WASHINGTON — Despite the turmoil surrounding the U.K.’s vote to leave the European Union, the EU’s trade chief said Wednesday the negotiations over the Transatlantic Trade and Investment Partnership trade deal with the U.S. will go forward.
Cecilia Malmstrom, trade commissioner of the European Commission, the executive body of the EU, said in a speech at the Atlantic Council here that the next round of TTIP negotiations will begin the week of July 11 in Brussels. Malmstrom also said she was optimistic about meeting a mandate of concluding the talks with the U.S. by the end of the year while President Obama is still in office.
“We are committed to this trade agenda. We are negotiating with a lot of other countries as well, not only TTIP,” Malmstrom said. “And we will do whatever we need to do to make as much progress as possible in the coming months, and if possible conclude it before the end of the Obama administration. That is still plan A. And that has not changed, even if the referendum is there. The Brits are still with us and are negotiating with us. That was confirmed yesterday by member states.”
Malmstrom said sooner or later the EU will have to make decisions about TTIP once the U.K. and its next prime minister define its trade relationship with the EU and rest of the world. But for now, negotiators will negotiate as a 28-member bloc with the U.K., she said.
U.S. and EU negotiators have been negotiating TTIP for more than three years, seeking to forge a deal that would eliminate tariffs on imports, streamline regulations, remove burdensome technical barriers and eliminate redundancies in areas such as customs procedures, product safety testing and certification and labeling requirements.
“Over the past three years, we have come a long way,” Malmstrom said. “We can now — looking at all the different proposals and issues papers — begin to see the outlines of what TTIP will actually look like.”
To meet the year-end target of concluding the talks, she said negotiators will have to move fast and she gave an update on where things stand in different areas of the TTIP negotiations.
On market access, she said negotiators are looking for an “ambitious outcome that removes almost all tariff protection.”
“Here, we are relatively well-positioned, with ambitious offers on the table from both sides,” she said.
The U.S. and EU have long touted the TTIP as an agreement that can bring regulatory cohesion to a thicket of diverse regulations that often impede trade across the Atlantic.
U.S. and European fashion industry associations have pressed TTIP negotiators to streamline, simplify or eliminate duplicative and burdensome labeling and product safety requirements.
There are several sticking points in the talks, including an investor-state dispute settlement mechanism that allows an investor the right to use dispute settlement proceedings against a foreign government. Differences in government procurement policies are also thorny. Those issues could slow down the talks if they move into high gear this summer.
Malmstrom noted there was still “more work to do” on trade in services to address long-standing barriers and said negotiators are still trying to resolve differences over public procurement provisions, an area that the U.S. textile industry is keenly watching.
The National Council of Textile Organizations has said it sees some challenges as the Obama administration accelerates negotiations with the EU on TTIP.
The two biggest issues for the industry are that the EU favors a more liberal rule of origin, a fabric-forward rule, as opposed to the stricter yarn-forward rule that the U.S. supports. In addition, the EU is pressing for access to U.S. military contracts through the government procurement process, which currently only allows the Defense Department to purchase 100 percent U.S.-made products from the fiber forward under the Berry Amendment. Several textile companies rely on the U.S. government procurement business to grow and expand, and staunchly oppose opening it up to European bidding.
Malmstrom argued the EU’s case, saying the bloc is “looking for a level playing field.”
“When EU companies compete for contracts — with the federal government and in a critical mass of U.S. states — they should have the same advantages as U.S. firms have under our European system,” she added. “Here we have one set of rules, full transparency and a joint database for all levels of the European Union.”
NCTO has said it will continue to press U.S. negotiators not to change the Berry Amendment requirements.