TTIP: Europe on the backfoot, and our standards with it

Speech at European Parliament International Trade Committee hearing on the Transatlantic Trade and Investment Partnership (TTIP) on 18 March 2015 by T&E director Jos Dings


Thank you for inviting us to speak at his important event. I head Transport & Environment, the Brussels-based environmental group focusing on transport. I also sit in the TTIP advisory group, representing environmental interests.

I like the focus of today’s event – what can Europe get out of TTIP, and is there a chance we can get something environmentally positive out of it? I will try to address both issues in five minutes. And I promise Ii will not talk about ISDS.

What do we want from the Americans?

Having sat for more than a year on the advisory group and hearing the rundown from the different rounds it is becoming increasingly apparent that we want much more from them than they want from us.

One important thing we want from them much more than they want from us is market opening.

The US has Buy America, we don’t have Buy Europe. The US bans oil exports and restricts gas exports – we don’t. We do not restrict ownership of ports, ships, and airlines nearly to the extent the US does. Just a few examples.

Indeed, the International Chamber of Commerce confirms this in its second report on the bi-annual Open Markets Index. On trade openness, EU countries score on average 4.2 out of 6, the US scores a measly 2.2. You could say we are twice as open as far as access to markets is concerned.

Simply put, there are large parts of the US markets we cannot get access to simply because we are not Americans.

When I take my environmental hat off, I can understand why many in Europe want to change this.

And what can we give back?

The short answer is we have less to give back.

Let’s look at our own market restrictions. Almost all of our market access restrictions stem from laws that implement standards, rules and procedures irrespective of where you come from. We do not allow GMOs, we don’t allow that many chemicals in our cosmetics, we don’t allow hormone-treated beef, we do not want high-carbon oil (at least that was the plan), we don’t want full-size pickup trucks dominating our roads, we want aviation to pay for its carbon. And these things apply whether you are European or American or from anywhere else in the world. We rarely restrict our markets on the basis of not being European, when we restrict access we do it on the basis of rules, principles and standards.

Our system of ‘Geographic Indications’ is one of the few exceptions to this rule.

Indeed this is confirmed by what the US says it wants from us. In his few speeches on TTIP, US Trade Representative Michael Froman has made it very clear that he wants more influence for America in our policies [1], and he wants to end the dominance of eurocentric standards that have frankly served us quite well – CEN, CENELEC, UN ECE, etc. [2]

The situation is quite clear – the EU simply wants the US to move from its current 2.2 score for trade openness closer to our own 4.2. But we do not have much to give back except in the field of current and future standards, principles and regulatory development. Market opening in return for regulatory concessions.

I hope I have made it clear that from a Machiavellian standpoint the risk that Europe concedes on regulation in TTIP is quite logical. We simply have not much else to give in return for the massive list of demands for market opening we are making to the US. As Larry Summers recently wrote in the FT: ‘negotiators should never forget that those who “need” agreements get less good ones than those who do not.’

So is there any way we can make TTIP a winner for the environment ?

Of course, in theory there are many things you can do that mean transatlantic alignment as well as environmental progress. I list a couple of examples in transport.

  • I would love to see an energy chapter that makes it easier for renewables and efficiency, not one that makes it more difficult by taking away barriers for fossil fuels.

  • I would love to see a transatlantic deal on aviation and shipping emissions; the EU regulating emissions from trips to the US, and the US doing the other part – something of that kind. Instead look at what’s happening in aviation: the US insists we cannot do anything about flights that leave the EU because they are not doing anything.

  • I would love to see the US working with us through UN ECE on global vehicle standards instead of running away every time it feels things do not go its way.

  • I would love the US to stop its massive subsidies to the oil and gas industries – we subsidise them too but not nearly as much.

  • I would love the US to be supportive of us adopting a California-style fuel quality directive – instead of joining with Canada in opposition.

  • I would love the EU to adopt US-style federal oversight on approved vehicles – so that the EU can swiftly fine vehicle manufacturers that work their way around the rules.

  • I would love the EU to have California-type standards for diesel vehicles and air pollution.

All these examples are just about transport – imagine how much more can be done, in theory.

Unfortunately, all of these things are very unlikely to happen – they are not even on the agenda. All the talk of regulatory convergence is about making lawmaking even slower, more drawn out and complicated – ‘paralysis by analysis’. The world moves ever faster, and we are making it ever more difficult for politics to keep up.

Given all this, I honestly find it quite easy to see why business loves TTIP – both market opening and concessions on standards are welcome. But it is equally difficult to see how TTIP can end up benefiting citizens and the environment.

And in a wider context I wonder why TTIP is so much more a priority than the whole list of Asian deals that are currently lingering on the vine. We are pivoting to the US while the US is pivoting to Asia. We should never forget that those who “need” agreements get less good ones than those who do not.

Notes:

[1] 'I hear regularly from US companies and associations about wanting to be more involved in the EU process of developing regulatory measures’

[2] ‘the only bodies the EU recognizes as producing international standards are those in which the EU member states cast the bulk of the votes’