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The Transatlantic Trade and Investment Partnership: Current Challenges American Council on Germany Luncheon Speech Kissinger Lecture Series New York, Sept.

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Presentation on theme: "The Transatlantic Trade and Investment Partnership: Current Challenges American Council on Germany Luncheon Speech Kissinger Lecture Series New York, Sept."— Presentation transcript:

1 The Transatlantic Trade and Investment Partnership: Current Challenges American Council on Germany Luncheon Speech Kissinger Lecture Series New York, Sept. 29rd, 2014 Dr. Berend Diekmann Federal Ministry of Economic Affairs and Energy Head of Division USA, Canada, Mexico Scharnhorststrasse D Berlin Phone +49(0)30/

2 The Transatlantic Trade and Investment Partnership – Current Challenges – I. Political Timetable II. Transatlantic Trade: Facts and Figures III. The EU Negotiating Mandate IV. Obstacles and Potential Blockades V. Reactions of Third Countries

3 I. TTIP: Political Timetable End of possible negotiation period: end th negotiation round sept 29 th – Oct 3 rd Wash. EU: New European Commission since Sept., new structures USA: Mid-term elections Nov. 2014, → TPA? End of Obama’s presidency Dec Germany: elections Oct 2017

4 II. Transatlantic Trade: Facts and Figures - 5 -

5 II. Germany‘s Role in International Trade Source: WTO

6 ExportsImports CountryRank CountryRank France11Netherlands21 USA62PR China142 United Kingdom33France13 Netherlands44USA64 PR China275Italy35 Austria86United Kingdom56 Italy27Russia107 Switzerland78Belgium48 59Switzerland99 Poland1510Austria810 Russia1811Poland1711 Spain1012Czech Republic2812 Sweden913Norway1113 Turkey1214Spain1214 Brazil3219Brazil21 India3421India3325 II. Germany´s most important trading partners

7 II. Transatlantic Trade: Facts and Figures USA: Second most important sales market for Germany in 2013 (8,1% share of total German exports) The country showing by far the greatest positive change in the German export market (+1,2 % since 2011) In fourth place for German imports (5.4% of total imports), The country with which Germany has the largest trade surplus (2013: +€39.8bn or 20.2% of the total trade surplus) German share of EU exports is very high, particularly for machinery (34%) and vehicles (55%).

8 III. Content and Structure of the EU Negotiating Mandate Trade in goods: Improvement in market access, not least through the reduction of all tariffs in bilateral trade, few exceptions for particularly sensitive products, convergence of diverging rules of origin concepts. Trade in services and investments: Market access for investments (incl. financial services) based on the highest level of liberalization and protection that the contracting parties will have agreed on in existing FTAs. Provisions on the protection of investments and on dispute settlement between investor and state. Respect carveouts included in GATS

9 III. Content and Structure of the EU Negotiating Mandate -8- Public procurement process: Improvement of access to procurement markets at all levels of government. Regulatory issues and non-tariff barriers to trade: Reduction of barriers through improvement of regulatory compatibility, technical requirements, standards and conformity assessment procedures. Horizontal regulations for improved regulatory consistency (incl. early consultations, RCC). Sector-specific requirements in areas of importance for transatlantic economic relations (incl. automotive industry, chemicals and pharmaceuticals industry, health sector, information and communications technologies). Financial services regulation outside TTIP, but EU wants to create framework under TTIP

10 III. Content and Structure of the EU Negotiating Mandate Negotiations on general trade rules: matters of international property rights (GI!), aspects of environmental and labor law relevant to trade and sustainable development; provisions on competition policy and state monopolies, energy and raw materials. Creation of an institutional framework: To monitor obligations and the steps being taken to achieve compatibility between regulatory systems; realization of a dispute-settlement mechanism. No dangers and no contravention of multilateral rules as long as barriers to trade and tariffs are eliminated for substantially all trade within appropriate transition period. → A reason against completely exempting entire (relevant) sectors or areas (Art. XXIV GATT)

11 IV. Obstacles and Potential Blockades France/Germany: Sectors of the economy that concern cultural goods exempted (e.g. the film industry, television licensing, music industry). audiovisual services exempted: special role of public service broadcasting, preferential treatment of public service broadcasting when capacities are low (cable, satellite or analog broadcasting). Foreign providers indirectly put in a poorer position? German funding of films: Providers from third countries put in a poorer position, access to funding for films? Transferring of content requirement to new media? “Connected TV”, “ Video on Demand ”, regulation in non-linear range?

12 IV. Obstacles and Potential Blockades Green party/Consumer protection associations: against the importation of hormone-treated meat, GMO. USA: base SPS standards on science with emphasis on scientific risk assessment. (→GMO, hormone beef). EU: precautionary principle, GI (Italy, France, Spain) USA: Strong criticism in the Senate of regulation on U.S. meat exports to the EU that is not justified on scientific grounds. Possible US counteraction in case of EU exemptions: public procurement (“buy American”), particularly at federal level; access to ports. Maritime Services (Jones Act) → AFL-CIO Transparency of negotiations: No access by national experts, parliamentarians to US positions or consolidated texts yet, →Brussels reading room

13 IV. Obstacles and Potential Blockades Market access and investment protection: Creation of external arbitration proceedings (investor – state dispute settlement, ISDS) for the USA, despite the fact that the USA – as an OECD country – can offer foreign investors effective legal protection? → Arguments about competency between the EU Commission and governments at national level → National legal recourse first! → Protection against ill-founded claims! → Shell companies, New York claims industry Regulatory cooperation: → US: “notice and comment”, EU: no privileged access for US before EP!

14 IV. Obstacles and Potential Blockades Many options for standardization: →Mutual recognition of regulatory certification procedures →Mutual recognition of regulations →Functional equivalence →Technical harmonization Role of OIRA, ANSI/NIST? UN/ECE for automobiles? ISO/IEC? Further potentially explosive areas: Data privacy: →U.S.: free movement of information, restrictions on grounds of national security →EU: protection of personal data, protection of young people

15 V. Reaction of Third Countries Aim: To create the basis for a new level of multilateral liberalization. Positive: Important field of experimentation for closing loopholes in multilateral rules. Regulatory convergence between the two leading economic areas could create global standards. No discrimination of third countries in terms of deliberate trade diversion as the focus is on deepening trade and investment relations that are already well-established. New proposals at multilateral level or the desire of third countries to accede to TTIP automatically generate further momentum in the liberalization process

16 V. Reaction of Third Countries Negative: Formation of regional tree-trade areas between third countries which are inconsistent with the Transatlantic Partnership (“opposing blocks”) preferential access to US/EU markets devaluated (Turkey, Mexico) Neglect of multilateral approach due to lack of resources


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