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The EU-US Transatlantic Trade and Investment Partnership (TTIP)

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This presentation offers a cursory overview of the TTIP currently under negotiation by the USA and EU. The aim of the presentation is to stimulate discussion on the relevance of the proposed partnership to South Africa and African regional integration with an emphasis on agriculture.

Published in: Investor Relations
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The EU-US Transatlantic Trade and Investment Partnership (TTIP)

  1. 1. 18 March 2016 Presented by: Stephanie van der Walt
  2. 2. Introduciton • TTIP is a trade agreement that is currently being negotiated between the United States and the European Union. • Partnership – designed to reduce barriers to trade between the two.
  3. 3. Whatcountriesareinvolvedwith TTIP? High Level Working Group TTIP United States Trade Representative Ambassador Michael Froman
  4. 4. Support for the TTIP
  5. 5. Scepticism
  6. 6. Timeframe 2013 Round 1: Washington, D.C. - July 8-12, 2013 Round 2: Brussels, Belgium - November 11-15, 2013 Round 3: Washington, D.C. - December 16-20, 2013 2014 Round 4: Brussels, Belgium - March 10-14, 2014 Round 5: Arlington, Virginia - May 19 - 23, 2014 Round 6: Brussels, Belgium - July 14 - 18, 2014 Round 7: Chevy Chase, Maryland - September 29 - October 3, 2014 2015 Round 8: Brussels, Belgium - February 2 - 6, 2015 Round 9: New York, NY - April 20 - 24, 2015 Round 10: Brussels, Belgium - July 13 - 17, 2015 Round 11: Miami, Florida - October 19 - 23, 2015
  7. 7. TTIP is being hailed as one of the largest trade agreements in history . What kinds of number are we talking about? • World's largest trade market • 50% of world GDP and 30% of world trade • €1.8 billion/day and €723 billion/year of goods and services traded • 15 million transatlantic jobs • €2,4 trillion of mutual investment stocks
  8. 8. What exactly would TTIP do? • eliminate all trade tariffs and reduce non-tariff barriers • Tariffs between the U.S. and EU are already lower than an average of 4 percent • Non-tariff barriers is a main focus of the negotiations • Want to expand market access for trade in services • Industries got benefit from non-tariff barriers to market access.
  9. 9. TTIP Objectives The main goal of TTIP is to remove regulatory ‘barriers’: • labour rights, • food safety rules, • the use of toxic chemicals, • digital privacy laws • new banking safeguards(to prevent a repeat of 2008 financial crisis)
  10. 10. Projected Benefits US and EU Market integration, harmonization of standard • Estimated gains for the EU (€120 billion) and the US (€95 billion),once fully implemented. • EU exports to the US would go up by 28%, (€187 billion worth of exports of EU goods and services). EU imports from the US would increase by €159 billion. • Estimated millions of Euros of savings, hundreds of thousands of jobs created. • Higher national income. • Boost trade by creating increased demand and supply without having to increase public spending or borrowing. Rest of the World • Decrease value added in production. • More difficult to access to EU- US market with mandatory standards and rules of origin. • Developing-country firms are hurt more by an increase in the stringency of standards and benefit less from economies of scale in integrated markets.
  11. 11. Pertinent Issues • ISSUE: The U.S. is seen as having stronger rules in financial services, thus there may be more regulation to lose than gain in trade talks, while Europe touts its rules as superior in food safety and other sectors.
  12. 12. Pertinent Issues • The EU is putting more pressure on the US to include financial regulation on the talks. • However, the US does not want to make any concessions. They refuses to reopen, weaken, or undermine implementation of the Dodd-Frank Act, which was introduced to tighten bank regulations after the 2008 crisis.
  13. 13. Pertinent Issues • The use of growth promoters in food production has been a highly contentious issue between the EU and U.S • In the U.S, protein and β-agonists are given to animals and some antibiotics put into water and feed to increase growth and feed efficiency. • In the EU, against the law and against the Code of Ethics for veterinarians, to give animals drugs for non-therapeutic purposes
  14. 14. Proposed Structure 24 chapters grouped in three pillars Market access • Goods, agriculture, services including e-commerce, public procurement, rules of origin Regulatory cooperation • Chapters on regulatory co-operation/coherence, TBT, SPS, and nine sectoral annexes (including one on pesticides) • Regulatory cooperation discussions are led by the regulators from the EU and the US. Rules • Sustainable development including labour and environment, trade facilitation, competition, energy, raw materials, state owned enterprises, subsidies, SMEs, investment protection, intellectual property protection, dispute settlement, among others
  15. 15. Agriculture
  16. 16. Tariff Negotiations • Second tariff offers now exchanged by both sides • Tariff outcomes should be at least as ambitious as in the CETA agreement (on the EU side) and the TPP agreement (on the US side) • Eliminating agricultural tariffs (or opening larger TRQs for sensitive products) would certainly be beneficial • However, all agree that the main action in these negotiations is around non-tariff measures (NTMs) including EU demand for recognition of particular Geographical Indications (GIs)
  17. 17. Difference in Regulatory Approaches • US and EU share basic mandate to achieve a high level of food safety and consumer protection • EU General Food Law 2002 • US Food Safety Modernisation Act 2011 • Both laws contain many similarities in approach… • ..but cultural, political and institutional differences between the US and EU continue to result in different perceptions of risk and thus different regulatory outcomes
  18. 18. High Profile SPS Issues • Beef hormones • Beta agonists e.g. ractopamine in pork • Biotechnology • Pathogen reduction treatments • US dairy standards (Grade A Pasteurised Milk Ordinance) • Proposed changes to EU pesticide regulations which would ban substances classified as endocrine disruptors and set default low MRLs • Antibiotics in animal feed • Cloning restrictions
  19. 19. References • http://europa.eu/about- eu/countries/member- countries/index_en.htm • http://ec.europa.eu/trade/policy/in- focus/ttip/about-ttip/ • http://www.faegrebd.com/20356 • http://www.waronwant.org/campaigns/trad e-justice/more/inform/18078-what-is-ttip

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