Better trade

T&E actively monitors multiple ongoing negotiations both by region and issue, progress on implementation of agreements (for example on the Comprehensive Economic and Trade Agreement with Canada), and other initiatives such as the establishment of the Multilateral Court on Investment (MIC). T&E closely monitored the EU’s Transatlantic Trade and Investment Partnership (TTIP) negotiations with the U.S. as part of the Commission’s TTIP advisory group and will continue to do so should the negotiations be taken up again.

CETA

In 2006, representatives of Canada and the EU met to advance the Canada-EU Trade and Investment Enhancement Agreement (TIEA), which had stalled. The outcome of the meeting was a new negotiating framework for a Comprehensive Economic and Trade Agreement (CETA), which would go beyond TIEA and give negotiators a broader scope.

Then Commission president José Manuel Barroso and Canadian prime minister Stephen Harper officially presented the final deal during an EU-Canada summit in Ottawa, in 2014. After a comprehensive legal scrubbing, the final text was published in February 2016.

Nevertheless, CETA has since become extremely controversial, mainly because of the inclusion of the Investor-State Dispute Settlement (ISDS) mechanism. It was slightly modified and renamed into ‘Investment Court System’ (ICS) during legal scrubbing, to calm growing concerns. However, the re-branding was unsuccessful as public opposition kept growing. T&E has scrutinised ICS in CETA, see more here.

More and more evidence is emerging that agreement on CETA has been one of the key reasons for the delaying and watering down of the Fuel Quality Directive by the European Commission. This is an EU law that aims to clean up transport fuels, and if fully implemented it would make it more difficult for Canada to sell petrol and diesel made from its high-carbon tar sands in Europe.

The final text of the agreement, including translations, is available on the Commission website. The agreement was signed on 30. October 2016 and has been approved by the European Parliament on 15. February 2017 with 406 votes in favour and 255 votes against.. Subsequently, it will have to be approved by each Member States’ parliament(s) (as a so-called mixed agreement) before it can be fully ratified. In the meantime, parts of the agreement will be applied provisionally as of summer 2017.

Read the joint report by T&E and ClientEarth on CETA and the environment here.

TTIP

At the June 2013 G8 Summit, US president Barack Obama and several key heads of EU states and institutions announced the launch of negotiations for a comprehensive free trade agreement, the Transatlantic Trade and Investment Partnership (TTIP). The EU and the US annually trade around $2.2 billion (€1.95 billion) in goods and services, with an additional exchange of over $3.5 trillion in two-way direct investment per year. It is the world’s biggest bilateral trade relationship.

The EU and the US had met for multiple negotiation rounds. However, since the latest US elections, TTIP has been put ‘on ice’ and it is not certain in what shape or form, if at all, will resurface.

Nonetheless, TTIP is a prime example of how the Commission wants to go way beyond tariff and quota dismantling. Both the Commission and the Obama administration wanted to include ISDS. Responding to public and parliamentary backlash, the Commission proposed an alternative Investment Court System (similar, but not identical to ICS in CETA) to replace ISDS, but the Americans have yet to agree on it.

The Commission also seeks to establish deep regulatory cooperation with the objective of eliminating as many differences in rules and standards as possible. Citing an increasingly maligned Center for Economic and Policy Research, the Commission suggests that the economic benefits expected from TTIP are in the range of €500 p.a. per family. Closer inspection reveals that this figure is based on a scenario wherein 50% of differences in transatlantic standards are eliminated. This assumes an incredibly deeply integrated transatlantic market, where laws and standards would need to be decided jointly or be mutually recognized.

Both mechanisms, ISDS/ICS and regulatory cooperation, may lead to a ‘fright to regulate’: the fear of US companies suing, or the US having to agree with future EU standards will surely have a chilling effect on laws to protect people and the planet.

This raises many questions, especially as negotiations are deeply shrouded in secrecy. Only a very limited amount of EU negotiating texts – and no US ones – are publicly available.

In an attempt to address the concerns highlighted above, the Commission established an advisory group in March 2013 to provide the ongoing negotiations with expert input. T&E sits on this group along with seven other civil society representatives and eight industry representatives. Our key objectives as part of the advisory group are to press for a redress of the fundamental flaws highlighted above, to secure greater openness in TTIP and future negotiations, and to allow for better coordination between civil society organisations.

Together with other environmental groups in the Green10, T&E wrote a TTIP position paper.

EGA

The Environmental Goods Agreement (EGA) is a trade agreement currently being negotiated by 17 members of the World Trade Organisation (WTO), including Australia, Canada, China, Chinese Taipei, Hong Kong, Iceland, Israel, Japan, Korea, Norway, New Zealand, Singapore, Sweden, Turkey, the US, and the EU – on behalf of its 28 member states.

Launched in July 2014, the EGA negotiations are conducted under the WTO as a plurilateral alternative to the faltering Doha Round. Products nominated for the EGA list are categorised under one of the following 10 categories: air pollution control (APC); renewable energy creation (CRE); energy efficiency (EE); environmental monitoring and analysis (EMAA); environmentally preferable products (EPP); environmental remediation and clean-up (ERC); noise and vibration abatement (NVA); resource efficiency (RE); solid and hazardous waste management (SHWM); and water waste management and water treatment (WMWT).

The EGA negotiations aim to expand the list of environmental goods beyond the work of the Asia-Pacific Economic Cooperation (APEC) forum’s agreement on a list of 54 environmental goods. More than half of the EGA negotiating parties have already agreed to the APEC list, wherein a 5% tariff ceiling on specified environmental goods was set to enter into force by the end of 2015 originally. It is projected that the EGA will mirror this target of effecting tariff reductions below the 5% threshold.

As of the fifteenth round, the EGA was comprised of a list of originally more than 650 items proposed for tariff reductions, which has been narrowed down in each round. However, there remain no formal criteria as to what goods advance environmental objectives, which, coupled with a general lack of transparency surrounding the negotiations, makes monitoring almost impossible. Meaningful progress on the agreement has stalled since 2016.

Many countries had made submissions that are, in fact, environmentally harmful or whose benefits to the spirit of the EGA are quite dubious – air conditioners, asbestos-laden cement, and anthracite coal are some egregious examples. Furthermore, the abundance of items that seem to have only tenuous potential for the advancement of environmental objectives, while not outright harmful to the environment, is also a concern. The lack of a clear definition and selection criteria undermines the credibility of the current EGA as proposed and risks provoking undue hostility to future accords in a similar vein.