Introduction

On January 7 2015 the European Commission responded to public criticism about a perceived lack of transparency in negotiations between the European Union and the United States for the Transatlantic Trade and Investment Partnership (TTIP) by publishing a number of proposals on its website. In total, the commission published eight proposals brought forward in earlier TTIP negotiating rounds, along with 23 factsheets and three position papers.(1)

Subsidy and dispute settlement proposals

Whereas many documents generally reinstate the European Union's goals and objectives in the TTIP negotiations without disclosing much technical detail, information relating to state-owned enterprises, subsidies and dispute settlement reveal the European Union's desire to use the TTIP negotiations to set new standards that go beyond World Trade Organisation (WTO) disciplines.

In respect of state-owned enterprises, the European Union seeks to impose certain substantive and transparency requirements not present in WTO agreements. The European Union's objective appears to develop a joint platform of state-owned enterprise-related disciplines, which can be used in subsequent international trade agreements and forums to address state capitalism concerns. According to the European Union, it is important:

"to develop ambitious common rules to discipline the harmful effects of [state-owned enterprises] stemming from undue advantages which would contribute to creating and maintaining a level playing field between public and private market participants."

The European Union proposes to prohibit certain subsidies beyond those caught in the WTO Agreement on Subsidies and Countervailing Measures, including "subsidies granted to insolvent or ailing companies without a credible restructuring plan". The European Union has noted that this form of subsidisation belongs to some of "the most harmful types of subsidies and have the potential to have an adverse effect on trade and investment relations". If the European Union proposals are adopted, they could directly influence ongoing or future trade negotiations on subsidy disciplines.

Finally, in respect of dispute settlement, the European Union proposes an arbitration mechanism for the settlement of government-to-government dispute under the TTIP. This could be a significant change to using the WTO dispute settlement procedure in which, since 1995, the European Union and the United States have initiated 67 cases against one another.

Comment

The release of negotiating information by both the European Union and the United States signals their desire to respond to public demand for more transparency and limit the leakage of confidential negotiating positions.

Some of the proposals circulated evidence on intent to depart from disciplines and institutional arrangements negotiated in bilateral and plurilateral trade agreements since the establishment of WTO agreements in 1995. These proposals are key to businesses operating on both sides of the Atlantic, as well as to companies and governments situated in other parts of the world, as the latter may be indirectly influenced in future trade negotiations by the rules crafted in TTIP negotiations.

The eighth round of TTIP negotiations will take place between February 2 and February 6 2015.

Charles Julien

Marcus Sohlberg

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