TTIP: EU Trade Commissioner Elect Malmström Clarifies Public Services Exemption from Trade Negotiations

Cecilia Malmström, the Commissioner-designate for Trade, dealt impressively with a deluge of questions about the EU's free trade negotiations at her European Parliament hearing on 29 September, acknowledging widespread scepticism but voicing hope that a resolution could be found.

Proceedings were dominated by the free trade agreement currently under discussion between the EU and the US – the Transatlantic Trade and Investment Partnership (TTIP) – with Malmström nodding to the difficulties she would face in convincing its many critics of its necessity, while also talking up the potential benefits.

The Swedish MEP said that as well as economic benefit, the agreement can help strengthen Europe's strategic hand on the global stage by uniting the world's two most powerful trading powers. However she warned of the importance of securing a broad agreement, rather than a watered-down version, with officials and campaigners on both sides of the Atlantic keen to exempt significant sectors from the discussions.

Malmström confirmed Europe's audiovisual sector is not up for discussion, in what can be viewed as a concession to the French government, which has long since lobbied for its exclusion.

She also moved to clarify what has been the hot potato since negotiations began in Enniskillen last year: public services.

On the day negotiators reconvened in Maryland, Malmström said public services, including health, education and water management, were not on the agenda and that there was no obligation for national governments to include such sectors in order to enjoy the benefits of TTIP. However, any of the EU's 28 member states are free to bilaterally negotiate the inclusion of their own public services in the agreement with the US.

Earlier in September at a Westminster press briefing, the UK's Trade Minister Lord Livingston had confirmed the UK would not push for public services' exclusion because it would not be impacted by TTIP. As IBTimes UK went to press, the government had yet to respond to queries as to whether it would take the route of bilateral negotiation with the US.

Referring to the controversial investor-state dispute settlement (ISDS) clause that theoretically allows private companies to bring lawsuits against national governments for loss of profits, Malmström said she wished for it to be included in a more open and transparent format than it has been in any of Europe's previously negotiated agreements.

In a comment released prior to her hearing, Malmström appeared to refute the need for ISDS, saying: "No limitation of the jurisdiction of courts in the EU member states will be accepted in this context; this clearly means that no investor-state dispute settlement mechanism will be part of that agreement."

She later retracted the statement, taking to social media to claim "the sentence everybody is so excited about on ISDS/TTIP is not written by me in the final version of my answer to the EP [European Parliament]".

CETA

Last week, the finer points of the Comprehensive Economic and Trade Agreement (CETA) were agreed in Ottawa, with the free trade agreement now due to go through "legal scrubbing" and translation, before being voted on in the European Parliament.

This contains a form of ISDS and Malmström spoke of her concern that public opposition would force the clause to be removed, saying it provides the requisite protection to European companies doing business in Canada. However she said that rule of law should trump the interests of investors in every case.

"It would be unfortunate to take ISDS out of CETA," she said, adding that if negotiators tried to dismantle any part of the agreement, the whole thing could "collapse".

She was adamant that under TTIP, no food groups currently banned in the EU would be permitted to be imported (such as hormone beef).

The main beneficiaries of the agreement, Malmström said, would be small and medium-sized businesses that would capitalise on regulatory harmony, meaning barriers to market entry were lowered significantly, as well as the consumer, who would benefit from more choice.

She was clear in her view, however, that even in the case of the removal of red tape and regulation, there would be no lowering of standards.

"Not in TTIP nor any other agreement will we lower our standards," she said. "We will not sacrifice the EU model for the benefit of free trade."

CETA has been described by opponents of free trade as "a Trojan horse for TTIP", but Malmström said she thought TTIP would be much more difficult to finalise than its Canadian equivalent.

EU negotiators managed to attain 145 geographical indications – a name or sign used on certain products that corresponds to a specific geographical location or origin (such as a town, region, or country, such as Parmesan or Champagne). However, she said that in the US discussions it is unlikely that European negotiators will be nearly so successful.

Malmström admitted the mixed agreement format of EU ratification was a frustration. Any resolution on CETA or TTIP must be unanimously ratified by the 28 individual national parliaments. Incumbent Trade Commissioner Karel De Gucht is currently exploring ways of bypassing this through the Court of Justice and Malmström said she would continue to pursue this pass, should her appointment be finalised.

Other Business

In a rare diversion from discussions on CETA and TTIP, Malmström said the EU was not planning to introduce any sanctions on Israel, in addition to the ban on the import of goods made in the Occupied Palestinian Territories. However, there were no plans to draw up further trade agreements with Israel either.

When quizzed on Ukraine, she said only the EU and Ukraine had the power to redraw any parts of the country's signed agreed Association Agreement and Russia had no business exerting pressure on Ukraine to do so.

The current situation with Ukraine and Russia was "unique" but Malmström was hopeful that at some point in the next few years, things could defuse to the extent at which the EU and Russia were content to "sit down and see what new agreements can be made".

A free trade agreement with the Asian trading bloc is an "ultimate priority", Malmström said, while she also voiced her hopes that an investment agreement with China, either on a bilateral or pluri-lateral basis, was attainable.