AmCham EU Transatlantic Conference, TTIP Revealed: Fact and Fiction

Dear Chair of the AM CHAM EU,

Your Excellencies, Permanent Representatives from EU Member States and the US,

Distinguished Guests,

Ladies and Gentlemen,

 

Thank you very much for your kind invitation and the warm welcome!

It is a great honour and pleasure for me to be with you today. In an event that highly contributes to the advancement of the EU – US  relationship.  A relationship further reinforced, yesterday, with the successful conclusion of the EU-US Summit. And with the Transatlantic Trade and Investment Partnership (TTIP) being in the core of the discussions.

It was a Summit demonstrating the will of both sides to move things forward. And it also gave answers to some fears.  The words of President Obama that he is not prepared to sign an agreement resulting in less environmental or consumer protection are still echoing in my ears.  And I fully agree! Because in the EU we are determined to do the same.  To sign an agreement making no discounts in health, safety, labour rights, environmental or consumers issues.

EU Trade Policy

However, we have to bear in mind that TTIP is not the first time that the two areas collaborate in the field of international trade.  A good illustration of joint efforts is our common approach on a variety of issues related to the WTO and the frame of the Doha Development Agenda.  And this was obvious during the last WTO Ministerial Summit, last December, in Indonesia.  Where both, EU and US, were among those actively pushing for the trade facilitation agenda and for high standards, that will set the pace for the entire globe.

On the other hand, we have to admit that, despite the progress achieved, things in WTO do not always evolve as speedily as we would wish to.  It is for this reason that the EU feels that we also have to proceed with bilateral agreements.  And in this context we are in negotiations, certainly of different scope and magnitude, with a variety of counties or groups of countries:

Ø  With Canada we are about to conclude CETA (Comprehensive Economic and Trade Agreement)

Ø  With Singapore we have initialled a similar agreement

Ø  With Ukraine, we are about to approve a Regulation awarding to the country all the benefits that would have been derived for it from the Deep and Comprehensive Free Trade Agreement that the circumstances did not allow for its signing.

Ø  With Japan, we are in serious negotiations for a Free Trade Agreement

Ø  China, Mediterranean and Gulf Countriescertain fall into our priorities

Ø  And with Latin American (Mercosur) countries we have already conducted several negotiation rounds.

Ø  And, certainly, we have TTIP

Hellenic Presidency

TTIP is important for Europe.  It is one of the priorities of our presidency.  And it is for this reason, that we decided to dedicate to TTIP a major part of the agenda of the Informal Ministerial Summit of the Trade formation of the Foreign Affairs Council of the EU. A Summit, that took place recently in Athens and I have the honour to chair for this semester.

During the breakfast of the Summit there was a Business Forum, where Ministers listened and the floor was given to Business leaders from both sides of the Atlantic.  Because we feel that decision makers should listen very carefully the views of the stakeholder community and especially the most dynamic parts of it.  And I would like to thank AMCHAM EU and Hendrik in particular for his active participation and comments in Athens.

And TTIP will be again in the agenda of the Formal Summit, in May, here in Brussels.

TTIP Benefits

We are doing this because we are convinced for the benefits that TTIP entails for both sides of the Atlantic.  On the other hand, I have to admit, that to some extend, there is misinformation and fiction.  Some argue that TTIP:

• Will intensify all the bad aspects of globalization
• Will only promote the interests of multinationals
• Will weaken the position of Small and Medium size enterprises, as well as the position of households and consumers

To be honest I do not share those views.  And the best way to persuade you and to persuade at least those who are open-minded from the other side is to present facts and scientific findings.

Benefits from TTIP

In those difficult times, when growth and jobs is the top priority for our economies TTIP is expected to make a major contribution towards that direction.  According to a survey conducted by the London-based Centre for Economic Policy Research TTIP is expected to boost:

ü  EU’s economy by approximately €120 billion a year;

ü  USeconomy by approximately €95 billion a year;

ü   and both GDPs at a level between 0.5% – 1%

ü  And for the average EU household those figures are translated to an annual benefit of €545.

Now let’s combine them with the following 3 facts:

1. The fact that 99% of European and U.S. companies – over 20 million companies in the European Union and around 28million in the United States – are SMEs. 
2. The fact that In the European Union, SMEs provide two-thirds of all private sector jobsand have a tremendous capacity to create new employment. 85% of net new jobs between 2002 and 2010 were created by SMEs.
3. The fact that In the United States, small businesses have provided over half of all jobs and two-thirds of all net new jobs in recent decades.

The conclusion we draw is that, without underestimating the benefits from TTIP for large corpotations, SMEs account for the greatest part of our economies and it is therefore fair to assume that they will reap a major part of the benefit of the extra growth that TTIP will create.

And if this analysis sounds very general let`s examine in a more detailed way the areas from which the benefits are expected to come:

• Tariffs.  Some are extremely high as for example up to 205% on some agricultural items exported to the EU and as mach as 42% on some textiles exported from the EU to the US.  In those sectors, therefore, the corresponding gains could be very significant.  In today’s competitive global marketplace, even small reductions in a product’s total cost due to the abolition of tariffs can make the difference between making and loosing a contract.

• Customs and trade facilitation.  Custom procedures between the two areas are often duplicative, a fact that results in delays when goods are exported.  TTIP could produce greater cooperation and information exchange, expediting the processes. Lower costs, more transparency, and less red tape at borders could be at the benefit of every exporter dealing with the other side of the Atlantic.

• Simplification on Regulatory Issues and Reduction of Non-Tariff Barriers.  Which today take the form of requirements applied at the border or “behind-the-border” barriers.  Progress in this area will result in reducing costs for companies, and potentially opening up new markets for them.

• Services.  The European Union and the United States are the world’s largest service exporters, and many service providers – e.g., lawyers, accountants, architects, engineers, information technology specialists, and environmental services consultants – work in smaller businesses, often as part of the value chain of larger firms.  These smaller service providers would benefit from the improved legal certainty and new market access that TTIP would provide.

• Government procurement.  Increased market access under T-TIP for government procurement could mean for companies access to new government contracts and subcontracts.  This is important because public entities in both the United States and the European Union buy a broad range of goods and services from private sector businesses.

• Intellectual Property Rights.The TTIP will reaffirm the shared transatlantic commitment to strong IPR protection and enforcement, a fact of major importance when dealing with our other trading partners worldwide.

• Electronic Commerce.The Internet allows millions of U.S. and EU companies to reach foreign customers, thereby increasing their revenues and supporting jobs in local communities. TTIP provisions that promote the duty-free treatment of digital products, and consumer access to services and applications of their choice on the Internet can help American and European retailers and service providers.

• Households.  And all seven issues I mentioned before mean more jobs and more freedom of choice for the members of an EU or US household.  They validate therefore in a qualitative way the quantitative result of the €545 annual gain per household from the TTIP.

SMEs and T-TIP

TTIP will be beneficial for companies.  And to allow no room for the possibility that some will not have their fair chance within the frame of TTIP, U.S.and EU negotiators are discussing the inclusion of a chapter dedicated to SME issues. Such a chapter could establish mechanisms for both sides to work together to facilitate SMEs’ participation in transatlantic trade after TTIP takes effect.

A chapter on SMEs could also strengthen existing cooperation between the U.S. Department of Commerce and the European Commission.

Issues for Consideration

However, I have to admit that there is another myth.  That TTIP can serve as a panacea, able to solve automatically all the problems we have in the US and the EU.  But this is simply not the truth.  We can be benefited by TTIP if we do things the right way.  If we successfully deal with all three pillars of the agreement, namely:

1. the Market Access pillar
2. the Regulatory pillar, and
3. the Rules pillar

And if we manage to address effectively key areas where diverged views exist. Such areas are:

• Tariffs,where the US offer should be brought to the same level of ambition as the EU one

• Products of Protected Geographical Indication,which for Europe not only do they constitute a form of collective intellectual property rights, but also are clearly associated with the fundamental rights of the consumers to know the origin of the product they are consuming.  It is an issue clearly affecting EU companies in the agricultural and food sectors, especially in the Southern part of Europe.  It is an area that requires special attention, since there is here major interest not only on behalf of the European Parliament, but on behalf of National Parliaments as well.

• Maritime aspects.  Under the service chapter of the market access pillar TTIP should allow American shipping companies to provide maritime transport services between European ports and vice versa.  Provisions like this will enhance competition and will be beneficial for the end consumer.

• Both sides should do their homework:  EU  should ensure compliance of its Member – States and their regions and the same should happen in the US at both state and local level

• Mutual recognition of standards and specifications,where, despite the agreement in principle, a lot of very detailed work has to be carried out at expert level.  And we have to bear in mind that sometimes the devil is in the details

• Investor to State Dispute Settlement.  We have to strike the right balance between protecting an investment e.g. from an unjustified expropriation and preserving the ability of sovereign states to make policy decisions e.g. prevent smoking in public areas

• An Energy and Raw Materilas Chapterhas to be included to liberalise exports of energy products.  For companies and their ability to successfully compete, it is crucial to have access to energy at competitive prices, whether this can be achieved at the one or at the other side of the Atlantic.

• Access to documents:One reading room in Brussels is not sufficient.

Final Assessment

Having made all the previous analysis then comes the obvious question:

Are we going to have an agreement?

The answer here is not a simple one.  It is not a yes or no case.

Personally, coming from a country like Greece, with a pro- Trade and pro-Business background I am in favour of the agreement.

But we have to be careful:

Ø  We have to include in the process as many stakeholders as possible

Ø  We have to make things as transparent as possible.  Because transparency is the best answer to the fiction and the various myths and rumours circulated by anti-TTIP lobbies, and

Ø   We have to bear in mind that no matter what the outcome of the work of the negotiators will be the democratic approval processes are vital and cannot be circumvented.

Provided therefore that we take those things seriously and  that we also have in mind the detailed aspects I mentioned previously, I believe that we will be able to overcome the difficulties and finally achieve a win – win situation for our nations, our people and our companies.

Thank you very much for your attention!