Abstract
Horst-Günter Krenzler conducted and steered trade negotiations on behalf of the EU for a long time. After his resignation from the European Commission, he continued to be closely involved in matters concerning the Union’s common commercial (trade) policy, both as a professional and academic, until his untimely death. There is no doubt that he would have been intrigued by the ongoing attempt of the EU and the US to build a more integrated “transatlantic marketplace” by concluding a transatlantic free trade agreement (hereinafter FTA). With this in mind, the following observations will address the current negotiations between these two global (trade) players and focus specifically on the regulatory aspects of these negotiations.
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Notes
- 1.
Statement by former EU Trade Commissioner Karel De Gucht on the Transatlantic Trade and Investment Partnership (TTIP) ahead of the second round of negotiations, 30 September 2013, p. 1, available at: http://ec.europa.eu/trade/policy/in-focus/ttip/.
- 2.
In its announcement of launching trade negotiations with the US, the European Commission stressed that TTIP “will aim to go beyond the classic approach of removing tariffs and opening markets on investment, services and public procurement. In addition, it will focus on aligning rules and technical product standards which currently form the most important barrier to transatlantic trade.” Further, the European Commission pointed out that “the most significant trade barrier is not the tariff paid at the customs, but so-called ‘behind-the-border’ obstacles to trade.” European Commission, press release MEMO/13/95, European Union and United States to launch negotiations for a Transatlantic Trade and Investment Partnership, 13 February 2013, pp. 1–2, available at: http://europa.eu/rapid/press-release_MEMO-13-95_en.htm. The EU’s chief negotiator, Bercero, stated at the end of the sixth negotiating round in July 2014 that the regulatory agenda “is considered to be the most economically significant part of TTIP and what makes TTIP different from the other trade agreements.” European Commission (Trade), press release, EU–US trade—latest round of talks on transatlantic trade pact ends in Brussels, 18 July 2014, available at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1132.
- 3.
European Commission, press release MEMO/13/95, European Union and United States to launch negotiations for a Transatlantic Trade and Investment Partnership, 13 February 2013, pp. 1–2, available at: http://europa.eu/rapid/press-release_MEMO-13-95_en.htm. The Council adopted a decision on the negotiating directives for the Commission on 14 June 2013; see European Commission, press release MEMO/13/564, Member States endorse EU–US trade and investment negotiations, 14 June 2013, available at: http://europa.eu/rapid/press-release_MEMO-13-564_en.htm.
- 4.
Biden (2014), p. 9 (“The two agreements now in the works would place the US at the centre of two vast trading regions”).
- 5.
- 6.
In spite of the modest success of the ninth WTO Ministerial Conference held in Bali in December 2013, which agreed on a Trade Facilitation Agreement and certain measures in the areas of agriculture as well as special and differential treatment of LDCs (see the overview on the WTO website, available at: http://www.wto.org/english/thewto_e/minist_e/mc9_e/balipackage_e.htm), the core elements of the Doha Round—market access in agriculture, nonagricultural goods and services—still awaits its conclusion (see the statement of WTO Director-General Azevêdo to the General Council, WTO, news, Azevêdo reports “excellent start” on efforts to put Doha Round back on track, 14 March 2014, available at: http://www.wto.org/english/news_e/news14_e/gc_rpt_14mar14_e.htm). The momentary inability of WTO members to adopt the protocol on the application of the Trade Facilitation Agreement had cast a new shadow on their willingness to revive the dormant Doha Round and even threatened the proper functioning of the multilateral trading system, according to WTO Director-General Azevêdo; see his statement at the informal meeting of the Trade Negotiations Committee, WTO news (2014).
- 7.
Former EU Trade Commissioner De Gucht stressed that “good multilateral rules on these kind of issues take a lot more time to achieve, if at all, because they are complicated. Working bilaterally within the TTIP to begin with is therefore much easier than working with the 159 members of the WTO.” European Commission, press release SPEECH/24/357, De Gucht (2014d), p. 3.
- 8.
- 9.
High-Level Working Group on Jobs and Growth, Final report, 11 February 2013, p. 6, available at: http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf.
- 10.
European Commission (2013b), pp. 6–7. See also European Commission, press release MEMO/13/211, Independent study outlines benefits of EU–US trade agreement, 13 February 2013, available at: http://europa.eu/rapid/press-release_MEMO-13-211_de.htm.
- 11.
European Commission (2013b), p. 6. In its communication “Global Europe: Competing in the World,” the European Commission had already emphasised that “the economic gains from tackling non-traditional, behind-the-border barriers are potentially significant in the EU and US,” p. 10, COM(2006) 567 final. In the same vein, the Commission’s communication “Trade, Growth and World Affairs” states with respect to the trade relationship with the US that “the biggest remaining obstacles lie in the divergence of standards and regulations across the Atlantic, even though we have very similar regulatory aims,” p. 11, COM(2010) 612 final. See also ECORYS (2009) for an overview of NTBs in various sectors of economic activity and the possible effects of their reduction.
- 12.
On average, EU tariffs amount to 5.2 % and US tariffs amount to 3.5 % (see European Commission, press release MEMO/13/95, European Union and United States to launch negotiations for a Transatlantic Trade and Investment Partnership, 13 February 2013, p. 2, available at: http://europa.eu/rapid/press-release_MEMO-13-95_en.htm). Interestingly, the final report of the High-Level Working Group on Jobs and Growth notes that “both sides should consider options for the treatment of the most sensitive products,” High-Level Working Group on Jobs and Growth, Final report, 11 February 2013, p. 3, available at: http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf, which presumably means that the planned removal of customs duties will not cover 100 % of bilateral trade.
- 13.
“The goal of this trade deal is to reduce unnecessary costs and delays for companies, while maintaining high levels of health, safety, consumer and environmental protection”; see European Commission, press release MEMO/13/95, European Union and United States to launch negotiations for a Transatlantic Trade and Investment Partnership, 13 February 2013, p. 2, available at: http://europa.eu/rapid/press-release_MEMO-13-95_en.htm. In his press statement following the political stocktaking meeting with USTR Froman, former EU Trade Commissioner De Gucht stressed: “What we aim to achieve in TTIP is that these regulatory agencies coordinate more closely with each other,” European Commission, Statement/14/12, “Stepping up a gear”: Press Statement by EU Trade Commissioner Karel De Gucht following the stocktaking meeting with USTR Michael Froman on the Transatlantic Trade and Investment Partnership (TTIP), 18 February 2014, p. 2, available at: http://trade.ec.europa.eu/doclib/docs/2014/february/tradoc_152198.pdf. See also European Commission (Trade) (2014), p. 1.
- 14.
See Financial Times (2013a), p. 2; Financial Times (2014b), p. 6; Financial Times (2014a); Donnan (2014b), p. 3; Kafsack (2014a), p. 9; Caldwell (2014), p. 9. A similar concern is voiced with respect to the TTIP chapter on investment protection, in particular as regards its investor-State arbitration provisions, in that firms from the other party would avail themselves of the investor-state arbitration mechanism against regulatory measures, e.g. in the environmental area, that may have a negative impact on their businesses; see Frankfurter Allgemeine Zeitung (2013), p. 19; ICTSD (2014), p. 4.
- 15.
- 16.
European Commission (2010), pp. 1 and 3–5. The EU–South Korea FTA is “the first of the new generation of FTAs launched in 2007 as part of the ‘Global Europe’ initiative” and “the most comprehensive free trade agreement ever negotiated by the EU,” id., p. 1. The Commission stated that the EU–South Korea FTA “will inform our approach for further FTAs under negotiation,” Commission, Staff Working Document, External sources of growth, 2012, p. 12, available at: http://trade.ec.europa.eu/doclib/docs/2012/july/tradoc_149807.pdf.
- 17.
European Commission (Trade) (2013), pp. 4–6. Contrary to the EU–South Korea FTA, the FTA with Singapore has not entered into force yet but is expected to become effective by late 2014; European Commission, press release MEMO/13/1080, The EU’s bilateral trade and investment agreements—where are we?, p. 4, available at: http://europa.eu/rapid/press-release_MEMO-13-1080_en.htm.
- 18.
- 19.
European Commission, press release MEMO/13/95, European Union and United States to launch negotiations for a Transatlantic Trade and Investment Partnership, 13 February 2013, p. 1, available at: http://europa.eu/rapid/press-release_MEMO-13-95_en.htm. Together, the EU and the US account for 46 % of world GDP; see European Commission (2013b), p. 10.
- 20.
- 21.
- 22.
- 23.
European Commission, EU–US Transatlantic Trade and Investment Partnership – Technical barriers to trade, Initial EU position paper, p. 5, available at: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151627.pdf.
- 24.
European Commission, Transatlantic Trade and Investment Partnership – The Regulatory Part, p. 2, available at: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151605.pdf. As was candidly pointed out by De Gucht, “many of the technical solutions will be able to be applied more widely, especially as they will already be operating in 40% of the world economy,” European Commission, press release SPEECH/14/141, De Gucht, p. 5. De Gucht reiterated this stance in a speech in Berlin on 5 May 2014: “And if the agreement covers 40% of the world economy, that will be a basis for future work with a wider set of partners.” European Commission, press release SPEECH/24/357, De Gucht (2014d), p. 3.
- 25.
European Commission, press release SPEECH/13/801, De Gucht (2013), p. 6. In a recent speech in Paris, De Gucht pointed out that “the third way people would benefit from regulatory cooperation is because whatever we do together would provide an excellent basis for future global efforts towards regulatory coherence.” European Commission, press release SPEECH/14/314, De Gucht (2014a), p. 5.
- 26.
European Commission, Press release at the occasion of the conclusion of the third round of negotiations, 20 December 2013. De Gucht stressed that common approaches of the EU and the US “may shape regulation around the world, including in countries like Brazil, India, China and Russia, where today standards are typically much lower than in the US and the EU,” European Commission, press release SPEECH/14/52, De Gucht (2014c), pp. 6–7. See also European Commission (Trade) (2014), p. 3.
- 27.
European Commission, Statement/14/11, 17 February 2014, p. 1. In a similar vein, De Gucht stated: “This means that TTIP will be an important way for us to shape regulations, norms, including on investment, and ultimately values that govern economic exchange worldwide,” European Commission, press release SPEECH/14/405, De Gucht, p. 2; similarly Malmström (2014b), p. 3.
- 28.
High-Level Working Group on Jobs and Growth, Final report, 11 February 2013, p. 4, available at: http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf.
- 29.
European Commission, Transatlantic Trade and Investment Partnership – The Regulatory Part, pp. 3–4, available at: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151605.pdf; European Commission, EU–US Transatlantic Trade and Investment Partnership. Trade Cross-cutting disciplines and Institutional provisions. Initial EU position paper, p. 3, available at: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151622.pdf. See also European Commission, press release SPEECH/13/801, De Gucht (2013), pp. 4–5; European Commission, press release SPEECH/14/406, De Gucht (2014b), p. 3; Malmström (2014c), pp. 2–3. The EU’s chief negotiator, Bercero, underlined at the end of the sixth negotiating round that “enhanced regulatory cooperation is essential if the EU and the US wish to play a leading role in the development of international regulations and standards based on the highest levels of protection.” European Commission (Trade), press release, EU–US trade—latest round of talks on transatlantic trade pact ends in Brussels, 18 July 2014, available at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1132.
- 30.
- 31.
High-Level Working Group on Jobs and Growth, Final report, 11 February 2013, p. 4, available at: http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf. On the use of harmonisation, equivalence, and mutual recognition in bilateral and regional FTAs as a means to achieve regulatory coherence as well as the differences in the approaches pursued by the US and the EU, see Lesser (2007), paras. 27 et seq., paras. 43–44 and 51–53; see also WTO (2011), pp. 140–141.
- 32.
OECD (2012).
- 33.
OECD (2012), recommendation no 10.
- 34.
European Commission, EU–US Transatlantic Trade and Investment Partnership – Technical barriers to trade, Initial EU position paper, p. 5, available at: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151627.pdf; European Commission (Trade) (2014), p. 1.
- 35.
European Commission, EU–US Transatlantic Trade and Investment Partnership. Trade Cross-cutting disciplines and Institutional provisions. Initial EU position paper, p. 2, available at: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151622.pdf.
- 36.
European Commission (2013b), p. 10.
- 37.
It has been noted that the “development of international standards is, by definition, a form of multilateral cooperation,” WTO (2012), p. 179.
- 38.
The abovementioned recommendations of the OECD Regulatory Policy Committee include a recommendation to give consideration to all relevant international standards, OECD (2012), recommendation no 12.
- 39.
It must be noted, though, that the linkage between regulatory action and international standards is often very difficult to establish because of a lack of transparency, i.e. there is a lack of information that would allow to identify, for a given sector, whether and to which extent international standards form the basis for regulatory action; see Fliess et al. (2010), paras. 74–75 and 76 et seq. As regards services, the problem is compounded by the fact that international standards are much less prevalent as compared to goods, WTO (2012), p. 185.
- 40.
European Commission (2013b), p. 10.
- 41.
Notwithstanding the fact that both provisions also set out requirements regarding the impact of an FTA on the trade with other WTO members not parties to the FTA in question.
- 42.
The Appellate Body observed that “the TBT Agreement does not contain among its provisions a general exceptions clause. This may be contrasted with the GATT 1994, which contains a general exceptions clause in Article XX.” WTO, report of the Appellate Body, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, para. 101. Referring to this ruling, the Appellate Body later stated that “Article XX of the GATT 1994 has been found by the Appellate Body not to be available to justify a breach of the Agreement on Technical Barriers to Trade (TBT Agreement).” WTO, report of the Appellate Body, China – Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum, WT/DS431/AB/R, WT/DS432/AB/R, WT/DS433/AB/R, para. 5.56. The same conclusion applies, mutatis mutandis, to Article XXIV GATT 1994.
- 43.
Article V GATS allows the conclusion of economic integration agreements by WTO members if two conditions are met: such agreements must have substantial sectoral coverage and provide for the absence or elimination of substantially all discrimination, in the sense of Article XVII. However, Articles VI and VII GATS relate to domestic regulation and recognition, which are both distinct from national treatment in the sense of Article XVII GATS. See also Marchetti and Mavroidis (2012), p. 415 (426–427), who argue that recognition is not necessary for the establishment of a PTA.
- 44.
In this way, international standards can play a crucial role in the process of achieving regulatory alignment on a global scale, Wijkström and McDaniels, para. 2.1.
- 45.
The provisions of the Agreement on Technical Barriers to Trade (TBT Agreement), 1868 U.N.T.S. 120 regarding central government bodies apply to the EU, as per the explanatory note to paragraph 6 of Annex 1 to the TBT Agreement.
- 46.
Article 2.4 TBT Agreement.
- 47.
Article 2.6 TBT Agreement.
- 48.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 354.
- 49.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 356 (emphasis in the original).
- 50.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 359.
- 51.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 363.
- 52.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 364.
- 53.
WTO, Committee on Technical Barriers to Trade, Decisions and recommendations adopted by the WTO Committee on Technical Barriers to Trade since 1 January 1995, Note by the Secretariat, G/TBT/1/Rev. 11 (16 December 2013).
- 54.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 372.
- 55.
The observance of these principles has been a prominent feature in the discussions of WTO members within the TBT Committee. Following the last triennial review of the TBT Agreement by the TBT Committee, it is likely that WTO members will focus on how standardising bodies implement these six principles in their standard-setting practice, Wijkström and McDaniels, para. 3.16.
- 56.
Wijkström and McDaniels, para. 374.
- 57.
Wijkström and McDaniels, para. 375.
- 58.
By codifying scientific and technical knowledge developed at the global level, the use of international standards in technical regulations may help to generate economies of scale and production efficiencies, reduce transaction costs, and facilitate international trade, thereby contributing to regulatory convergence; see WTO (2014), p. 22.
- 59.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, para. 245.
- 60.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, paras. 243–244.
- 61.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, paras. 229–232.
- 62.
By way of example, Article 2.4 TBT Agreement mentions three situations where an international standard could be ineffective or inappropriate, namely because of fundamental climatic or geographical factors or fundamental technological problems. These examples provide an indication as to the meaning of “ineffective” and “inappropriate,” respectively.
- 63.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, para. 285.
- 64.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, para. 288.
- 65.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, para. 287.
- 66.
WTO (2014), p. 21.
- 67.
See Wijkström and McDaniels, para. 2.5.
- 68.
WTO, Committee on Technical Barriers to Trade, Decisions and recommendations adopted by the WTO Committee on Technical Barriers to Trade since 1 January 1995, Note by the Secretariat, G/TBT/1/Rev. 11 (16 December 2013), para. 10 (principle of effectiveness and relevance).
- 69.
Article 2.2 TBT Agreement explicitly mentions, albeit only by way of example, a number of legitimate objectives: national security requirements, the prevention of deceptive practices, protection of human health or safety, animal or plant life or health, or the environment.
- 70.
The presumption does not arise if the legitimate objective pursued by the technical regulation in question is not “explicitly” mentioned in Article 2.2 TBT Agreement in spite of the fact that policy objectives other than those explicitly listed in Article 2.2 TBT Agreement may be legitimate in terms of that provision; see WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 313; WTO, report of the Appellate Body, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R, WT/DS386/AB/R, para. 370.
- 71.
WTO, report of the Appellate Body, European Communities – Trade Description of Sardines, WT/DS231/AB/R, paras. 248 and 250.
- 72.
WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, para. 348.
- 73.
On Article 2.2 TBT Agreement and its conditions see WTO, report of the Appellate Body, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, paras. 311–323, and WTO, report of the Appellate Body, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R, WT/DS386/AB/R, paras. 369–379.
- 74.
Wijkström and McDaniels, para. 2.2.
- 75.
WTO (2014), p. 22.
- 76.
This state of affairs may create a risk of capture or bias in international standard-setting activities, Wijkström and McDaniels, para. 4.4.
- 77.
The General Agreement on Trade in Services, 1869 U.N.T.S. 183 (GATS), disciplines that hinge on specific commitments are commonly referred to as “conditional” obligations whereas disciplines that apply irrespective of specific commitments are commonly referred to as “unconditional” obligations; see Adlung and Mattoo (2008), p. 48 (63 and 66).
- 78.
Article VI:5(b) GATS.
- 79.
Article VII:5 GATS.
- 80.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 20.
- 81.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 38.
- 82.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 30.
- 83.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 44. See also WTO (2012), p. 185.
- 84.
Footnote 3 to Article VI:5(b) GATS. This definition is identical to the definition of the notion “international body or system” in para. 4 of Annex 1 to the TBT Agreement.
- 85.
See supra "International Standard Within the Meaning of the TBT Agreement" on the principle of openness in the context of the TBT Agreement and the conclusions derived by the Appellate Body on the basis of this principle.
- 86.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), paras. 49–50.
- 87.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 26.
- 88.
A measure means any measure by a member, whether in the form of a law, regulation, procedure, decision, administrative action, or any other form, pursuant to Article XXVIII(a) GATS.
- 89.
See WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 15.
- 90.
On the state of play in these negotiations, see WTO, Working Party in Domestic Regulation, Disciplines on Domestic Regulation Pursuant to GATS Article VI:4, Chairman’s Progress Report, S/WPDR/W/45 (14 April 2011).
- 91.
- 92.
Krajewski (2003), p. 152.
- 93.
This does not amount to a (rebuttable) presumption; see WTO, Council for Trade in Services, Article VI:4 of the GATS: Disciplines on Domestic Regulation Applicable to all Services, Note by the Secretariat, S/C/W/96 (1 March 1999), para. 35.
- 94.
Marchetti and Mavroidis (2012), p. 415 (421).
- 95.
Article VII:5, first sentence, GATS.
- 96.
Marchetti and Mavroidis (2012), p. 415 (422).
- 97.
Krajewski (2008), para. 12.
- 98.
Krajewski (2008).
- 99.
Krajewski (2008).
- 100.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 86(e).
- 101.
WTO, Working Party on Domestic Regulation, Technical Standards in Services, Note by the Secretariat, S/WPDR/W/49 (13 September 2012), para. 86(c).
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Pitschas, C. (2015). Transatlantic Trade and Investment Partnership Agreement and the Development of International Standards. In: Herrmann, C., Krajewski, M., Terhechte, J. (eds) European Yearbook of International Economic Law 2015. European Yearbook of International Economic Law, vol 6. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-46748-0_7
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