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Last month, representatives of the United States and the European Commission met in Miami, Florida for the 11th round of negotiations for the Transatlantic Trade and Investment Partnership (TTIP) free trade agreement between the U.S. and the European Union.
Discussions at the 11th round centered on the exchange of revised market access offers, which would mutually eliminate 97% of all tariffs on both sides, with duties going to zero for most lines immediately upon the entry into force of the agreement. This should help “reset” the conversation, moving past the European’s frustration with the lack of ambition in the original U.S. offer.
Other key issues discussed in Miami included: customs and trade facilitation, the small and medium-sized enterprise (SME) chapter, and regulatory cooperation across important industries and sectors.
Overall, the atmosphere in Miami was decidedly more upbeat than previous rounds. Negotiators clearly see the outlines of a deal in several areas, and they profess to understand that it’s time to take some difficult decisions in more sensitive areas. There was plenty of speculation about whether “a deal” could be “done” before President Obama leaves office. Suffice it to say that there was strong consensus that, absent a significant push, there is a real risk the talks could drag on much longer than that.
With that in mind, the message from the U.S. Chamber of Commerce—during the stakeholders’ forum and throughout the week—was simple: it’s time to pick up the pace. The reasons these talks were launched are more relevant than ever; yet more than two years into the negotiations, repeated expressions of political support have not thus far translated into visible and tangible progress at the negotiating table. We urged both parties to move beyond traditional negotiating tactics and jointly taking the bold steps needed to secure a world class trade agreement.
In Miami, we also presented a joint paper on customs and trade facilitation written with BusinessEurope with negotiators, outlining the transatlantic business community’s ideas on how to maximize the effectiveness of the agreement to facilitate goods trade across borders. We had a good conversation about how the U.S. and EU can jointly set standards in developing an electronic “single window” for customs approvals, updating and integrating trusted trader programs, and the need to raise de minimis duty-free limits on both sides of the Atlantic to promote SME trade and e-commerce to benefit consumers.
SMEs stand to be among the greatest beneficiaries from a streamlined transatlantic trading system, especially given the advances in e-commerce. With that in mind, the two sides have decided to include an SME-specific chapter to ensure SMEs can take full advantage of the agreement. U.S. priorities include developing a single window for customs information, raising de minimis duty-free levels to $800 or above to boost e-commerce, and harmonizing customs forms and approvals. The two sides are working on how to (and whether to) develop and online information portal with specific tariff and regulatory information for SMEs to consult, or if the private sector is better suited to provide this service.
The generally positive mood around the talks stood in stark contrast to the uncertainty stemming from the Commission’s ill-conceived investment protection reform proposals as well as the European Court of Justice’s recent decision to invalidate Safe Harbor. Both of these issues will need to be resolved in a mutually acceptable way if the negotiations are to have a chance of success.
The 12th round of talks currently is expected in late January – early February in Brussels. The next round is expected to take place in the United States a few months thereafter (we suggested Cherry Blossom season would be ideal).