USA - American Council on Germany

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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 34-37
D-10115 Berlin
Phone +49(0)30/18615-6096
The Transatlantic Trade and Investment Partnership
– Current Challenges –
I.
II.
III.
IV.
V.
Political Timetable
Transatlantic Trade: Facts and Figures
The EU Negotiating Mandate
Obstacles and Potential Blockades
Reactions of Third Countries
I. TTIP: Political Timetable
• End of possible negotiation period: end 2015
• 7th negotiation round sept 29th – Oct 3rd Wash.
• EU: New European Commission since Sept., new
structures
• USA: Mid-term elections Nov. 2014, → TPA?
End of Obama’s presidency Dec. 2016
• Germany: elections Oct 2017
-3-
II.
Transatlantic Trade: Facts and Figures
-5-
II. Germany‘s Role in International Trade
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Source: WTO
Exporteure
China
USA
Germany
Japan
Netherlands
France
South Corea
Russia
Italy
United Kingdom
Canada
Belgium
Hongkong
Singapore
Mexico
Taipei
India
Spain
Australia
Brasilia
Mrd. US$
2049
1547
1408
799
656
570
548
529
501
469
455
447
443
408
371
301
293
292
257
243
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Importeure
USA
China
Germany
Japan
United Kingdom
France
Netherlands
South Corea
Hongkong
India
Italy
Canada
Belgium
Mexico
Singapore
Russia
Spain
Taipei
Australia
Thailand
Mrd. US$
2335
1818
1168
886
681
674
591
520
505
489
486
462
435
380
380
335
333
270
251
248
II. Germany´s most important
trading partners
Exports
Imports
1990
2012
1990
2012
Rank
Rank
Rank
Rank
France
1
1
Netherlands
2
1
USA
6
2
PR China
14
2
United Kingdom
3
3
France
1
3
Netherlands
4
4
USA
6
4
27
5
Italy
3
5
Austria
8
6
United Kingdom
5
6
Italy
2
7
Russia
10
7
Switzerland
7
8
Belgium
4
8
Belgium
5
9
Switzerland
9
9
Poland
15
10
Austria
8
10
Russia
18
11
Poland
17
11
Spain
10
12
Czech Republic
28
12
Sweden
9
13
Norway
11
13
Turkey
12
14
Spain
12
14
Brazil
32
19
Brazil
21
21
India
34
21
India
33
25
Country
PR China
Country
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%).
-6-
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
-7-
III. Content and Structure of the EU Negotiating Mandate
• 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
-8-
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)
-9-
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?
- 10 -
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
- 11 -
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!
- 12 -
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
- 13 -
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
- 14 -
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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