1. TTIP & Turkey: aligning naturally ? Jacques Pelkmans Istanbul Chamber of Industry conference on TTIP, Istanbul, 13 February 2016 Centre for European Policy Studies www.ceps.eu

2. Three queries on TTIP & Turkey TTIP regulatory cooperation: what it might mean for Turkey ? Should Turkey join the TTIP debate or go for the ‘gains’ ? With TPP and TTIP, China/EU becomes critical, also for Turkey Centre for European Policy Studies www.ceps.eu

3. TTIP Regulatory Cooperation The enormous ‘debate’ about TTIP’s regulatory cooperation is a little ‘unreal’ It can only be understood once one realises that >>> existing (US/EU + WTO) regulatory cooperation for decades never attracted much attention >>> today’s NGO culture, amplified by ‘social’ media, is very ‘anti’ (globalisation, authorities, agencies, business) >>> some segments of society are convinced that trade & investment will generate pressures to undermine SHEC objectives and worsen income distribution significantly Centre for European Policy Studies www.ceps.eu

4. TTIP Regulatory Cooperation (2) EU & US have 25+ years of regulatory cooperation history Often tough, not always productive, yet with successes too (full list in Chase & Pelkmans) Greater confidence in regulatory cooperation, dominated in TTIP by regulators [TBT costs matter only, once firmly established that goals are not affected, the turf of regulators ! Remember the TABD ] Will work selectively, also takes time for “trust” Thus, regulatory cooperation is an opportunity, even when difficult and slow Assertions that Reg Coop would lower objectives [‘standards’] ignore history & duties of regulators, while assuming some ‘new’ power of business they always have [and did not work well in TABD even with CEOs !] Centre for European Policy Studies www.ceps.eu

5. What is TTIP ? chapeau/objectives /principles Market Access Regulatory Cooperation Rules (facilitating im/ex, FDI) Rules (facilitating im/ex, FDI) goods trade/ customs duties services trade public procurement rules of origin regulatory coherence technical barriers to trade SPS – food safety; animal & plant health Specific sectors: chemicals ICT engineering medicines med devices text & clot vehicles sustainable devl. energy & raw matls. customs / trade faciln. SMEs (no real rules) invest. protection + ISDS competition rules IPRs & G.I. overall (Gov-to-Gov) dispute settlement

6. TTIP Regulatory Cooperation (3) For Turkey, its relation with the EU is critical, often decisive in this area If the EU adopts legislation, it could matter for pre- accession, or for the annexes of the EU/Turkey customs union, or could be dealt with via an ad-hoc alignment process for TTIP Most of these will be sectoral and – more often than not - highly technical ; the difference with technical regulation & standards alignment under the CU or pre- accession is not great On technical issues which are ‘big’ for the US, rarely will they be a problem for Turkey (cf. standards ; cars) Centre for European Policy Studies www.ceps.eu

7. TTIP Regulatory Cooperation (4) Formally, Turkey is a 3rd country for TTIP But that is a bit ‘unreal’ too If and insofar as Turkey and the EU resume more actively and with ‘gusto’ the 2 routes of rapprochement [ CU ; pre-accession ] Regulatory cooperation in TTIP in goods and even in services (less developed as yet) should not pose a major problem Aligning (indirect spill-overs) will be subsumed in the natural process of EU/Turkey alignment Direct spill-overs will be rare in TTIP and – anyway – are MFN-based, hence, automatic for all 3rd countries Centre for European Policy Studies www.ceps.eu

8. TTIP debate: ghost-fighting or deal-stopper ? From a distance, it might seem that the EU debate on TTIP is mostly negative One dominant trend is ‘ghost fighting’ fulled by persistent accusations in social media and by some NGOs The ghosts are ISDS (Ph Morris !) and ‘standards’ [= objectives] of protection No matter how often regulators and negotiators repeat how incorrect it is, even ruled out, the mistrust is deep >>> renders MEPs very nervous Centre for European Policy Studies www.ceps.eu

9. Ghost fighting or deal stopper (2) The upshot is that a debate on the economic core of TTIP has become difficult and is regarded as ‘esoteric’ The multifold gains are ill-understood ; or ignored empirical studies get discredited, except when a NO- camp likes it (Capaldo, a sad mishap!) And it is all for big business anyway; Voters who tend to “read” social media, and have little idea of TTIP in substance, swing in the direction of being against That the EU does the same with Japan is ignored ; the deal with Canada [CETA] is neglected except for ISDS Centre for European Policy Studies www.ceps.eu

10. Ghost fighting or deal stopper (3) In July 2015 the EP was so critical that its TTIP resolution was leaning to ‘against, unless’ With lack of US transparency, COM being transparent (also of negotiation round results) and a slow increase in the comprehension of what TTIP really is Chances are slowly turning towards substance rather than symbolism Turkey :focus on the substance and the gains Centre for European Policy Studies www.ceps.eu

11. Differences in EU-US Economic Gains www.ceps.eu © CEPS 4 February 2016

12. TPP and TTIP: China /EU is critical China: biggest EU trading partn.; big for Turkey FDI, far behind the US (in EU), rising quickly In APEC, China risks facing isolation after TPP (and new members of TPP) TTIP causes trade diversion and anyway aims to set new (domino ?) rules of world trade In EU, little China bashing (unlike US) and lots of cooperation; problem: overcapacities [A.D.] Centre for European Policy Studies www.ceps.eu

13. TPP/TTIP: China/EU critical (2) China is seeking a FTA with the EU EU already negotiating GI agreement and [like the US] a CAI [Compr. Agreem. on INV.] COM inching closer to Chinese idea, if Chinese reforms are serious and CAI succeeds For Turkey, this is very important given its trade and FDI pattern; if ever, EU must involve Turkey Cold water : CEPS study shows how far-reaching a FTA with China would be, …. for China ; so did Gary Hufbauer for the US Centre for European Policy Studies www.ceps.eu

14. Thank you for your attention Centre for European Policy Studies www.ceps.eu