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Fourth T-TIP Rounds Scheduled For March in Brussels

The fourth round of Transatlantic Trade and Investment Partnership (T-TIP) will be held in Brussels, beginning March 10. In preparation for the discussions, E.U. Trade Commissioner Karel de Gucht and U.S. Trade Representative Michael Froman will meet in Washington, D.C. on February 17th to clarify the upcoming agenda.

T-TIP negotiations officially began in July 2013. It has largely been negotiated quietly, avoiding the same journalistic scrutiny lavished upon the Trans-Atlantic Pacific Partnership or Pacific Alliance. Nevertheless, the TTIP negotiations have been gaining ground and, if successfully settled, could have wide-ranging consequences, allowing the U.S. and the E.U. to set common rules between them on emerging trade issues like regulatory standards and regional cooperation.

However, the discussions recently attracted attention over the insertion of an investor-state resolution clause, that permit E.U. and U.S.-based corporations to forward legal challenges directly against sovereign governments to various international tribunals. This would allow those corporations to litigate national restrictions regarding public health, environmental protection and social compliance that potentially places undue constraints on their ability to conduct business.

Karel de Gucht said the postponement of the investor-state negotiations is intended to ensure that European corporations have adequate recourse to pursue grievances while also protecting the prerogative of governments to establish their own laws independent of external interference. “I know some people in Europe have genuine concerns about this part of the EU-US deal. Governments must always be free to regulate so they can protect people and the environment. But they must also find the right balance and treat investors fairly, so they can attract investment,” said de Gucht.

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Karel de Gucht also acknowledged that investor-state clauses have led to difficulties in past free trade arrangements. “International investment agreements like TTIP should ensure they do both. But some existing arrangements have caused problems in practice, allowing companies to exploit loopholes where the legal text has been vague,” he said.

The controversy over investor-state resolution has awakened many to historic ramifications of T-TIP. Acknowledging the potential significance of the TTIP, the American Apparel & Footwear Association (AAFA) recently weighed in on the treaty’s provisions, endorsing its central goal of removing gratuitous obstacles to free trade between the E.U. and the U.S. Stephen Lamar, Executive Vice President of the AAFA, recently wrote:

“AAFA strongly supports negotiation of a high standard comprehensive trade agreement with the European Union (EU) that actually reduces barriers to trade and investment between Europe and the United States. Europe is an important partner of the U.S. apparel and footwear industry. Not only is Europe a top market, but it is also a source of key fabrics and other inputs that are used in the production of apparel in the United States and around the world by top American brands. Strong US-EU synergies exist throughout the supply chains as designers, compliance experts, and logistics professionals from both continents routinely collaborate to bring today’s fashions into homes in the United States, Europe, and throughout the world.”

The primary objective for the fourth round of T-TIP negotiations is to review the progress made in the first three rounds and to prepare each nation’s chief negotiators’ with revised agendas. The stakes for the negotiations are high since the E.U. and U.S. collectively comprise more than 40 percent of global economic output. According to a study issued by the Center for Economic Policy Research, the E.U. could capture an additional $161 billion a year from a fully implemented free trade agreement, mostly on the strength of an anticipated 28 percent rise in exports to the U.S.  More than 80 percent of the overall gain for both sides will result from deep cost-cutting, particularly with the removal of regulatory trade barriers, and the liberalization of trade in services and public procurement.