European Parliament Report: Economic Regulations with the US

Regulatory reform will undoubtedly be the most ambitious and complex portion of the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations between the European Union and the United States. The European Parliament held a hearing on the matter, opening the floor for debate between policy experts, academics, and key stakeholders. Each piece of testimony acknowledged that current regulatory divergence, be it technical barriers to trade or regulatory incoherence, is extremely problematic. The participants also acknowledged that overcoming these differences will be no small feat. As noted by the Chair of the European Parliament Committee on International Trade, Vital Moriera, neither the EU nor the United States have ever negotiated with partners that have such advanced procedures in place. Never before have the procedures that are to be negotiated been so significantly different.

Given the challenges, it appears experts on both sides of the Atlantic have agreed on seemingly realistic goals for these negotiations. The European Union’s Chief TTIP Negotiator Garcia Bercero and Indiana University Professor (and former member of Office of Management and Budget) John Graham stated that an agreement should achieve harmonization, mutual recognition, and convergence of existing and future regulations.  This requires an understanding that there will not be a “one-size-fits-all” solution; rather decisions will need to be made sector by sector, regulation by regulation.

Representatives from the Transatlantic Consumer Dialogue, an EU consumer organization, and the European Trade Union Confederation, a workers organization, brought forward common criticisms and concerns of these regulatory reform negotiations. First and foremost, there is widespread apprehension about an agreement resulting in the lowering of standards and protections for consumers and producers. Business Europe, a European business organization, and Garcia Bercero both asserted that regulatory coordination does not imply a race to the bottom, and that the ability to self-regulate is going to be maintained. Another widespread concern is a lack of transparency in the negotiations. Both the consumer and worker organizations requested access to negotiation documents, so that they are able to provide input.

If negotiations successfully produce an agreement, the work on regulatory convergence will not be complete. Graham argues that success of the agreement moving forward relies on both the European Parliament and the US Congress developing procedures to monitor the progress of regulatory cooperation to address areas of success as well as areas that need improvement. To that end, Garcia Bercero stated that any agreed upon legislation must maintain flexibility, must be aliving agreement.

The economic and political implications of regulatory reform under TTIP are significant, and the fact that policy makers have opened debate on the issue early in the negotiation process is promising. Success will ultimately require that neither side impose their system on the other, but rather experts find a way to make their systems compatible.

Jordan Smith is an intern with the Atlantic Council’s Global Business and Economics Program.

Image: (Photo: Flickr/McMay/CC License)