In the EU, everyone is now focusing on how to deal with European cooperation after the Brexit vote. Some people are advocating more Europe and others less Europe but this is clearly not the time for a discussion on more or less Europe. We should instead be focusing on things we are already doing and do them right. The most important sign that the EU can deliver for its citizens would be to get a deal on the Transatlantic Trade and Investment Partnership (TTIP) with the US. TTIP would be the largest and most important regional free trade agreement ever done. The US has shown that they want this agreement done for some time and Europe now needs to step up to the task and show that we can deliver a deal before the end of the year.
Next week, the EU and the US embark on the 14th round of negotiations on TTIP. There are talks on this round being the turning point for negotiations. In fact, I believe that this round has to be a turning point in order to see any agreement before the end of the year. In order to get a deal, both sides must be willing to make concessions. European Commissioner for Trade Cecilia Malmström has at least indicated she is willing to give concessions and that is indeed very much needed.
These are somewhat different negotiations for both parties. As the world’s two largest trading blocks, the EU and the US are used to setting the agenda for negotiations with smaller parties and mostly getting it their way. But this time is different, and we must be able to seek an agreement in the middle ground. Let me outline some areas where we need to find solutions to move forward:
Europe needs to improve its services offer. Today, the EU’s offer contains many reservations from national countries making the offer hard to fully evaluate. The fact that the EU has a reservation for “novel services” is perceived as very unclear from Washington and I can only agree. It would be unwise to exclude services related to the trade in goods and to fully get the benefits of trade in goods. We need to ensure that services related to goods sold are also covered in TTIP.
And Washington on the other hand must show more ambition on public procurement. There is indeed a large imbalance between procurement in the EU and the US for the moment. While the EU has one set of rules for procurement for EU, national, regional and municipal procurement there is a plethora of rules between federal, state and even county as well as city rules. I understand that the US cannot change all these rules at once and abolish every Buy America Act in every state but if they want an ambitious agreement with the EU, they must vet every opportunity to get rid of these protectionist laws.
The same thing goes for shipping, where I expect the US be ready to repeal the Jones Act that requires every ship transporting goods or persons between American ports to be built in the US, sail under a US flag, and be US-owned and crewed by US citizens. Senator John McCain has called this “an antiquated law that has for too long hindered free trade, made US industry less competitive and raised prices for American consumers”. I fully agree with him and I hope to see more movement from our American counterparts on this.
Investments must be on the agenda again. There have been new discussions since the EU developed its new and so far untested Investment Court System that is entirely different from the ISDS approach that the US and virtually the rest of the world prefers. I believe this was a bad and risky decision from the European Commission and the Commission will now have to pay the price. Even though the US and the EU are far apart on this we need to be looking for common ground. Investments in free trade agreements are a tricky and not everything on this should be expected to be left to the end game.
The time to find common ground is now. After all, the worst outcome for either the side would be to have no deal at all. In that case, we would miss out on many opportunities for jobs, growth and consumer benefits in both Europe and America. Both sides of the Atlantic are committed to seek an ambitious and comprehensive deal. Even if time is short, time should not be an excuse for seeking a less ambitious agreement or “TTIP light”. Getting TTIP done should be the highest priority on the EU’s agenda in times like these.