miércoles, 23 de julio de 2014

#TTIP and the #digital economy

What is the TTIP?
The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement that is presently being negotiated between the European Union and the United States. It aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US. The rationales behind this eventual agreement are the following figures:
·        European Union (EU) and the United States (US) account for nearly half of world GDP and 30 percent of world trade
·        Each day, goods and services worth $2.7 billion/€2.0 billion are traded bilaterally between US and EU

The idea of the TTIP has its roots in the work of the United States-European Union High Level Working Group on Jobs and Growth (HLWG). The Working Group was tasked in November 2011 to identify policies and measures to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness. The HLWG analysed during more than a year different options to strengthen the trade relationship between the US and the EU. In its final report dated on February 2013, the HLWG concluded that a comprehensive agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and contributes to the development of global rules, would provide the most significant mutual benefit for the US and the EU. The HLWG proposed to explore three broad areas to be tackled in the negotiations:
a)   market access
b)   regulatory issues and non-tariff barriers
c)    rules, principles, and new modes of cooperation to address shared global trade challenges and opportunities

The expectations of the European leaders, according with the Conclusions of the European Council held June 26th, is to end-up the negotiations by 2015.  

The negotiation of the TTIP

The negotiations of the TTIP started in February 2013, just after the HLWG released its final report. In a joined statement, the EU and US leaders declared that each part would initiate the internal procedures necessary to launch negotiations. The Council gave the European Commission (EC) a mandate to to enter into formal bilateral trade negotiations with the  US on behalf of the EU in June 2013. This mandate is not publicly available for the sake of protecting the EU interest. Nevertheless there is a public commitment of transparency in the negotiations of the European Commission.

On behalf of the EU, the negotiations are chaired by the EC Trade Commissioner[1] with the support of the DG TRADE. There have been five rounds of negotiation until May 2014.

The EC has set up and Special Advisory Group in order to maintain a continuous dialogue with the main stakeholders. The group held its first meeting in March 2014 and has had two more meetings in May and June 2014[2].

In the eventual case an agreement is reached, both the European Parliament and the Council will need to approve the outcome of the negotiations before the agreement becomes binding for the EU. Even a movement has started in some national Parliaments demanding a explicit approval of the treaty in each Member State before it enters into force.


ICTs and the digital economy in the TTIP

There is not yet a public and comprehensive position of the EU regarding the digital economy within the TTIP. The EC has published two packages of position papers. Neither in the first package nor in the second package have been published an specific paper with the EU position on ICT or digital economy issues. Nevertheless, as we it is highlighted later, the position papers on regulation and TBT include important provisions for the digital economy. It is worthy also to highlight the absent of experts on digital issues in the EC Special Advisory Group.

There could be several explanations to the absence of an EU position paper on ICT within the TTIP on spite of the growing importance of digital issues on our daily life. One plausible explanation is that ICT is not among the top five product or services in the perceived NTB index, as it is shown in the table below taken from an study of “BBVA research”.








Ahead of the first round of negotiations (June 2013) the EC (DG CONNECT and DG TRADE) invited stakeholders to share in a meeting their views and expectations on what the TTIP could deliver for the ICT sector[3]. The report of the meeting published by the EC revealed a number of issues which raise questions and concerns in stakeholders. Among the list of concerns raised in the meeting are:

  • Difficulties in accessing the US market due to existing rules and legislation
  • The importance of ensuring the TTIP is as technologically neutral as posible regarding  the audiovisual sector
  • The need for creating a set of cybersecurity principles to which both parties in the TTIP could sign up to
  • A support of the European Commission position in favour of prohibiting data localisation requirements for servers


The meeting between the EC and the stakeholders was held just after the first revelations of the Snowden case were published. The report reflects some debate on this issue. Since then, the Snowden case has been one of the axis of the public debate on the treatment of the digital economy issues within the TTIP.

In spite that has not been published an oficial EU Position on ICT within the scope of the TTIP, there are signals that the digital issues has been part of the negotiations rounds. To be concrete, ICT has been on the table at least in the second and fourth round of negotiations according with the information released by the EC press office. The debate has been on regulatory issues regarding ICTs and the respective approaches on telecommunication and e-commerce services.

The mention of ICTs in connection with the regulatory issues under negotiation on the TTIP is coherent with the EU position paper on regulatory issues. This paper announces that the horizontal chapter of the TTIP covering regulation would include commitments regarding ICTs. The objective of the horizontal chapter regarding regulation is to eliminate, reduce or prevent unnecessary “behind the border” obstacles to trade and investment. For achieving this long-term goal the TTIP will include mechanisms for
  • Promoting cooperation between regulators
  • Promoting the adoption of compatible regulations
  • Achieving increased compatibility/convergence in specific sectors, including through the recognition of equivalence and mutual recognition
  • Affirming the particular importance and role of international disciplines (regulations, standards, guidelines and recommendations) as a means to achieve increased compatibility

Regarding the ICT part in the regulatory component of the future treaty, the last piece of new we have is inside a note published on July 11th by the European Commission. According with this note, "the two sides have so far exchanged analysis on some specific topics, such as e-health, encryption, e-accessibility, enforcement and e-labelling". 




Other EU position papers published include provisions of great importance to ICTs and digital issues. An example is EU position paper on technical barriers to trade (TBT). Following the recommendations of the HLWG, it looks that the TTIP would include an ambitious TBT chapter to
  • Yield greater openness, transparency, and convergence in regulatory approaches and requirements and related standards development processes
  • Reduce redundant and burdensome testing and certification requirements
  • Promote confidence in our respective conformity assessment bodies
  • Enhance cooperation on conformity assessment and standarisation issues globally

Due to central role of standards in the digital economy, this chapter would define the future of the European ICT industry.


Conclusions


Scattered information on digital economy issues under negotiation in the TTIP appeared from time to time in the media. A non-exhaustive collection of examples are:

ICTs will be the fabric of our future society. In this future, it looks US and EU will form the biggest area of free trade in the world. The strength of the ICT industry in the USA (7,1% of US GNP) is far bigger than the strength of ICT industry in the EU (4,1% of GNP). The TTIP will open a new world of opportunities and risks for the European digital players. It looks as an all or nothing game where European ICT industry plays the role of David against Goliath. It is worrisome the lack of information of the EU position on the digital economy within the TTIP in comparison with the situation in other sectors. Let us hope this absent of information  is a consequence of the confidentiality of the TTIP talks and not a neglection of a sector critical for a sustainable Europe. Specialy worrisome is this lack of a known EU position when it looks that there is the possibility to have a complete digital chapter in the treaty.






[1] Karel De Gucht was the EC Trade Commissioner when the negotiations were launched
[3] It hs not been found a public list of the stakeholders that atended this meeting

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