Introduction

The fifth round of Transatlantic Trade and Investment Partnership (the TTIP) negotiations between the European Union (the EU) and the United States (the US) took place in Arlington, Virginia, from 19 to 23 May 2014. The talks did not cover investor-to-state dispute settlement (ISDS), on which the European Commission (the Commission) held a stakeholder meeting in Brussels on 13 May 2014. The Commission published EU negotiating positions on five regulatory areas covered by the talks on 14 May 2014. The next round of negotiations is expected to be held in Brussels in July, although no official dates have been fixed yet.

Fifth round of talks

The fifth round of TTIP negotiations, which took place from 19 to 23 May 2014 in Arlington, Virginia, was the most extensive since the TTIP talks were launched in July 2013. As a result of the fifth round, both sides are working on the basis of a consolidated text on topics such as technical barriers to trade, competition, state-to-state dispute settlement and SMEs.

On 21 May 2014, the EU and US negotiators met with NGOs, consumer groups, trade unions, professional organisations, business and other civil society organisations to update them on the status of the negotiations and gather their views.

The EU's Chief Negotiator, Ignacio García Bercero, and his US counterpart, Dan Mullaney, reported that progress was made on trade rules, market access and regulations, in particular on the following issues:

  • With regard to trade rules, the talks focused on sustainable development, labor and the environment. The EU's Chief Negotiator, Mr García Bercero, predicted that the next round of negotiations will probably see both sides working on a consolidated text bringing together the EU and US proposals on these areas. In relation to energy and raw materials, negotiators continued to discuss rules and modes of cooperation; they have not reached agreement on whether to have a separate energy chapter.
  • With regard to market access, the EU and US reportedly exchanged market access offers on services, looked into the rules on government procurement and began to discuss the elements for any exchange of offers in relation to access to procurement markets.
  • In the area of regulations, negotiators, experts and regulators from both side covered (i) regulatory convergence and the notion of broad input of stakeholders in the regulatory process, impact assessment and standard-setting, as well as cooperation between EU and US regulators; (ii) ways to achieve greater regulatory compatibility in certain key industries: pharmaceuticals, cosmetics, medical devices, information communication technologies, automotive, pesticides and chemicals; and (iii) sanitary and phytosanitary (SPS) measures, where food safety remains one of the most sensitive issues.

Although investment was discussed during the talks, provisions on investor protection and ISDS were excluded from this round since negotiations on this issue have been suspended by the EU pending conclusion of the consultation launched in April (this subject is addressed further below).

Mr Mullaney confirmed that the US continued to oppose including financial services in the TTIP negotiations, although discussions continue on this area.

On 3 June 2014, the Commission will hold a third Civil Society Dialogue to discuss progress and to exchange views with business and consumer organisations and NGOs on the TTIP.

Reducing regulatory barriers to trade - Publication of negotiating positions

On 14 May 2014, the Commission published negotiating positions in five important areas of the negotiations, involving proposals for either enhancing regulatory compatibility between the current EU and US systems or coordinating the establishment of future rules and regulations in the following five sectors:

  • Chemicals
  • Cosmetics
  • Pharmaceutical products
  • Motor vehicles
  • Textiles and clothing

Each paper outlines options to (i) end the unnecessary duplication of product testing or manufacturing plant inspections; (ii) recognise existing regulations or bring them more closely together; and (iii) align authorisation or registration procedures for new products.

Currently, EU and US regulations on chemicals differ significantly. In this sector, neither harmonization nor mutual recognition is feasible. The following options have been foreseen instead: (i) cooperation in prioritising chemicals for assessment and assessment methodologies; (ii) promoting alignment in classification and labelling of chemicals; (iii) co-operation on new or emerging issues; and (iv) enhanced information sharing and protection of confidential business information.

In relation to cosmetics and pharmaceutical products, cooperation between both sides is already well established. In both sectors, the EU proposes introducing harmonisation and mutual recognition. With regard to cosmetics, the EU proposes working together to (i) recognise each other’s lists of permitted or banned substances; (ii) recognise each other’s Good Manufacturing Practices (GMPs); (iii) harmonize test methods and requirements; (iv) align labelling requirements; and (v) reinforce cooperation with the International Council on Cosmetics Regulation (ICCR). With regard to pharmaceuticals, the EU proposes (i) mutual recognition on GMP inspections of manufacturing plants; (ii) exchanging confidential and trade secret information between EU Member States/EU institutions and the US Food and Drug Administration (FDA); (iii) harmonising requirements for approving biosimilars; (iv) streamlining authorisation systems for generics; (v) harmonising terminology for pharmaceuticals; and (vi) establishing bilateral cooperation on joint assessment approaches.

EU and US technical requirements for motor vehicles differ significantly. In this area, the EU aims to achieve compatibility without lowering health, safety and environmental standards on either side. The paper on motor vehicles identifies two main objectives to achieve such a goal: (i) recognising each other’s existing standards and regulations; and (ii) strengthening EU-US cooperation in drawing up regulations in future, especially on new technologies. In addition, closer EU-US cooperation within the United Nations Economic Commission for Europe (UNECE) should lead to the adoption of global technical regulations.

Finally, with regard to textiles and clothing, the EU proposes to strengthen existing EU-US cooperation in three main areas: (i) labelling requirements for textile/clothing and footwear products; (ii) harmonisation or approximation of technical approaches to guarantee product safety and consumer protection; and (iii) standards convergence.

Stakeholder meeting on investor protection and ISDS

On 13 May 2014, the Commission hosted a stakeholder meeting in Brussels on ISDS in the TTIP. An ISDS is a mechanism allowing, under certain conditions, an investor to bring a claim directly against the authorities of the host country in front of an international tribunal when it considers that national laws are threatening its investment. During the stakeholder meeting, Commission officials replied to questions from representatives of several NGOs, trade unions and industry associations. The purpose of this meeting was to present the content of the ongoing consultation on ISDS in the TTIP and to exchange views with stakeholders.

The Commission launched a public consultation on ISDS in the TTIP on 27 March. The Commission intends to use the TTIP to make the investment protection system clearer, more transparent and more accountable than existing practice and to close legal loopholes. The consultation will be open until 6 July 2014. After the consultation, the Commission will publish a report and discuss the outcome with the Member States in the Council and the European Parliament. Once the EU institutions have adopted their conclusions on the topic, the negotiations on ISDS provisions in the TTIP will resume.