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Topic - TTIP

Transatlantic Trade and Investment Partnership (TTIP)

Introduction

The Transatlantic Trade and Investment Partnership (TTIP) is an extraordinary project which can generate a substantial impact on growth and employment in the EU and the U.S. At the same time, it is important to uphold the social, environmental and consumer protection standards in Germany and Europe.

The envisaged agreement aims to make rules and regulations for business in Europe and the U.S. more compatible in the long term. The two sides’ negotiators are also seeking to eliminate tariffs and other barriers to trade that exist between the EU and the U.S. The aim is to further open up the markets on both sides of the Atlantic. Also, TTIP should reduce restrictions on commercial services, improve investment security and fair competition and facilitate access to public contracts at all levels of government.

So it must not lower economic, social or cultural standards. On the contrary – the objective must be to use this free trade agreement to make global advances in the areas of sustainability, consumer protection and employees’ rights.

The envisaged Transatlantic Trade and Investment Partnership (TTIP) between the EU and the U.S. is intended to set ambitious standards for global trade. In an open letter, Economic Affairs Minister Sigmar Gabriel addresses the fears that many people have about TTIP and makes it clear that only democratically elected parliaments will decide in Europe about consumer and environmental protection, social security and cultural diversity. The minister’s letter (PDF: 1MB; in German).

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The negotiations

The basis: a joint negotiating mandate from the Member States

On the European side, the negotiations for TTIP are being conducted by the European Commission, or, to be more precise, by its Directorate-General for Trade. EU Trade Commissioner Cecilia Malmström is the commissioner with political responsibility for the TTIP negotiations.

The role of chief negotiator for the European Commission has been assigned to Ignacio Garcia Bercero from the Directorate-General for Trade. On the U.S. side, United States Trade Representative (USTR) Michael Froman is politically accountable for the negotiations. Dan Mullaney is chief negotiator for the U.S. side. For additional information about the US negotiators, please consult the website of the USTR.

The latest round took place in New York from 25 to 29 April 2016. The next, 14th, round will probably be held in Brussels in June.

The basis for the negotiations is a joint negotiating mandate from the EU Member States. The German government, just like all the other national governments of the EU member states, was involved in the drafting of the negotiating mandate. In line with Germany’s clearly stated desire, the European Commission published the negotiating mandate on 9 October 2014.

EU publishes draft texts and position papers

Regarding many chapters of the planned agreement, the European Commission has published both easy-to-understand 2-page factsheets and specific proposals for wordings which are being used in the negotiations with the U.S. As soon as new documents become available, these are published online at ec.europa.eu/trade/ttip-texts.

For example, after the twelfth round of negotiations, the European Commission published a revised proposal on regulatory cooperation between the EU and the U.S. Also, since the 11th round of negotiations, the European Commission has provided detailed reports to the public in all the EU languages.

The issues

Boosting growth and employment by removing barriers to transatlantic trade

Intensifying trade should increase the number of jobs on offer, expand product diversity and in some cases result in lower prices for consumers. The EU will retain its basic laws on the protection of people, animals and the environment.

An ambitious agreement that would go well beyond cutting tariffs would serve consumers and companies in many different ways. This is why the German government favours such a far-reaching agreement. Despite the many years of efforts to liberalise world trade, many obstacles impeding free transatlantic trade in goods remain in place. Apart from tariffs, which have already been brought down to comparatively low levels, it is mostly non-tariff barriers to trade (such as differences in technical requirements for products) that drive up costs in trade relations between the EU and the U.S. This is due to the fact that manufacturers have to produce two different versions of the same product to meet the respective requirements of the EU and the U.S. markets. And this is precisely what TTIP aims to change: TTIP gives us an opportunity to make rules and regulations for business in Europe and the U.S. more compatible in the long term. For the German government, it is of utmost importance that the agreement must uphold and safeguard the high level of protection enjoyed by European consumers.

Lower tariffs, better coordination

Reducing tariff barriers is a key objective of TTIP. Studies have shown that a full reduction of tariffs could save German firms billions of euros, and greater coordination of regulations and standards is expected to provide even greater impetus. Greater coordination on standards, testing and authorisations could do away with an enormous amount of costs. Small and medium-sized enterprises in Germany which have often not been able to afford new certifications in the U.S. would particularly benefit from this.

SMEs in particular benefit from better coordination and simpler rules

Both trading areas already have very high standards for product safety, environmental and consumer protection. A large number of technical standards – e.g. in the automotive industry – are defined differently in the U.S. and the EU, but have the same objective. This applies, e.g. to the size of rear-view mirrors, the strength of metal sheets, the size and load-bearing capacity of rims, the procedure for measuring emissions and the assignment of authorisations. The recognition of equal standards or the abolition of duplicated licensing procedures that are comparable can achieve cost benefits and synergy effects here.

Aligning standards and procedures – without any loss of consumer protection

An important point for consumers: the EU will not repeal any of its basic laws on the protection of people, animals and the environment. Rather, various standards and procedures will be harmonised in any areas where bureaucratic barriers can be removed without reducing consumer protection. Public service provision will not be affected by TTIP either. The high level of protection for certain basic services at a local level in relation to water, health and education in Europe is not up for debate.

In focus: investment protection

Investment protection and dispute settlement

Not least, wide-ranging public consultation has shown that the issue of investment protection is highly contentious. In response, the European Commission presented a proposal in September 2015 for a modern approach to investment protection in TTIP. It envisages a move away from the present investor-state dispute settlement and suggests substantive reforms.

The German government’s view

The German government takes the view that special investment protection provisions are not required in an agreement between the EU and the U.S. as foreign investors in the U.S. and Germany enjoy sufficient legal protection through the national courts. The European Commission and several other EU Member States, however, want to include investment protection provisions in free trade agreements with industrialised countries such as Canada and the U.S.

The German government therefore believes that TTIP offers an opportunity to reform the existing investment protection system and to set a standard for modern investment protection and a more law-based, transparent dispute-settlement procedure with a public trade and investment court. Significant progress has already been made.

European Commission with new proposal on investment protection

In September 2015, the European Commission presented a proposal for modern investment protection in TTIP which was subsequently discussed with the EU Member States and the European Parliament. Following the European Commission, the EU Member States also opted in favour of a modern and fundamentally reformed investment protection mechanism (in German) on 27 November 2015. The revised proposal was sent to the United States and published on 12 November 2015. It provides for substantive and procedural reforms, moving away from the existing investor-state dispute settlement procedures:

  • Preserving the right to regulate: The Commission’s proposal provides for a binding rule according to which laws and other state measures that are necessary in the general public interest must not be undermined with reference to investment protection provisions. This also applies to state measures for the promotion of culture.
  • Investment Court: Claims submitted by investors shall in future be decided by an investment court consisting of publicly appointed judges. Unlike in the past, the judges shall no longer be appointed by the parties to a dispute, but by the parties to the agreement, i.e. in the case of TTIP the EU, the EU Member States and the U.S. In the first instance, the total of 15 judges shall publicly hear cases in divisions consisting of 3 judges. The divisions shall be composed in accordance with an objective procedure without involvement of the parties to the investment dispute.
  • Transparent proceedings: In the future, written submissions shall be published, and hearings shall be open; directly affected third parties can participate in the proceedings.
  • Appellate body: In addition, the proposal provides for a genuine appeal mechanism with publicly appointed judges, which will also take transparent decisions.

The EU’s proposal for an investment chapter in TTIP can be found here (PDF: 420 KB). On the basis of this proposal, the negotiations on investment protection, which had been interrupted since mid-2014, were resumed during the 12th round of TTIP negotiations at the beginning of 2016.

The proposed text for reformed investment protection is to form a basis not only for TTIP, but also for other agreements covering investment protection. Besides this, it is to be the first step towards an International Trade and Investment Court.

The German government welcomes the initiative by the European Commission for modern investment protection in TTIP and other agreements. The European Commission is responding to the concerns expressed in the context of the public consultations on investment protection and investor-state dispute settlement in TTIP which the European Commission had held from the end of March to July 2014. In January 2015, the Commission released a first report on the outcome of the consultation (PDF: 501 KB).

Building on this report, Minister Gabriel and his counterparts from France, the Netherlands, Luxembourg, Denmark and Sweden submitted specific proposals for improved investment protection and investor-state dispute settlement in February 2015 (the Madrid paper). In May 2015, the European Commission, working from the outcome of the consultations and the proposals in the Madrid paper, presented a concept paper for the modernisation of investment protection; this was fleshed out in its proposal of September 2015.

Democratic decisions and legislation must not be undermined

The final decision on whether investment protection provisions will be included in TTIP will be made once the negotiations have been completed and following an evaluation of the results of the negotiations by the Member States. The German government will certainly ensure that provisions to protect public interests which arise out of constitutional and democratic processes cannot be undermined or circumvented by investment protection provisions.

Frequently asked questions about the Transatlantic Trade and Investment Partnership (TTIP)

1. What are the TTIP negotiations about?

See answer Open detail view

2. Who exactly is negotiating the envisaged free-trade agreement?

See answer Open detail view

3. Timetable of events so far; outlook

See answer Open detail view

Transparency and participation

For an open and objective debate on TTIP

The Economic Affairs Ministry involves civil society, business associations and research establishments in the debate about the details of TTIP and advocates an open and objective debate. After all, TTIP is a project that is meant to benefit the general public and business, on both sides of the Atlantic.

It is important that negotiations are as transparent as possible and include a healthy democratic debate. A transatlantic agreement that is intended to benefit citizens must not be negotiated as though the substance needs to be hidden from the public. There is therefore a need for a clear factual basis on which to discuss the pros and cons of TTIP. The Economic Affairs Ministry has compiled the main assertions and facts (in German), and the most frequently asked questions and answers.

TTIP reading room in the Economic Affairs Ministry

Federal Minister Sigmar Gabriel is an advocate of greater transparency in the TTIP negotiations. For example, the Economic Affairs Minister has ensured that, from 1 February 2016, all the members of the Bundestag can see the consolidated negotiating texts, which consist of EU and U.S. proposals for wordings, in a TTIP reading room in the Economic Affairs Ministry. This gives the members of the Bundestag full access to the current state of negotiations. Apart from the members of the Bundestag, the members of the Bundesrat have also enjoyed access to all consolidated texts since 7 March. The staff of the government can also use the reading room. At the end of the TTIP negotiations, the negotiated text will be published online and translated into all of the EU’s official languages. Before a national parliament votes on the agreement, for example, citizens and members of parliament will have plenty of time in which to find out about the agreements between the European Commission and the U.S., and to scrutinise the text.

Dialogue forums and initiatives organised by the Federal Ministry for Economic Affairs and Energy

Since the beginning of the talks, the Federal Ministry for Economic Affairs and Energy has been holding regular events to promote dialogue with citizens, NGOs, business associations, and trade unions, to inform them about the state of the negotiations and provide opportunities for objective discussions. The ministry also reports to the Bundestag and the Länder and supplies them with the relevant reports and information.

  • TTIP Advisory Group at the Federal Ministry for Economic Affairs and Energy

In May 2014, the TTIP Advisory Group, a body set up by Federal Minister for Economic Affairs Sigmar Gabriel, convened for the first time. The group meets to discuss the ongoing TTIP negotiations and helps to establish the German position for the TTIP agreement. This new advisory group is composed of representatives from trade unions, welfare, environmental and consumer associations, from the creative arts, and other fields. The Advisory Group addresses important issues and relevant debates surrounding TTIP: in its meetings so far, the Advisory Group has focused on the creative arts, consumer protection, services of general interest, regulatory cooperation, sustainability, SMEs and the free trade agreement between the EU and Canada (CETA).

  • Dialogue forums organised by the Federal Ministry for Economic Affairs and Energy

The ministry’s dialogue and discussion forums provide opportunities for citizens, business representatives, trade unions and civil society organisations to state their views and ask questions related to TTIP, but also to discuss opportunities and challenges and address concerns. The latest dialogue forum was held during the Hannover Messe on 25 April 2016. It focused on the opportunities that TTIP offers for SMEs.

Dialogue and consultation services of the European Commission

The European Commission also wants the public, associations, NGOs, trade unions, and civil society groups to be kept fully informed about the negotiations on TTIP. Multiple consultations (e.g. on investment protection) have already been carried out in the lead-up to the negotiations at EU level. Furthermore, the European Commission has made position papers public and is conducting hearings during each round of negotiations. It has also been hosting various information events.

As part of its transparency initiative, the Commission has been publishing two-page fact sheets since February 2015; these cover the negotiating text presented by the U.S. negotiators and position papers on the issues up for negotiation. You can find out more here.

On 27 April 2016, the Commission also published a state-of-play report; it reflects the current situation in various fields of the negotiations.

Press releases

Comments and materials

Clear position, comprehensive information

The Economic Affairs Ministry wants transparency and dialogue. There is a need for a clear factual basis on which to discuss the pros and cons of TTIP. The Economic Affairs Ministry has drafted joint positions on TTIP with various players in society; these papers also clearly address critical points.

Joint position with German Trade Union Federation

In September 2014, the Federal Ministry for Economic Affairs and Energy and the Confederation of German Trade Unions (DGB) published a joint paper (PDF: 30 KB; in German) on TTIP. The paper sets out the requirements to be fulfilled in the trade talks between the EU and the U.S., including those on sustainability, labour rights and public services. The ministry and the Confederation of German Trade Unions may not agree on every point, but there are many areas where they do pursue the same objectives. This is particularly true of labour rights and consumer protection, welfare, and environmental standards, which must not be jeopardised. The Federal Ministry for Economic Affairs and Energy and the German Trade Unions also emphasise that the trade talks between the major economic areas of the U.S. and the EU open up the opportunity to intensify our economic relations and to make them fair and sustainable.

Position paper with the umbrella associations of the municipalities and the Association of Municipal Enterprises (VKU)

On 12 June 2015, the Federal Ministry for Economic Affairs and Energy (in German), the umbrella associations of the municipalities (Association of German Cities, German Association of Towns and Municipalities, German Rural District Association) and the Association of Municipal Enterprises (VKU) published a position paper (PDF: 210 KB; in German) on the TTIP negotiation process, stating that the high quality of services of general interest must not be jeopardised.

German government position paper on the protection of culture and media in TTIP

On 8 October 2015, the German government presented a position paper (PDF: 376 KB; in German) on the protection of culture and media in TTIP. The paper clarifies the position of the German government: TTIP will not harm cultural and media diversity. Minister Sigmar Gabriel also gives an assurance that the protection and the possibility for the promotion of cultural diversity will be guaranteed, as will retail price maintenance for books. With regard to retail price maintenance for books, for example, Minister Gabriel is engaged in a dialogue with the German Publishers and Booksellers Association (PDF: 311 KB; in German).

Position paper with the Federal Association of Non-statutory Welfare (BAGFW)

On 22 February 2015, the Federal Ministry for Economic Affairs and Energy and the Federal Association of Non-statutory Welfare (BAGFW) presented their joint positions (PDF: 63 KB, in German) on protecting (non-profit) social services in the context of the envisaged TTIP agreement.

Position paper with the German Olympic Sports Confederation (DOSB)

On 9 October 2015, the Economic Affairs Ministry and the German Olympic Sports Confederation published a joint position paper on TTIP. The paper confirms that TTIP will not affect recreational sport in Germany. In particular, the paper makes it clear that TTIP will not affect the non-profit nature of registered associations, the current funding possibilities and the financial structures to benefit sport in Germany. It also stresses the special role played by not-for-profit sport in the field of education and training in Germany.

Further information

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