The EUs Negotiating Aims - Case Study Example

1a. EU’s Negotiating Aims The EUs negotiating purposes are grouped into three categories ly, market access, regulatory cooperation and rules (Schott and Cimino, 2013). 1a.1 Market Access 1a.1.1 Trade in goods and custom duties Customs duties make trade between the EU and US very expensive. EU aims at eliminating almost all of these duties to lower costs of export goods, increase sales, increase jobs, resulting in more productive firms and increased trade in goods between EU and US (“Now Online”, 2015). 1a.1.2 Services EU firms are faced with obstacles when it comes to selling services in the US market (Scherrer, 2014). TTIP would introduce rules that would reduce or remove limits as to how much an EU shareholder can own in a US company. EU governments would be given the right to set quality standards and regulate services in other ways. 1a.1.3 Public procurement EU companies usually face hurdles when it comes to winning public contracts since they are not allowed to bid for contracts some other times. TTIP aims to remove such obstacles for both the EU and US. The EU aims to agree on rules that prevent discrimination against EU or U.S. companies when it comes to winning public contracts, thus maximizing their participation (“Now Online”, 2015). 1a.1.4 Rules of origin The EU aims at creating comprehensible rules that ensure that products that benefit from TTIP are produced in the EU countries or the U.S. (Scherrer, 2014). Such benefits include exemption from customs duties. EU aims at the creation of simpler rules of origin that can be easily understood by EU producers and exporters. These rules are to consider future trends in production and encourage innovation (“Now Online”, 2015). 1a.2 Regulatory Co-operation The primary objective of the EU is that they work together towards regulations in both economies that are more compatible with each other to reduce costs without reducing protection for people’s health, consumers’ rights, the environment and economic resources (Scherrer, 2014). 1a.2.1 Technical barriers to trade The main objectives of the EU will be to reduce the obstacles to EU-US trade from differences in operations such as labelling and also safety testing (Scherrer, 2014). It also aims at improving the mode of working together between the EU and US on technical requirements for products (“Now Online”, 2015). 1a.2.2 Food safety and plant-animal health The EU seeks to work in conjunction with US in increasing food exports while safeguarding its strict standards (OConnor and Sargeant, 2014). The objectives include reducing the time taken, by the U.S., to approve food imports from the EU. Another objective will be to help EU and US regulators work together on issues such as animal welfare (“Now Online”, 2015). 1a.2.3 Particular Industries 1a.2.3.1 Chemicals The primary goals are to improve the manner in which the US and the EU regulators work together, to avoid unnecessary costs resulting from different regulations of the EU and US, and to respect EUs strict standards that protect people and their environment. EUs desire is to create mechanisms for enhanced cooperation between current regulators of both economies. Another EU goal is to exchange information on new and emerging scientific issues (“Now Online”, 2015). 1a.2.3.2 Cosmetics EU and U.S. already have a system where they work together in the cosmetics area though they both have different regulators for cosmetics. EU’s goals are to agree to work closely on safety assessments. Another goal is to work with alternative methods of cosmetic testing other than animal testing. Another goal is to work together on labelling using international practices (“Now Online”, 2015). 1a.2.3.4 Engineering products EU wishes to work with the U.S. on maintaining high standards while making exporting easier. Enforcing interaction between EU and U.S. regulators to avoid unnecessary differences between their regulations is also an EU goal (“Now Online”, 2015). 1a.2.3.5 Medical devices EU wants the EU and U.S. to work closely together on medical devices and base their working terms on the International Medical Devices Regulatory Forum (IMDRF) (“Now Online”, 2015). The EU wants to agree to base their national systems for identifying and tracking medical devices on the glonal Unique Device Identification (UDI) system (“Now Online”, 2015). It also aims to make sure both economies UDI systems are compatible with each other. 1a.2.3.6 Pesticides One goal is to make trading easier (Scherrer, 2014). Using pre-export checks where EU regulators monitor the amount of pesticides in food products before shipping would make trading easier. Another goal is to promote niche crops, whose market isn’t as big as that of other crops. 1a.2.3.7 Information and Communication Technologies In ICT, EU wishes to start ways of working together to enforce regulations in the EU and US. Increased cooperation between regulators on things like e-labelling, e-accessibility and interoperability will ensure unnecessary differences in the economies’ rules and regulations (“Now Online”, 2015). 1a.2.3.8 Pharmaceuticals Inspections will be carried out in accordance with principles and guidelines referred to as Good Manufacturing Practice, which are EU-US acceptable. This will ensure unnecessary duplication of inspections. Regulators will also exchange information in order to decide whether to approve medicines (“Now Online”, 2015). 1a.2.3.9 Textiles Cooperation between regulators in the EU and the US is essential for labelling textiles and clothes in order for EU-US recognition of care symbols and also so as to agree on the fibers’ names. The EU also wants to work together with the US on product safety and consumer protection and standards and testing methods (“Now Online”, 2015). 1a.2.3.10 Vehicles An important goal of the EU is to identify many global benchmarking standards as possible with the U.S. the rules and standards of electric vehicles. Another of EU’s aims lies in coordinating plans for new regulations and research into new technologies (“Now Online”, 2015). 1a.3 EU Rules 1a.3.1 Sustainable development The EU aims backing the rights of people at work and the environment through several goals such as supporting core international standards and conventions for labour and the environment. Another goal is to keep their right to set high levels of environmental and energy protection and avoid a race to the bottom (“Now Online”, 2015). 1a.3.2 Energy and raw materials EU’s focuses on developing a strong set of rules that facilitate access to energy and raw materials and to also diversify raw materials and energy suppliers (“Now Online”, 2015). 1a.3.3 Customs trade and facilitation EU’s goals are to make it easier for firms to export between the EU and US and also to allow custom officers to do their checks to ensure that goods getting into countries are safe and that companies pay custom duties through such ways as agreeing on simple and understandable rules, using a uniform set of forms that companies fill in the entities borders, etc. (“Now Online”, 2015). 1a.3.4 Small and medium-sized enterprises The goal is to make sure smaller firms can take full advantage of TTIP and also sell and import to the US easily. Another goal is to have a free online helpdesk where they can get information on customs duties, taxes, regulations and market opportunities in the US (“Now Online”, 2015). 1a.3.5 Competition The EU wants to build, on the effectiveness of the EU-US Cooperation Agreement to enforce laws. It also aims at developing rules of competition further, other countries included. State-owned companies with monopoly powers are to refrain from discriminating against other companies. EU also wants an agreement on rules of transparency in companies dealing with industrial goods and services (“Now Online”, 2015). 1a.3.6 Dispute settlement In relation to WTO dispute settlement, the EU and the US decide in advance on the eligible arbitrators in case of disputes between US and EU countries. TTIP’s method of solving disputes is set to be even better in terms of transparency (Bledowski, 2014). This because hearings will be heard in public, interested parties offer their written views, and all the views submitted to the arbitrators (“Now Online”, 2015). 1b.1 The US Negotiating Aims 1b.1.1 Trade in goods The US’s aim is to abolish all tariffs and duties including charges on trade in agricultural, industrial and consumer products traded between the US and EU. It also aims at a substantial elimination of tax; transition periods where necessary in the case of sensitive products and appropriate safeguard mechanisms applied, if and where necessary (Bledowski, 2014) 1b.1.2 Textiles and Apparel US seeks to attain full mutual entrance to the EU market for US textile and apparel products enhanced through the efficient custom collabouration and other rules that facilitate US-EU trade in textiles and clothing (Bledowski, 2014). 1b.1.3 Non-tariff barriers and regulatory issues The US seeks to reduce or remove non-tariff barriers, which lower opportunities for US exports, providing a competitive advantage to EU products. It also aims at building, on key principles of the WTO, to establish significant market access and develop mechanisms for improved dialogue and cooperation (“T-TIP Issue”, 2013). 1b.1.4 Rules of origin US seeks to establish rules of origin that ensure that benefits like duty rates will only apply to goods that are rightfully allowed to benefit from such treatment (Bledowski, 2014). It also seeks to define processes to use and put the rules in effect (“T-TIP Issue”, 2013). 1b.1.5 Trade in services The US seeks to attain an improved access to the EU market on an understandable basis and also to address the operation of any selected monopolies and state-owned enterprises in a suitable manner. It also seeks to enhance to make regulatory cooperation better (“T-TIP Issue”, 2013). 1b.1.6 Electronic commerce and ICT services They seek to extend suitable provisions that aid electronic commerce use to support goods and services trade. This could be done through not imposing customs duties on digital products. They also seek to include provisions that aid the movement of cross-border data flows (“T-TIP Issue”, 2013). 1b.1.7 Investment The US seeks to secure US investors in the EU essential rights as compared to those that are available under US legal principles and practices. They also seek to ensure that US investors in the EU countries are treated the same way as the EU investors (“T-TIP Issue”, 2013). 1b.1.8 Government procurement The US seeks widening market access opportunities for US goods, services and goods and services suppliers to government procurement markets of the EU and its member states. They also seek transparency and fairness when receipt of treatment as favorable as that accorded to EU suppliers (“T-TIP Issue”, 2013). 1b.1.9 Labour The US aims at obtaining appropriate pledges by the EU in relation to internationally-recognised labour rights and effective enforcement of labour laws concerning these rights that are in line with US priorities and objectives. It also seeks to create procedures for consultations and cooperation to promote respect for internationally recognised labour rights (“T-TIP Issue”, 2013). 1b.1.10 Environment The US seeks to obtain suitable commitments by the EU to protect the environment, conserving natural resources inclusive, which are in line with US objectives. It also seeks to enforce environmental regulations and prospects to address mutual environmental issues (“T-TIP Issue”, 2013). 1b.1.11 Intellectual Property Rights (IPR) The US seeks to obtain appropriate commitments that reflect the shared US-EU objective of high-level IPR protection and enforcement and to also sustain and promote joint leadership on IPR issues (“T-TIP Issue”, 2013). 1b.1.12 State-Owned Enterprises and SMEs The US seeks to create the right relevant disciplines on state trading enterprises, state-owned enterprises and selected monopolies such as regulations that support transparency and reduce trade distortions (“T-TIP Issue”, 2013). 1b.1.13 Transparency, Anticorruption and Competition The US seeks to get enhanced transparency in EU administration and the entire trade and investment schemes. They also seek suitable pledges on anticorruption. They find an address of matters of joint interest regarding competition to improve competition policy further (“T-TIP Issue”, 2013). 1b.1.14 Dispute Settlement They seek to create just and transparent processes to settle disputes on issues arising under the trade and investment agreement with the EU, early identification and settlement of disputes through consultation included (“T-TIP Issue”, 2013). Question 2 2. Controversial Subject on the Transatlantic Trade and Investment Partnership Food safety and animal and plant health (SPS) is a topic of negotiation that shows some levels of controversy. The controversy in this issue lies within the primary difference between the approaches that EU and US use to evaluate food safety. The EU uses the Precautionary principle as it regulatory foundation, which is typically a “better safe than sorry” approach (Armanovica and Bendini, n.d.). The U.S., on the other hand, uses a "risk assessment" method that is typically linked to the cost-benefit analysis when looking at food safety standards (Kuiper, Kok and Davies, 2013). This approach seems fundamentally at the costs of the business versus possible harms to residents and the environment. Due to these two different approaches the EU usually has higher food safety standards than the US. The US has however advanced in standards like banning ruminant materials in livestock feed that can lead to mad cow disease (Armanovica and Bendini, 2014). The U.S. plainly despises the precautionary principle. A U.S. Council for International Business lobbyist even commented that TTIP was only worth doing if the precautionary principle was gotten rid of. U.S. trade officials portray the precautionary principle as being unscientific. Another controversial aspect of this issue is the issue of genetically modified products and hormone-treated beef. The US allows growing of genetically modified plants which in turn allows trading of genetically modified products. It also allows trade of hormone-treated beef, of which the EU does not allow for its countries. However, the EU has strict standards on genetically modified products and hardly allows their trade unless they are tested to be safe. Animal welfare is not as severe in the US as it is in the EU. The EU has strict policies on animal protection and safety. TTIP will force the EU to lower their standards of laws concerning food safety and animal and plant health after harmonisation of the laws and regulations which may open a race to the bottom (Lester and Barbee, 2013). Harmonisation of the laws has to occur as the current laws of the two entities are in conflict (Armanovica and Bendini, 2014.). The difference in rules could also lead to conflict with most EU countries, especially those that have banned the usage of genetically modified foods. Question 3 3. Reasons for Food Safety and Animal and Plant Health Being Part of the Negotiation Animals, plant materials and food products imports could have a negative impact on health and overall well-being of the livestock, plants and animal population (Ackerley, 2013). Regulations present in this field normally have a notable impact on trade. The EU and the US laws both have different ways of ensuring the safety of their people and the environment. If TTIP were to exist and the laws are not harmonised, this would lead to a costly duplication of checks on products that are already proven to be safe. This chapter being a part of the negotiation is crucial because it will help to keep the effects of regulations of the trade at a minimum through encouraging interaction and working together of the EU and US regulators. When the regulators of both entities work together, this will lead to harmonised regulations on food safety thus they will operate on agreed-upon rules (Lester and Barbee, 2013). This will keep harmful effects of regulations on trade at a minimum. Food safety and animal and the plant health chapter will also lead to the respect of the human, animal and plant health by the two entities. The EU has their strict rules on food safety and animal health (“Animal health”, 2012), US also has their regulations, though not as severe as the EUs. Through TTIP, regulations that are mainly concerned with human, animal and plant protection but still allow favorable trade will be put in effect (Lester and Barbee, 2013). By upholding the EU’s strict standards on food safety, human, animal and plant health will be respected (“Animal health”, 2012). Negotiations on this chapter will also aid to eliminate unnecessary trade barriers. Strict regulations such as those on GMOs and hormone-treated beef do not allow the US to sell its products to the EU countries (Armanovica and Bendini, n.d.). However, once the EU and the US have agreed on standard regulations, this will ensure that safe products can be traded easily with no obstacles (Humphrey, 2012). This chapter will also improve transparency and provide clear timelines for approving imports or new products. Through a transparent set of processes, the two trading partners will operate efficiently, openly, and with minimum trade barriers on imports and exports. TTIP also provides that the parties should not trade in abused animal products. However, even though this clause lacks substantial backing and strength it is a good food safety measure provided by the TTIP aimed at ensuring food safety standards are adhered to (Suppan, 2014). Therefore, this is a significant merit of the legislation, which if adopted and implemented effectively can ensure and safeguard consumers in both trading block partners. TTIP recognises animals like sentient beings. For this reason, the legislation demands that member countries respect and safeguard the rights of animals. Thus, through this provision, TTIP has outlined a number of minimum standards aimed at safeguarding animals while in transit, slaughter or in the firms. However, this has been provided on a vague language that opponents to the negotiations say are less effective in safeguarding the rights of animals. However, it is imperative to make a blanket conclusion that TTIP recognises the rights of animals even though to a less extent like the EU regulations. Disadvantages TTIPs principal objective is to maximize trade. The SPS chapter focuses on protecting humans, animals and plants. However, it may be difficult to realise that, given the business discussion by the EU and the US and also the fact that there are limited food safety resources (“TTIP wrangles”, 2014). Countries right to inspect food and agricultural imports will be limited to only individual cases such as checking for regulated pests (Eliasson, 2014). This chapter fails to ensure that there is a requirement providing extensive resources to protect health and human, animal or plant life (Ackerley, 2013). The fact that rules on food safety can only be challenged by investors and governments and not by the public makes it ineffective. This is because investors and governments are unlikely to notice failed food safety rules (Baker, 2014). The harmonisation of the U.S. and EU regulations has been criticized by many scholars on grounds that TTIP will facilitate the watering down of EU’s food safety and animal and plant health regulations, in that, TTIP will permit the consumption of GMOs, nano materials and cloned animals in the EU even though to a lesser extent (Kajetzke & Rojo, 2015). Therefore, if TTIP gets approval without any converging the regulations of the EU and U.S., there is a likelihood of multinational companies starting to dump animal products and moving of production sites to areas with lesser animal rights and welfare provisions in order to cut down on their costs of production and operation. In essence, the adoption of TTIP without any convergence will lead to degradation of the much stricter EU regulation on animal safety (Kajetzke & Rojo, 2015). Conversely, the aim of TTIP to maximize trade and investment in the use of animal products such as meat, milk and eggs. From the ethics perspective, this objective of frenetic consumption of these products is unstainable because it will require the sacrificing of over 60 trillion marine and land animals annually to meet the global consumption demand. For instance, Kajetzke & Rojo (2015) states that “Meanwhile, the TTIP proposal has neither questioned the sustainability or morality of using hundreds of billions of animals as mere products for human consumption (in the form of food, clothing, experimentation, or entertainment) nor mentioned any reduction in the consumption of products derived from animals.” Therefore, this is a clear manifestation that TTIP regulation on Food safety and animal and plant health is an erroneous harmonisation process, requiring the defenders of animal rights to voice their views to protect and safeguard the rights of animals (Kajetzke & Rojo, 2015). TTIP language on consumer food safety is a significant demerit contained in the TTIP draft. For instance, the concerns of the EU raised in the convention regarding the U.S.’s of chemically produced poultry exports have not been included in the draft of TTIP (Suppan, 2014). The U.S. allows the therapeutic utilisation of veterinary drugs such as antibiotics in poultry and meat production, which are not allowed in the EU (Suppan, 2014). In addition, the EU requires the labelling of foods that contain GMOs. However, these concerns have not been effectively addressed in the TTIP raising questions on the possibility of the U.S. products getting their way into the EU market (Suppan, 2014). Therefore, rather than the TTIP addressing these concerns, it concentrates only on how to streamline trade and investment in production in the two blocks disregarding critical factors such as food safety and animal and plant health. Another disadvantage posed by TTIP is the elimination of food-re-inspection and testing to ensure food standards are adhered to. Suppan (2014) argues that “Detaching re-inspection and testing from SPS systems equivalence determination provides a layer of government verified and certified food safety management insulation from liability for exporting or importing contaminated product.” Therefore, the elimination of these processes is not aimed at promoting trade but rather fulfills an erroneous agenda of stakeholders, especially the government and its agencies and this poses significant risk and challenges to food safety measures. The establishment of a new joint EU-U.S. management committee, composed of trade and regulatory specialists, which will be responsible for food safety is another significant disadvantage posed by TTIP because it indicates a shift of power from national governments to a committee (“Analysis of the European”, 2015). Decisions will, therefore, be made by trade officials and not food safety officials of the nations (Welfens and Irawan, 2014). Trade officials typically view safety rules as trade barriers (“TTIP wrangles”, 2014). The implemented protection methods would, therefore, be at risk. Rules to raise standards made at a local level would be undermined by the rules set at EU or federal level in the U.S. Exporting countries would, therefore, insist on the acceptance of their products, which would create pressure on local states to accept imports that do not match their level of standards. Foods made from new technologies as those of genetic modification have a likelihood of being traded since regulations specific to those technologies are absent (“The Safety”, 2003). New regulations may be interpreted as barriers to trade (“TTIP wrangles”, 2014). Cloned animals are not allowed in the EU but may still find their way there since they are not tracked by the US (D., n.d.). Animal welfare standards may be strict in the EU but there is no indication that products from animals raised under low welfare standards will not be accepted as imports (“Evidence sought”, 2012). 4. Conclusion In summary, TTIP currently under negotiation would result in a myriad of benefits to both the EU and the US. That is why intensive negotiations have been made by the EU and the US. Securing a comprehensive TTIP would provide a vast financial boost to the economies involved. However, TTIP has not been without controversies. A couple of controversies faces the food safety and animal and plant health chapter of the negotiations. They include the possibility of food safety standards of the EU being lowered, implications of genetically modified plants and standards for animal welfare. That said, the two trading blocs are still negotiating and may come up with more efficient ways to sort out the controversies. 5. Bibliography Ackerley, L., 2013. 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