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EURO–LATIN AMERICANPARLIAMENTARY ASSEMBLY

RESOLUTION:

Repercussions of the negotiations on theproposed Transatlantic Trade andInvestment Partnership (TTIP) and theproposed Trans-Pacific Partnership (TPP)on EU and LAC trade policieson the basis of the report by the Committee on Economic, Financial and Commercial Affairs

Co-rapporteurs: Luis Fernando Duque García (Parlandino)Nicola Danti (European Parliament)

Thursday, 21 September 2017 – El Salvador

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EUROLAT – Resolution of 21 September 2017 – El Salvador

on the basis of the report by the Committee on Economic, Financial and Commercial Affairs

Repercussions of the negotiations on the proposed Transatlantic Trade and InvestmentPartnership (TTIP) and the proposed Trans-Pacific Partnership (TPP) on EU and LACtrade policies

The Euro-Latin American Parliamentary Assembly,

– having regard to the European Parliament resolution of 8 July 2015 containing theEuropean Parliament’s recommendations to the European Commission on thenegotiations for the Transatlantic Trade and Investment Partnership (TTIP)(2014/2228(INI)),

– having regard to the resolution on ‘Trade aspects of the various EU-LAC negotiationscurrently being conducted’ adopted by the Euro-Latin American Parliamentary Assemblyduring the Plenary Session of 22 September 2016 in the city of Montevideo in the EasternRepublic of Uruguay,

– having regard to the European Union (EU) negotiating directives for the TTIP betweenthe EU and the US, unanimously adopted by the Council on 14 June 2013 and declassifiedand made public by the Council on 9 October 2014,

– having regard to the Trans-Pacific Treaty (TPP) signed on 4 February 2016 by thegovernments of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, NewZealand, Peru, Singapore, the US and Vietnam,

– having regard to the US Administration’s Trade Policy Agenda announced on 1 March20171,

– having regard to the US Presidential Memorandum regarding US withdrawal from thenegotiations and from the TPP issued on 23 January 2017,

– having regard to Articles 168 to 191 of the Treaty on the Functioning of the EuropeanUnion (TFEU), and in particular to the precautionary principle enshrined in Article191(2),

– having regard to the US-EU Joint Report on TTIP Progress to Date, published on 17January 2017,

– having regard to the joint statement of 20 March 2015 by Commissioner CeciliaMalmström and US Trade Representative Michael Froman regarding the exclusion ofpublic services in EU and US trade agreements,

– having regard to the Commission communication entitled 'Trade for All: Towards a moreresponsible trade and investment policy’ (COM(2015)0497) of 14 October 2015,

1 https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2017/2017-trade-policy-agenda-and-2016

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– having regard to the Commission communication of 25 November 2014 on transparencyin TTIP negotiations (C(2014)9052), to the Commission decisions of 25 November 2014on the publication of information on meetings held between Members of the Commissionand organisations or self-employed individuals (C(2014)9051) and on the publication ofinformation on meetings held between Directors-General of the Commission andorganisations or self-employed individuals (C(2014)9048), to the judgments and opinionsof the Court of Justice of the European Union (C-350/12 P, 2/13, 1/09) on access todocuments of the institutions and the decision of the European Ombudsman of 6 January2015 closing her own-initiative inquiry (OI/10/2014/RA) concerning the Commission ondealing with requests for information and access to documents (transparency),

– having regard to the Commission report of 13 January 2015 on investment protection andinvestor-to-state dispute settlement (ISDS) in the TTIP (SWD(2015)0003),

– having regard to the Final Inception Report of 28 April 2014 by ECORYS for theCommission entitled ‘Trade Sustainability Impact Assessment (Trade SIA) in support ofnegotiations of a comprehensive trade and investment agreement between the EuropeanUnion and the United States of America’,

– having regard to Article 16 of its Rules of Procedure,

Introduction

A. whereas, at the multilateral level, the World Trade Organisation (WTO), in which the EUand the Latin American and Caribbean (LAC) countries are active participants, providesthe basis for an open, predictable, rules-based, transparent, democratic and inclusivetrading system;

B. whereas, since its creation in 1995, the WTO has helped to reinforce stability and the ruleof law, boosted trade relations and favoured participation of the least developed countries(LDCs) and developing countries in international exchanges;

C. whereas, owing to its multilateral nature, the WTO has also faced serious difficulties inreaching successful results at the pace required to respond to the demands of an ever-changing globalised world, and the slow progress of the Doha Development Agenda(DDA) has led WTO members to negotiate bilateral, regional, bi-regional and sectoralmultilateral agreements in order to make progress on the trading agenda and complementmultilateral rules; whereas work still remains to be done on the deals reached in Bali inDecember 2013 and Nairobi in December 2015; whereas the Trade FacilitationAgreement (TFA) entered into force on 22 February 2017;

D. whereas agreements are in force between the EU and Cariforum, Central America,Colombia, Ecuador and Peru and proposals have been put forward for modernising theagreements with Mexico and Chile, while the negotiations between the EU and Mercosurare ongoing;

E. whereas these negotiations represent a new generation of mega-regional trade agreementswhose novelty stems from the systemic impact that the removal of non-tariff barrierscould have, as well as its potential to create global standards in a range of areas(competition, subsidies, labour rights) that could, given the scale of trading partners’demographic, economic and trade indicators, have significant impact and externalities innon-partner countries;

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F. whereas greater participation in global value chains requires greater convergence betweenthe various economic integration projects in force;

The context of the Transatlantic Trade and Investment Partnership (TTIP)

G. whereas TTIP was announced in the US on 12 February 2013 in the traditional State ofthe Union address by US President Barack Obama, and in June 2013 the EU and the USannounced the official start of negotiations, anticipating an agreement that would createa market of around 800 million inhabitants with high purchasing power and almost halfthe world's wealth; whereas the TTIP negotiations have received significant attention inthe last two years, creating expectations but also scepticism;

H. whereas the European Parliament has been deeply involved in the launching andmonitoring of the negotiations, adopting its resolution on the TTIP negotiations in July2015, in which it expressed its support for the negotiations, as well as by presentingrecommendations to the Commission, including the need to have a high level oftransparency, maintain high labour, environmental and food security standards and endthe Investor-State Dispute Settlement (ISDS) mechanism, which is being replaced with asystem based on an Investment Court (ICS);

I. whereas the European Commission responded to these and other demands with theTransparency Initiative and the communication ‘Trade for All: Towards a moreresponsible trade and investment policy’, undertaking to respect the EuropeanParliament's position, and it has also launched its proposal to create a MultilateralInvestment Court (MIC); whereas in the short term progress has already been made withthe new ICS to address the main problems arising from the current arbitration system;whereas further elements of ICS need to be improved such as the nomination of judgesand their remuneration, a complete set of rules of ethical conduct and the sanctionmechanism in the event of non-compliance with those rules;

J. applauding the fact that the Council declassified and published the European directivesfor the TTIP negotiations in October 2014, and that the Commission has constantlypublished on its website information on the rounds and meetings held by all Members ofthe European Commission with representatives of interested parties, as well as the EUtexts for all the negotiations;

K. whereas, furthermore, for the first time in European history, all Members of the EuropeanParliament have access to the negotiating documents, and the democratic process hasbeen strengthened through the mandatory procedure whereby Parliament must approvesuch trade and investment agreements before they can be signed and enter into force;whereas it is possible for democratic scrutiny to be exercised by national parliaments ifthey are assessed as mixed agreements;

L. whereas, regardless of the outcome of the TTIP negotiations, the discussions havehighlighted the need to jointly face the uncertainties of a changing world through thereinforcement of existing ties with transatlantic partners sharing similar political, civil,social and economic values;

Implications of TTIP for EU-LAC relationsM. whereas the potential effects of TTIP would stem partly from changes in the tariffs for

goods (which are already moderate in most sectors, except in those labelled as sensitive,

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but are, nevertheless, of major economic relevance given the sheer volume of tradebetween the two trading blocs), but most importantly from the framework for services,investment, public procurement and regulatory convergence; whereas its finalarchitecture, the calendar for negotiations and for its entry into force, and macro-economic factors independent from the content of the agreement are also major issuesthat can affect the way in which other trade relations evolve and hence EU-LAC relations;

N. whereas negotiations are currently frozen even though it is recognised that much progresshas been achieved during the 15 rounds of negotiations, with talks focusing on three mainareas: (1) market access (for goods, services and procurement) including agriculture,energy and raw materials; (2) regulatory cooperation and tackling non-tariff barriers; and(3) rules, including intellectual property rights, investment and sustainable development;

O. whereas the EU and the US have concluded or are re-negotiating/modernising a numberof free trade and/or investment agreements — including the North American Free-TradeAgreement (NAFTA); whereas it is important for LAC countries to follow thedevelopment of TTIP negotiations so that they will be able to foresee possible changes,and embrace the collateral effects, potential and opportunities that an EU-US agreementcould also provide for them;

P. whereas the global economy is interdependent given the ever greater complexity of globalvalue chains, and action to remove, harmonise or reduce regulatory barriers wouldimprove market access for LAC producers who currently have to comply with two setsof standards and regulations, both EU and US; whereas improving regulatorycompatibility could be expected to have a striking direct positive impact on these LACcompanies;

Q. whereas, at the same time, it can also be expected that consumers and citizens from LACcountries could benefit, for example, from a common and high level of labour,environmental and food safety standards that could be established within TTIP; whereasmacro-economic improvement in the EU and the US would contribute very positively tothe global economy, including LAC owing to its strong ties with both areas;

R. whereas the impact of TTIP on Latin America and the Caribbean may be beneficial forproductivity and job creation, provided it does not create additional quasi-tariff barriers;

Implications of the Trans-Pacific Partnership (TPP)

S. whereas, while the TTIP negotiations are on hold, the government of the US issued anexecutive order on 23 January 2017 withdrawing the US from its signature andnegotiations while expressing the will to proceed, where necessary, bilaterally; whereasthe TPP agreement embracing Australia, Brunei, Canada, Chile, Japan, Malaysia,Mexico, New Zealand, Peru, Singapore and Vietnam, which could be joined by othercountries such as Colombia, Indonesia, the Philippines, South Korea, Taiwan andThailand might still be ratified by the other counterparts, although it has lost a major one;

T. whereas, since the US already has free-trade agreements with most of the countriescovered by TPP, including the LAC ones, TPP could be seen as a sign of the wish to openup towards Asia as well and TPP could serve, like TTIP, to harmonise existing free-tradeagreements and create new dynamics;

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U. whereas LAC have an interest in boosting trade, diplomatic and cooperation relationswith Asia, given its current significant role in global changes in production, trade,investment and world finance, and this will entail creating a solid framework foreconomic cooperation;

V. whereas, even though its objective is to liberalise trade in most goods and services byeliminating or substantially reducing tariff and non-tariff barriers to trade and investmentamong the partner countries, TPP is a modern agreement with a regional focus onpromoting the development of production chains that also addresses other areas such asintellectual property rights, services (including cross-border trade and market access forbusinesses), public procurement, investment, dispute settlement, trade remedies, rules oforigin, competition (including state-owned enterprises and monopolies),telecommunications, e-commerce, labour and environmental standards, technical barriersto trade, provisions for SMEs, customs and trade facilitation, sanitary and phytosanitarymeasures, transparency and the fight against corruption, while also covering cooperationand scientific and technological exchange and addressing the concerns of new industries,such as green technologies, nanotechnology and the digital economy;

W. whereas the impact that TPP may have on the rest of LAC and the EU is hard to predict;whereas it has been suggested that trade diversion from TPP could negatively affect EUtrade; whereas, however, such an impact will depend on the overall internationalsituation, the number and identity of countries that will ratify it, the real scope of theagreement, the ability of operators to adjust and the pace and number of deals that the EUwill have concluded by the time TPP enters into force;

1. Concludes that, given the current landscape, the exact effects of both TTIP and TPP ontrade between the EU and LAC are still difficult to predict at this stage;

2. Reiterates its full commitment to the WTO and the multilateral agenda, but believes thatthe EU and LAC should support projects to boost competitiveness, stimulate growth,facilitate investment, create qualified jobs and bring traditional partners on both sides ofthe Atlantic, who share long-lasting cultural and historical bonds, even closer together;

3. Is keeping a very close eye on the US’s new trade policy, which may have a major impacton world trade and relations between the US, LAC and Europe; hopes that the US willcontinue to be a trustworthy and strong trade ally of the EU and LAC;

4. Regrets the decision of the US to block the renewal of G20 members' commitment tooppose all forms of protectionism in the final declaration at the G20 High-LevelSymposium on 17-18 March 2017 in Baden-Baden;

5. Takes the view that, despite the uncertainties surrounding TTIP and TPP, this could offeran opportunity to deepen and strengthen even more EU-LAC relations that will require astrong commitment but which can yield long-lasting positive economic and geopoliticalresults;

6. Underlines the need to integrate the LAC economies in global value chains, based on acircular economic model; exhorts the countries in both regions to promote reformsleading to greater participation in global value chains, encouraging greater convergencebetween the various economic integration projects in force;

7. Reiterates its commitment that, if negotiations are to continue, TTIP will be based on

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values, principles and aims that the EU has enshrined in its founding Treaties and respondto the demands made by the European Parliament in its resolutions, as an expression ofthe will of citizens;

8. Welcomes the fact that the new generation of trade agreements seek not only to promotetrade in goods and services and investment flows but also incorporate provisions onhuman rights, environmental and social standards, governance, transparency, the fightagainst corruption, protection for workers, consumers and the environment, businessfacilitation and action to promote SMEs; reiterates that LAC and EU trade policies shouldsimilarly contribute to an international economic order based on sustainable development;points out that an appropriate sanctions-based mechanism should be included in suchagreements to enhance the effective enforceability of provisions on trade, labour and theenvironment;

9. Reiterates that the EU and LAC should strongly commit to sharing a common vision byconsolidating the transatlantic bridges (under their various forms) and showingwillingness to coordinate efforts, wherever possible, to render the different projects(bilateral, regional, plurilateral and multilateral) feasible and compatible, and to achievecommon sustained growth and progress;

10. Urges that work continue on the optimum implementation of existing trade agreementsbetween the EU and LAC countries; welcomes the window of opportunity recentlycreated thanks to the political scenario, that has led to accelerating Mercosur negotiationsand the modernisation of the EU-Mexico and EU-Chile agreements;

11. Points out that the EU and LAC share not only common interests but also common valuesand roots and urges that these should serve as a basis for coordinating parallel efforts topursue a fairer, more equitable, more effective and more transparent international tradesystem;

* * *

12. Instructs its Co-Presidents to forward this resolution to the European Parliament, theCouncil of the European Union and the European Commission, the European ExternalAction Service (EEAS), the parliaments of the EU Member States and all the LACcountries, the Latin American Parliament, the Central American Parliament, the AndeanParliament, the Mercosur Parliament, the Secretariat of the Andean Community, theCommittee of Permanent Representatives of Mercosur, the Community of LatinAmerican and Caribbean States, the Permanent Secretariat of the Latin AmericanEconomic System, and the secretaries-general of the Organisation of American States,UNASUR, the WTO, the United Nations and its specialised agencies.