On the day that the European Parliament finally approves the Transatlantic Trade and Investment Partnership (TTIP) – the largest Trade Agreement in the history of the world – Sajjad writes for British Influence.
The European Union and the United States are each other’s main trading partners and enjoy the largest bilateral trade relationship in the world. In 2008 EU/US combined economies accounted for nearly 60 % of global GDP, approximately 33% of world trade in goods and 42% of world trade in services. Both partners make up for more than half of Foreign Direct Investment in each other’s economy.
However, for all its value and importance, the EU-US trading relationship still suffers from numerous obstacles, for example, export tariffs, which prevent it reaching its full potential to provide growth and jobs.
The European Commission estimates that a comprehensive deal with the US would benefit the EU to the tune of €120bn, which translates on average to an extra €545 (£433) in disposable income each year for a family of four in the EU. This is the best value stimulus that Europe can afford. For the UK especially, exports could increase by over £400million.
In June 2013, the Council adopted the mandate for the Commission to start negotiations with the US on a Transatlantic Trade and Investment Partnership Agreement (TTIP). According to the Lisbon Treaty, the European Parliament’s consent is required in order for TTIP to enter into force.
But there have been a number of stumbling blocks in TTIP’s path through the Parliament, in particular the Investor-State Dispute Settlement (ISDS). It allows for investors to take governments to international arbitration tribunals rather than to domestic courts, which some worry gives too much power to corporations.
It appears now though that this obstacle to the historic trade agreement will be overcome, with the parties in dispute – namely the Socialists & Democrats (S&D) Group – coming to an agreement between themselves.
The President of the European Parliament, Martin Schulz, had to personally intervene so that the S&D could deliver on the most public display of keeping the so-called Grand Coalition on track, which now appears to be fraying at the seams a little.
The key part of this ISDS compromise amendment though is that there is a clear recognition from the Parliament that investment protection mechanisms require the reform that we are all looking for; greater transparency, the right to appeal and accountability for arbitrators in the form of a code of conduct, amongst other reforms.
However, the Parliament has been clear that ISDS itself is not being rejected. If the Parliament is able to vote this through tomorrow, it will allow the Commission to push ahead with negotiations on an investment chapter in TTIP, giving us a stronger hand in negotiations as a whole, where we can push forward in areas such as opening up US procurement markets.
On the US side, it is of course welcome news that their Trade Promotion Authority is on the move again. The Commission hopes to have a skeleton agreement in place by the end of the year and hopefully this vote will allow the US to push ahead with the same enthusiasm.
TTIP has the potential to benefit not just UK citizens, but people across the whole of Europe. It is a once in a lifetime opportunity that should not be squandered and we would be wise to seize it now while we still can.
This afternoon in the European Parliament’s Plenary Session in Strasbourg, MEPs voted to approve this historic trade deal.