Within the European Union, the free movement of goods and services has come to be something we take for granted. Yet anyone wishing to export goods to the United States, to offer services there or to make an investment still needs to overcome quite a number of bureaucratic obstacles. Customs duties and overlapping approval procedures, e.g. for cars or medical supplies, cost consumers on both sides of the Atlantic unnecessary money. All this is set to change. Existing hurdles hampering transatlantic trade are to be dismantled and the markets on both sides of the Atlantic opened up further.
To this end, the EU and the United States have been negotiating an agreement on a Transatlantic Trade and Investment Partnership (TTIP) since July 2013. The Federal Government supports the conclusion of an ambitious agreement which should not lower the EU’s high standards of environmental, consumer and social protection. On the contrary, the Federal Government aims to use the TTIP to agree on high standards and fair transatlantic trade regulations with a global impact.
A common economic area for 800 million people
With 800 million people, the transatlantic economic area is the largest in the world. Together, the European Union and the United States account for almost 50 percent of global production, 40 percent of the global Gross Domestic Product (GDP), one third of trade in goods and services and almost 60 percent of direct investment worldwide. Trade and services reach a daily volume of two billion euros. Two-way investments to date add up to nearly three trillion euros.
The United States is Germany’s most important export market worldwide and also the leading investment location for German enterprises.
Closer cooperation between the world’s two most powerful economic regions will generate new synergies and new momentum. Germany’s export‑oriented small and medium‑sized enterprises will benefit particularly from a comprehensive TTIP (elimination of customs tariffs and other trade barriers), as close trade relations with the United States already exist.
However, the TTIP would be much more than a mere trade agreement. It offers the chance for Europe and the United States, the two largest economic regions, with very high standards, to set standards worldwide and thus play an active role in shaping globalisation policy.
The agreement would also be “a commitment to a global world in which shared values and common economic activities can be better promoted”, as Chancellor Angela Merkel declared in Berlin in June 2013. The TTIP also offers an opportunity to bring the United States and the EU even closer politically and cement the transatlantic friendship.
Negotiations with the United States and participation within the EU
The aim is for the TTIP negotiations to be finalised while the Obama administration is still in power, if possible. The EU Commission is conducting the negotiations for the European side and the United States Trade Representative for the American side. The European Union Member States have given the EU Commission a mandate to conduct negotiations with the United States containing precise instructions for the Commission. It was published on 9 October 2014. The Member States are closely involved in the preparation of and follow‑up to the negotiations and, together with the EU Commission, dictate the EU’s negotiating positions. By the same token, business associations, non-governmental organisations, for example from the fields of the environment and consumer protection, trade unions and research institutes are regularly informed and consulted. Negotiations are expected to yield ambitious results in the following major areas:
- market access
- regulatory cooperation
- trade regulations
In the course of the negotiations the EU has strengthened the involvement of the European Parliament, the national parliaments and the Member States. For example, since the beginning of 2016 all members of the European Parliament have had access to the consolidated negotiating texts.
Once the negotiations have been concluded, the European Union Member States must approve the Agreement in the EU Council; it must also be approved by the EU Parliament and the national parliaments of the 28 Member States. The mandate to involve the Member States at all stages, as well as the need for approval from all three bodies, are sound guarantees that at the end of the negotiations, the TTIP will indeed be an agreement that sets exemplary global standards which benefit both consumers and enterprises as well as facilitating trade as intended.
The Federal Government therefore sees the TTIP as an opportunity to reform current investment protection regulations and set a global standard for modern investment protection as well as transparent dispute settlement procedures more in line with the rule of law, involving a public investment court. Significant progress has already been made on this issue: in late 2015 the EU Commission submitted and published a proposal to the United States. This envisages content‑based and – in a move away from current investor‑to‑state arbitration procedures – procedural reform.
- Protection of the regulatory sovereignty of the legislator (“right to regulate”): the Commission proposal states that laws necessary for the common good and other state measures may not be called into question by appealing to investment protection provisions.
- Investment court: in future, claims by investors are to be decided by an investment court with publicly appointed judges. Judges are no longer to be appointed by the parties to the dispute, as has generally been the case up to now, but will be appointed by the parties to the agreement; in the case of the TTIP that would be the EU, the EU Member States and the United States.
- Transparent procedures: in future, all statements of case are to be published, the negotiations will be public and directly affected third parties will be able to participate in the procedure.
- Appeals: in addition, a proper appeal mechanism with publicly appointed judges is to be put in place, which shall also ensure transparent decision‑making.
The Federal Government welcomes the EU Commission’s initiative for modern investment protection in the TTIP and other future agreements.
The TTIP is a project designed to benefit the wider population and enterprises on both sides of the Atlantic. Both the EU Commission and the Member States are therefore in close contact with the various interest groups and inform them regularly on the progress of the negotiations.
No other free‑trade agreement has been negotiated as transparently as the TTIP!
The EU Commission publishes both two‑page fact sheets in straightforward language and the EU’s detailed text proposals and position papers used in the TTIP negotiations with the United States on numerous chapters of the agreement.
For more information on how the negotiations are progressing, please visit the European Commission website: