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26 March 2014

EU–US Summit (TTIP)

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The EU was represented by Presidents Van Rompuy and Barroso; the US was represented by President Barack Obama. Prior to the summit, multiple US/EU financial services trade associations issued a statement in support of a TTIP that includes financial services regulatory coordination. (Includes comments.)

Excerpts from Joint Statement

1. We, the leaders of the European Union and the United States, met today in Brussels to reaffirm our strong partnership. We reaffirmed our shared values of democracy, individual freedom, the rule of law and human rights, and a common commitment to open societies and economies. Starting from those values, the European Union and the United States work together every day to address issues of vital interest and importance to our citizens and the world. We strive to create jobs and sustainable growth through sound economic policies. We seek a landmark Transatlantic Trade and Investment Partnership to build our common prosperity. We undertake joint efforts to build security and stability around the globe and to tackle pressing global challenges like climate change. Today, we took stock of our achievements, set priorities and charted the way ahead for a stronger transatlantic relationship, and rededicated ourselves to building a safer, more prosperous world for future generations.

3. Reinforcing economic growth and job creation remains central. The EU and the United States have taken important steps to stabilise financial conditions and overcome the crisis. The EU remains committed to building a deep and genuine economic and monetary union, including a banking union on which significant progress has already been made. Determined action by the EU and the United States is vital to support the recovery in the short run and to promote sustainable and balanced growth, to boost competiveness and to reduce unemployment, especially of young people.
4. We commit to continue our efforts through the G20 to promote strong, sustainable and balanced growth across the global economy by developing comprehensive growth strategies for the Brisbane Summit. We aim at implementing the G20 commitments to create a more stable financial system. Fiscal sustainability in advanced economies remains critical for a stronger and sustainable recovery. We also welcome the ambitious G20 agenda to fight tax
5. Today we reaffirmed our commitment to conclude expeditiously a comprehensive and ambitious Transatlantic Trade and Investment Partnership (TTIP) that will strengthen an economic partnership that already accounts for nearly half of global output and supports three-quarters of a trillion euros in bilateral trade, and almost 3 trillion euros in investment, and 13 million jobs on both sides of the Atlantic. We commit ourselves to conducting these negotiations with clarity and in a manner that builds support among our publics. The United States and the EU continue to share the same goals spelled out in the February 2013 Final Report of the High Level Working Group on Jobs and Growth. These goals include expanding access to each other’s markets for goods, services, investment, and procurement; increasing regulatory compatibility while maintaining the high levels of health, safety, labour and environmental protection our citizens expect of us; and formulating joint approaches to rules that address global trade challenges of common concern. A high-standard TTIP agreement will make us more competitive globally, and boost economic and jobs growth, including for small and medium-sized enterprises.
In his remarks following the summit, president Barroso said: "Your visit sends a very strong signal. First of all to the European citizens, in the sense of how important this transatlantic relationship is for Europe and for the United States of America; to the American people – and I would like to say to the American people that you can count on us as your best friends and allies; and also to the rest of the world. We remain committed and open. We are decided to engage in all global issues, from free trade to achieving the millennium development goals and to climate action. But at the same time we will also be firm in defending our common values: values of peace, freedom, of the rights of the individual, the rule of law, of international law."

"A very concrete, probably the most concrete example of the deepening of our relationship, is precisely the Transatlantic Trade and Investment Partnership, not only because it is the agreement that we are preparing for the most important economic relationship in the world. Every day, there is trade of €2.2 billion between the two sides of the Atlantic. It is not just because of the huge dimension of this agreement, but because it will be an agreement among equals. Not only are our economies equal in size, but our societies are equal in values. And I believe that to both our economies a new impulse of this Transatlantic Trade and Investment Partnership, will be very important to give a decisive injection of dynamism. And indeed even increase the potential for growth, not only for big business, but also for small and medium-sized businesses, for every household there are great potentials in terms of job creation on both sides of the Atlantic, if we do it right. And today we have confirmed that we are determined at the highest level to make it happen and to make it a success, not only for us, but also for the global economy."

Full remarks

In his statement, president Van Rompuy said: "Together with President Obama, we reconfirmed our shared commitment to an ambitious transatlantic trade deal... Let me just say that, in days like these, forging even stronger economic ties across the Atlantic is also a powerful political sign. A way to show our public opinions and the world who we are at heart, in Europe and America – economies based on rules, societies based on values, and proud of being so.

Press release ahead of summit

The EP spoke to Christian Ehler MEP,  the chair of the delegation for relations with the US, who said that for the US there is no partner comparable to Europe, and stressed that links with the US were still strong and vital. "The free-trade agreement is still on track. We hoped that there would be more substantial proposals during the latest round of negotiations in terms of tariffs, possibly even reducing them to zero. But this is a part of the negotiations. We just have to keep our aim in mind: to have a well prepared free trade agreement. I look forward to further negotiations."

Press release

EPP: Time for concrete and decisive actions

EPP President Joseph Daul made the following statement: "In the EPP, we believe that the EU must maintain and develop a strong transatlantic partnership, combining a free and fair market built on common values and mutual trust. Such a transatlantic market will contribute to trade revenues and increased growth, creating more jobs and prosperity for European citizens. Our combined Gross Domestic Products (GDP) represent more than half of the global GDP. We, as partners, have the world's strongest bilateral trade and investment partnership, accounting for more than 30 per cent of world trade. Each day, $2.7 billion of goods and services are traded bilaterally, supporting millions of jobs in both our economies. Our relationship goes further than a trade agreement. Together, the EU and the US can take the lead in developing strategies to address global threats and challenges."

Full press release

Austrian Chancellor Werner Faymann assured the deputies at the National Council that Austria would only vote in favour of the EU free trade agreement currently being negotiated with the United States if important environmental and social standards were guaranteed. A agreement that set lower standards than currently in place would not be accepted by the government, he said. The Green Party, however, does not feel sufficiently informed about the ongoing negotiations and has further major concerns. The enviseaged right of action of foreign investors is contested in particular.

Press release (in German)

Statement from multiple US/EU financial services trade associations in support of a TTIP that includes financial services regulatory coordination

“The EU-US Summit being held this week offers the opportunity for policymakers to further strengthen the long-standing ties of friendship and trust between the two jurisdictions and to deepen their coordination on economic issues to significant mutual advantage. As part of this, there is the opportunity to enhance their financial regulatory coordination process. This is fundamental to our intertwined economies and financial markets. Importantly, a financial services regulatory framework between the US and EU would facilitate and guide efforts to promote consistent and coordinated high-quality regulatory standards in global markets, providing significant benefits to clients. The opposite approach – divergent and conflicting regulation – risks damaging global growth, job creation, and investment and may hinder the important advances in the effectiveness and strengthening of the new regulatory environment.

“As both jurisdictions robustly implement the G20 Pittsburgh Summit mandates, we believe that policymakers should strengthen coordination through inclusion of financial services in TTIP.  As such, it is only logical that there be a mechanism for consistency and coordination in the implementation of such regulatory reforms, as is being discussed for other economic sectors.

“This week’s Summit is a critical opportunity to strengthen the transatlantic relationship, build trust, enhance coordination, reduce conflict and confusion, and improve the efficiency of regulations across jurisdictions for the benefit of regulators and the regulated alike.”


Full statement

Europolitics reports that the US Treasury is a big obstacle to the financial sector's inclusion in TTIP. Washington's opposition stems not from the lead negotiator, the US Trade Representative (USTR), nor from the financial services industry. In fact industry on both sides of the pond support putting financial services in the TTIP in order to remove and avoid regulations that impede market access. No, it is the US Treasury that is the reluctant one.

At a US Senate hearing, on 28 January, EU-US differences on this issue were laid bare. While Treasury's Deputy Assistant Secretary Mark Sobel argued that the G20 was a better forum to discuss regulatory convergence, the Deputy EU Ambassador to the US, François Rivasseau, could not disagree more. Rivasseau also tried to dispel another argument sometimes heard in Washington: that inclusion would undermine the landmark Dodd-Frank law the US enacted in 2010 to strengthen financial services regulation. Treasury's opposition seems to be motivated in large part by its 'turf battle' with the USTR, the agency with which it shares responsibility for negotiating financial services abroad. Treasury may accept having a chapter in the TTIP to promote regulatory transparency across the board - clearer procedures for adopting regulations, more systematic consultation of stakeholders - but does not wish to upgrade to a more political level existing EU-US financial regulatory dialogues.

The problem concerns the implementation of US and EU rules and not their substance, recall several observers. "We do not talk about creating a new forum", explains the EBF, which is in favour of the inclusion of a regulatory cooperation framework for financial services in the TTIP. "We need to have a framework where the regulators of both sides will discuss, will find a common understanding and will implement the rules in compatible manner […] There are similar legislations but often there is duplication of the requirements", elaborates the EBF.

In further reporting, the German Zeit said that opposition to the TTIP is also growing in the US, and that one of its most important supporters, US President Barack Obama, seems to be abandoning the project slowly in the face of bureaucratic obstacles. Last year, Obama had described the agreement as "very important"; a free and fair exchange of goods between the US and the EU would support millions of well-paid jobs in America, he said at the time. In his State of the Nation address at the beginning of this year, however, he mentioned TTIP only as an afterthought. 

From the beginning, TTIP was born out of necessity for Obama, the newspaper writes further. Obama had regarded free trade agreements as a substitute for economic programmes that he would have liked to initiate but could not get a majority in the House of Representatives. With his expressed commitment to globalisation, Obama has performed a political U-turn: The President had until recently been a sceptic of free trade. 

Bruegel: Transatlantic trade, butterflies and earthquakes - how TTIP fits in the evolving global trade landscape

Ultimately, to deliver a deal that is more welfare-improving, TTIP negotiators will need to focus on means to enhance long-term competitiveness of the two partners rather than bargain concessions that will be bear little fruit in the global trade arena.

Full article

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