Speech: Business and the Transatlantic Trade and Investment Partnership
European Commission - SPEECH/13/338 18/04/2013
Other available languages: none
Karel De Gucht
European Commissioner for Trade
Business and the Transatlantic Trade and Investment Partnership
EU-US Business Leaders' Round Table/ Dublin, Ireland
18 April 2013
Minister Bruton, Chairman Moreira, Ambassador Kennard,
Ladies and Gentlemen,
I want to start by thanking the Irish Business and Employers Confederation's (IBEC) representatives, Julie O’Neill and Danny McCoy, as well as President Thumann and President Donohue, for bringing us together in Dublin today.
When the first American consul to this city arrived in the 1790s, he toured the country looking for business opportunities for American traders. After his tour he reported to George Washington that “no country in Europe contains more real friends to America [or] who rejoice more in her rising prospects.”
So it seems you chose the right country to hold this meeting in!
Because although negotiations are adversarial in nature, trade negotiations are most certainly also about partnership.
And if these negotiations for a Transatlantic Trade and Investment Partnership are to be successful, both sides will need to be tough in the defence of their interests, while at the same time seeing beyond the zero-sum game.
It is very fortunate that we are beginning this process under the Irish Presidency.
Ireland surely has interests to defend in this negotiation but is also an excellent example of how the bigger picture of openness brings benefits for both sides. In the face of all the challenges of recent years in so many parts of your economy, the international sector has been a motor of recovery.
And, as you know, that is what we see this agreement doing for the wider transatlantic economy.
If we can do the right kind of deal we have the prospect of expanding our economies over time by 0.5 per cent of GDP, with gains of almost 200 billion euro in total. On top of that, the short term impact of actually reaching an agreement would be a shot in the arm for business confidence on both sides of the Atlantic. If the two largest trading powers take a decisive step towards opening their markets that will go a long way to reducing the risk of a protectionist spiral in response to the crisis.
So that is what we are trying build here. A motor of recovery.
But of course it’s not just any old motor. It’s a complex one, with many moving parts and many innovative components.
So building it is going to be a challenge.
We will have to include the basics of a free trade agreement. The average tariffs companies pay to ship your goods across the Atlantic may be low, but that doesn’t meant they don’t matter.
Averages conceal peaks and those peaks are often very high. What is more, components may cross back and forth many times between our integrated economies – and pay tariffs several times – before reaching the final consumer. And of course the volume of transatlantic trade – 2 billion euro a day – means that even small tariffs add up to big costs on business.
But it is the more complex elements of this motor that are going to present us with the biggest challenge, even while contributing most of the power.
I’m speaking of course of the regulatory barriers to trade and investment, which we estimate could have the same effect on trade as tariffs of 10 or 20 per cent.
But dealing with them is not straightforward. We will need to engineer solutions that tackle the differences of approach that cost so much to your companies, while respecting the legitimate aims that our regulators want to achieve.
We should be clear on one thing here – this agreement will not form some sort of back door for wholesale de-regulation.
We are not going to lower standards of protection – but we will be flexible and creative enough to find solutions.
We are prepared to look very pragmatically at all the different possibilities – mutual recognition in some sectors, convergence in others, mechanisms for alignment of future regulation in still others. And we will look at general approaches alongside sector-specific agreements.
The remaining parts of the motor are also crucial. We need to see an agreement on services that locks in our current openness but also opens up new market for services companies.
We need to see new business opportunities in procurement where they count – in the US case at both federal and state level.
And we need to use this opportunity to take the transatlantic principles on investment that we agreed last year and translate them into a text on investment that is as strong as anything else either of us have agreed to date.
That is the task we have ahead of us. It will be no mean feat.
Now – I don’t want to take up too much time talking myself because I am very interested to hear what you have to say about this process.
I know it’s no mean feat either to have coordinated your schedules to be here today so I’d like to take advantage of that if I can.
But let me just make one more point before I finish.
I am very encouraged about the positive response that this negotiation has received so far – in the media and most of the way across the political spectrum.
I am also very encouraged by the support that you in the business community have so far provided. By organising events like this and by contributing detailed input to our public consultations – whether on the big horizontal issues, or on the detailed sectoral regulatory issues like pharmaceuticals – a sector that I know is well represented here today and has already provided useful information.
But none of us who support this negotiation should be in any doubt that things are going to get tough once we get going.
No vested interest ever let go of its privileges without a fight.
So persistence is going to have be our watchword.
Most importantly we are going to need you to be vocal, in public, about what this means for your business, what it means for your employees and what it means for our economic recovery. Only a sustained communication strategy, about why this is beneficial, will make sure we can get this over the line.
I hope we can count on you.