What’s Going on with TPP and TTIP? (A Government Shutdown Special Report)

My boss, WCIT President Eric Schinfeld, was in DC this week…coincidentally (?) at the exact same time that the federal government shut down. I’m not assigning blame or anything, but strange that he arrives and Congress immediately stops working. I mean, I know he likes to have people’s undivided attention, but that is a little too far…even for him.

The government shutdown is impacting a lot of people in a lot of ways, but as trade nerds (I say that in the most loving way) I’m sure the most burning question you have is “how will the government shutdown affect TTIP & TPP negotiations?” Luckily for you, your favorite State of Trade Blog has the answers!

Timing-wise, TPP is working to wrap up negotiations, while TTIP is just gearing up, so the shutdown comes at a vital time for both negotiations. The good news is that, even though USTR’s staff is reduced to only 25%, chief negotiators are still attending the TPP meetings in Bali this week and plan to attend the TTIP negotiations in Brussels next week. Breaking news UPDATE: USTR has canceled their trip to Brussels.

As loyal State of Trade readers know, these two trade deals are immensely important to Washington’s trade economy – and if they pass, it would mean free trade with many of Washington’s top trading partners. TPP and TTIP would considerably expand the market for Washington products and services, in turn creating jobs and growing our economy. The trade deals would also enable manufacturers and retailers to improve the efficiency of their global supply chains, creating jobs here at home and empowering consumers with a wider variety of choice in the marketplace and lower cost of living. Finally, TPP and TTIP would benefit Washington’s tourism industry by making it easier for foreign tourists from these countries to visit our state.

So what’s going on with the negotiations?

The meeting of TPP chief negotiators and trade ministers began October 1 in Bali, ahead of the APEC forum that begins today (October 5th). While U.S. Trade Representative Michael Froman is encouraging negotiators to near conclusion, last month Chilean officials  announced that only six of the over two dozen chapters in the agreement have been closed, with the more controversial chapters still unresolved. For example, intellectual property rights (IPR), environmental commitments and rules for state-owned enterprises (SOEs), among many others, have apparently not been resolved. However, House Ways and Means Chief International Trade Counsel Jason Kearns stated in a recent interview that negotiators are thinking about tradeoffs on the difficult issues, meaning the end of the negotiations could be nearing. That said, it’s still looking less and less likely that a TPP deal will be officially concluded by the end of the year, especially if Korea – who has announced their intention of joining TPP – ends up entering the negotiations at this late date.

As for TTIP, the second round of negotiations will take place October 7 – 11 in Brussels. Negotiators are expected to work on finalizing the scope of the trade deal and begin delving into some complex issues, particularly regulatory cooperation for the priority sectors of chemicals, pharmaceuticals, medical devices and automobiles. UPDATE: As for now, TTIP negotiations have been put on hold due to the shutdown. Ambassador Froman and EU Trade Commissioner Karel De Gucht met earlier this week to discuss the upcoming negotiations and both announced their commitment to creating horizontal (cross-sectoral) rules for regulatory cooperation. Froman suggested that the three basic principles of transparency, participation and accountability could apply across all business sectors and improve cooperation between the U.S. and EU.

Since the news is frequently changing with regards to the shutdown and its implications for trade policy, we will keep you updated. Which reminds me, State of Trade readers: make sure you follow us on Twitter for the most up-to-date announcements and breaking trade news! That way you’ll never miss out on WCIT’s insights or important trade policy news, especially as important negotiations like TPP and TTIP (and TPA, but that’s another story…) are heating up.

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