the negotiation in exchange for eroding the Commission’s flexibility to negotiate.

Is TTIP a long-term prospect given the political realities on either side of the Atlantic? Is 2015 realistic for conclusion of the deal?

MS: In TTIP, as in all trade negotiations, we need to look at quality. It is more important to have a good TTIP, which benefits both Americans and Europeans, than a quick deal? The aim should be a comprehensive deal to reap real benefits, not a deal that only touches on marginal and easy issues. We will have to see whether 2015 is a realistic time frame to do that, but I think that it should at least be possible for negotiators to make good progress. If they can get closer to a framework agreement, that can also be used to demonstrate where we are heading and to dispel myths that are circulating about TTIP.

HLM: We’re talking 2015 on the Islamic calendar right? [It is currently the year 1424 on that calendar.]