The EU-US Transatlantic Trade and Investment Partnership (TTIP) Mr Miroslaw Galar and Ms. Elina Laurinen European Commission, Directorate-General for Trade Council of European Municipalities and Regions, 20 October 2014

Table of content 1. The scope of TTIP 2. TTIP and transparency 3. TTIP services 4. TTIP investment 5. TTIP public procurement

Regulatory Cooperation The scope of TTIP 21st Century FTA Ingredients Tariffs Services Investment Public Procurement Regulatory Cooperation IPR Other TBT & SPS

Transparency in trade negotiations Public consultation before launch Negotiating directives by Council Weekly meeting with Member States in Trade Policy Committee EP Civil Society Dialogue Advisory Group Information on website Final deal to be approved by Council, EP (and national parliaments depending on content)

Services: obligations on trade agreements WTO services agreement (GATS) and EU Free Trade Agreements contain obligations (1) not to apply certain quantitative restrictions (e.g. economic needs tests) and (2) not to discriminate against foreign suppliers. These obligations apply according to a detailed list of specific sectorial commitments (“schedule”) which are subject to exceptions (“reservations”). There are no substantive obligations with respect to non-discriminatory measures of a general nature (e.g. licensing requirements, quality standards)

Services: positive/negative listing Positive listing: Obligations apply only for (sub-) sectors explicitly listed in the schedule. For each (sub-) sector listed, specific reservations can be listed. Negative listing: Obligations apply to all sectors except: Annex 1: list of specific reservations in the form of existing measures with legal reference (+ ratchet) Annex 2: for possible future measures

What is a ratchet? Means that a country cannot reintroduce a particular trade barrier that it had previously and unilaterally removed in an area where it had made a commitment qualifying for ratchet. Public services such as health, education, water distribution are not subject to ratchet

Services: Public services in EU trade agreements (1) The special role of services of general economic interest is recognized in Article 14 of the Treaty and Protocol 26. This is a binding benchmark also for trade policy. TTIP negotiating directives refer to Treaty provisions and GATS practice: "The high quality of the EU's public utilities should be preserved in accordance with the TFEU and in particular Protocol N°26 on Services of General Interests, and taking into account the EU's commitments in this area, including GATS".

Services: Public Services in EU trade agreements (2) Services provided in the exercise of governmental authority EU approach on public services in GATS and FTAs: broad horizontal reservation which preserves the right to have monopolies and exclusive rights for public utilities (“services publiques” in the French version) in the EU at all levels of government, including the local level. Specific reservations on water, public health, public education, social services (no ratchet!)

Example: EU schedule on public services – comparison GATS/CETA (1)

Example: EU schedule on public services – comparison GATS/CETA (2) (2)

CETA: Reservation for water

CETA: Reservation for public education

CETA: Reservations for public health

Services: Conclusion Positive/negative listing is ultimately a technicality Both techniques can result in the same level of ambition and protection But negative listing requires more care in the preparation of the schedule Public services: Broad exception for public services (“horizontal reservation”) and sectoral reservations can be applied in both positive and negative listing. No ratchet

Investment protection provisions and ISDS - general Nothing new: EU MS have 1400 BITs including such provisions. 9 MS have BITs with US What do the provisions provide: Guarantees of fair treatment by host state (no discrimination, due process, compensation if expropriation) access to arbitration (ISDS) if no negotiated solution found

EU policy on investment protection/ISDS Mandate by EU MS: new EU policy on investment protection based on lessons learnt Investment protection and ISDS to be included in all EU trade agreements Ensuring adequate balance between protection of investors and regulatory space by: Affirming States' sovereign right to regulate Clarifying investment protection provisions  Reforming ISDS system (ethics, independence, transparency…)

Investment protection in TTIP Public consultation EU text seeks to address the specific challenges posed by the very intense transatlantic relationship (significant improvements compared to existing investment agreements between EU Member States and the US)

Public Procurement in TTIP Procurement is a key area of interest for the EU US is the second largest procurement market in the world after EU (public procurement is 11% of US GDP) Our major concern is asymmetry in market access; EU companies have limited access to US market, whereas the EU is de facto very open EU access limited especially with regard to US local government procurement contracts (this represents above 50% of all US procurement) Business opportunities and growth potential to EU suppliers; potential for job creation

Main issues in Procurement Main access obstacles in US: 1) lack of transparency of bids and criteria and 2) domestic preferences (Buy American and local preferences– such preferences are illegal within the EU) EU aims to get access to contracts of a broad range of US government entities (Federal and local) and to improve the procedural rules which they apply to EU suppliers. (Both market access commitments and rules are discussed) Aim at market opening without any lowering of standards (environment, social aspects or labour law) Negotiations are about procurement; when contracting entities decide to "out-source". No impact on autonomy/internal arrangements of local governments

Procurement Legal Framework EU takes as starting point the existing commitments under WTO Government Procurement Agreement (GPA) For example, we have no commitments under the GPA for 13 US States and for many US State entities covered, commitments are limited EU takes into full consideration the new EU Procurement Directives adopted in February 2014 (which shall be implemented by Member States by 1 April 2016). EU takes into account also the revised Directive in Utilities and the new Directive in Concessions Negotiations advance with full speed but are still at a relatively early stage and technical discussions necessary