TRADE in ACTION|Building a transatlantic marketplace

September 5, 2014

On September 8, Italian vice–minister for Trade Carlo Calenda presented the priorities of the Italian Presidency of the European Council of Ministers to the European Parliament’s International Trade Committee. He was joined by US Ambassador to the EU Gardner who was invited to speak on the state of the transatlantic relationship and TTIP in particular.

The European Parliament’s International Trade Committee is responsible for the establishment, implementation, and monitoring of the Union’s common foreign commercial policy and its external economic relations, focusing on trade agreements like TTIP. Since the implementation of the Lisbon Treaty in 2009, the European Parliament plays a pivotal role in the definition of the European Union’s trade policy, and ultimately must approve them in order for them to take effect. So, clearly, the Committee’s views matter.
In that light, vice-minister Calenda made a strong case for international engagement, talking about a new phase of globalization with new challenges and rising competition. For the EU, this new phase means a unique opportunity or a big challenge- depending on whether it chooses to be an active shaper or a simple participant in the new global order. If the EU wants to be proactive, it needs a trade policy which delivers growth and boosts the competitiveness of EU companies. For that to be realized, Calenda sees three trends that the EU needs to be aware of: First, the shrinking production cost gap between advanced and emerging economies, which creates opportunities and financial incentives to relocate production back to the West. Second, economic protectionist tendencies in emerging countries, widening the gap between protectionist and open markets. And third, the increased demand for quality manufactured goods, which creates great opportunities for European companies with strong histories of producing top-quality goods.
The hearing was largely dominated by discussions about TTIP, which Calenda called the EU trade’s top priority and a potential turning point in this new phase of globalization. In that light, he was largely unsatisfied with the sluggish pace of the negotiations; with the American electoral calendar in mind, he only sees a small window of opportunity in 2015 that must not be missed. If there is no agreement in sight by mid-term elections, he suggests the US and EU could conclude an interim agreement on the issues where there is already much common ground. He strongly countered public criticisms of the negotiations including an alleged lack of transparency and a potential lowering of food and health standards, and promised to strive for more transparent negotiations in the future.

Ambassador Gardner wholeheartedly agreed with Calenda on the importance of TTIP and its potential to promote growth and jobs, to shape the rules on international trade, and the opportunity to revitalize the transatlantic relationship geopolitically. He made a strong case for the timely conclusion of TTIP, but contrary to Calenda, he does not see the necessity of an interim agreement; he still believes the two sides should seek a comprehensive agreement. He also reassured the Parliament that the Obama administration will eventually secure Congressional Trade Promotion Authority. Gardner underlined that the continued slow recovery in Europe calls for measures that induce growth, which strengthens the case for TTIP as a deficit-neutral stimulus package to kick the economy back into gear.

Despite the trade centric nature of the hearing, both speakers underlined the importance of further European integration and closer transatlantic cooperation for not purely economic but also geopolitical considerations. Both speakers are aware that if the US and EU want to continue to promote their values and set global international standards in joint global leadership, TTIP is an opportunity that should not be missed.

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