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TTIP panel discussion at Westminster draws a crowd

Published: Friday, 8th November 2013

A panel discussion on 30 October 2013, in the Speaker’s State Rooms, sponsored by the Ditchley Foundation and the British-American Parliamentary group

EU/US free trade: how to overcome political and economic obstacles to the Transatlantic Trade and Investment Partnership (TTIP)

The debate, chaired by Ditchley Director Sir John Holmes, attracted a large audience of around 100, mostly Members of Parliament from both Houses, together with a number of outside experts. After an introduction about the magic of Ditchley from Lord Robertson, Chair of the Council of Management, the four panellists launched the discussion with brief comments on how they saw the prospects for the TTIP.

L to R: Martin Donnelly (obscured), Douglas Alexander, Sir John Holmes, Lord Robertson, Ambassador Barzun, Sr Ignacio Garcia BerceroThe new American Ambassador, Matthew Barzun, used props of a cake and a pebble to drive home his main point that while there were no doubt many obstacles on the road to a successful TTIP, the overwhelming need was to stay positive about the opportunities presented by freer trade between the EU and US. The problems could be overcome if there were sufficient political will and determination on both sides. He knew from his contacts in Washington that the drive and the excitement at the possibilities were there on the US side, from President Obama downwards. The appointment of Mike Froman to be the US Trade Representative (USTR) was an important signal of this. Ambitions should be kept high.

The Commission’s chief negotiator for the EU-US and EU-India Free Trade Agreements, Ignacio Garcia Bercero, made clear that the Commission was well aware of the obstacles which could get in the way of agreement, but was equally determined to make progress. The proposals were well thought-out, and represented much more than just a trade agreement. Progress was necessary in areas like public procurement and market access. The aim was not deregulation, but a move from a culture of regulatory competition to one of regulatory cooperation. Discussions in areas like this would clearly attract a lot of public attention, and emotion. A major effort to create better understanding and avoid dangerous misperceptions was therefore needed. He concluded that a successful EU/US agreement could open the way for more progress at global level, even if that could not be taken for granted.
Douglas Alexander, Labour Shadow Foreign Secretary, stressed five points:

  • The importance of strong, bipartisan political support for the negotiators;
  • The need for understanding and support from business, organised labour and public opinion;
  • The level of ambition of the timetable of 18-24 months – success would depend on the US Administration being granted Trade Promotion Authority (what used to be called Fast Track Authority) by Congress;
  • The difficulty of agreeing the regulatory issues, which meant minimising the scope given to the regulators to disagree;
  • The continuing importance of transatlantic coherence and economic power, even in the “Asian century”. TTIP was a huge opportunity to show this.

Martin Donnelly, Permanent Secretary at the Department for Business, Innovation and Skills, underlined the critical importance of a successful TTIP negotiation for the health of the world economy, but also suggested that the window of opportunity might not be open for long. He stressed the vital need for trust between the parties. This could not be taken for granted, even between the EU and US. The EU/Canada deal showed the way in areas like intellectual property, trade in services (where data protection concerns were very important), rules of origin and geographic indicators, and sensitive areas like the automotive sector. At the same time, he noted that the nature of such negotiations might also be behind the curve of what was happening in the globalised context of current trade. Parts of manufactures could cross borders several times on the way to final production, and the associated services might often be more valuable than the manufactured objects themselves. Our current categorisations, which concentrated on a snapshot of the point of final manufacture, were probably largely missing the point.

In discussion, several members of the audience queried the likelihood of the US Administration being granted Trade Promotion Authority (TPA). The Ambassador reaffirmed his optimism. Despite recent shenanigans in Congress, all sides understood the importance of opening up transatlantic trade for jobs and growth, at local as well as national level. In response to questions from Bernard Jenkin and Caroline Spelman about the statistical basis of the negotiations, and the possibility of mutual recognition of standards and regulations, as opposed to harmonisation, Sr. Bercero and Mr Donnelly confirmed that mutual recognition would often be the preferred approach. The trick would be to set in place methods which could be used effectively over time to bring regulatory regimes together, rather than trying to agree everything at once. 

Lord Mandelson said he would have much preferred progress in the multilateral forum of the WTO, not least because that would have been better for the emerging economies. But since it was clear that this was not going to happen for the time being, it was reasonable to pursue what could be done bilaterally. He agreed that we should not try to fix everything straightaway, but create systems which would facilitate progress in the future. Good use of emotional intelligence in the negotiations would be vital. London and Berlin would have to work particularly hard politically to bring along others more sceptical on the European side, and Congress would also need a lot of persuasion to give the USTR enough negotiating space.

Mr Alexander agreed that a successful Doha Round would have been better. But TTIP and the Trans-Pacific Partnership (TPP) could draw in others in the future. We should certainly not give up on wider rounds. He also agreed on the importance of emotional intelligence in the negotiations. The key point would be to avoid cheap populism.  Mr Donnelly added that, if a deal could be done on trade facilitation at the Bali ministerial in December, this would show that the Doha process was not completely moribund. Meanwhile it was vital that the EU and US continued to respect the WTO dispute resolution system, and that major players continued to respect the global rules.

Lord McNally raised concerns that the regulators would create new barriers to trade by putting in place measures relating to data protection. It was reasonable to worry about data protection in an age of big data and data mining, but care was needed not to restrict international competition unnecessarily. The Ambassador agreed that this was an area to be watched carefully, but this was not easy when the scene was changing so fast. Sr Bercero said that the data sector was crucial. He understood the concerns raised by Lord McNally but protection of privacy was also very important, as recent revelations over NSA/GCHQ electronic surveillance had revealed. He hoped US reactions to these would help avert any threat to the TTIP negotiations.

Lord Hurd asked about the prospects of ratification of any TTIP deal, particularly in the US Congress. Lord Tugendhat wondered about the real prospects for TTIP in areas like agriculture if it had proved impossible to reach agreement on even a limited problem like hormones in beef. The Ambassador repeated his confidence that Congress would not be a problem in the end. The US wanted this agreement just as much as the EU. Sr Bercero said that in areas like agriculture, the best should not become the enemy of the good. There was not likely to be agreement on the hormone issue because views on both sides were very entrenched. But the EU/Canada agreement had shown how the issue could be at least partially defused by the EU allowing in bigger quotas of hormone-free beef. On the US Congress point, what concerned him was the simultaneous need for Trade Promotion Authority for the TPP negotiations, as well as for TTIP. The latter could get caught up with the former, since the TPP was likely to be even more sensitive domestically.

Mr Donnelly commented in conclusion that TTIP would only succeed if there were detailed political agreement on the issues on both sides of the Atlantic. Parliaments therefore had a huge role to play – hence the importance of discussions like the present one.