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Saturday 22 October 2016

No definite deadline in sight for a TTIP deal

Economic view

Alan Matthews

Published 25/11/2015 | 02:30

Alan Matthews
Alan Matthews

The Transatlantic Trade and Investment Partnership, or TTIP, is the name of the free trade agreement currently being negotiated between the US and the EU.

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The negotiations were launched in June 2013 and aim at an ambitious agreement that would eliminate most tariffs on trade across the Atlantic, including agricultural commodities and food.

Yet it appears there is still a way to go. Despite 11 negotiating meetings so far, there isn't even a definite deadline for their completion yet.

Even if the negotiators reach an agreement, ratification by the US Congress on one side, and the EU Council, Parliament and all member states on the other side, is not a foregone conclusion.

Simulation studies suggest that successfully concluding the TTIP negotiations would have large positive effects for the Irish economy. These effects would mainly benefit the manufacturing sector, with limited impacts for the agricultural sector.

Within the agrifood sector, there would be winners and losers. TTIP is expected to lead to increased exports for Irish dairy products and processed foods, but if tariffs are removed, there would be increased competition for Irish beef and other meats.

These products will likely be declared sensitive products and market-opening will take the form of increased access for limited quantities, rather than the elimination of tariffs.


However, eliminating tariffs will not necessarily lead to increased trade because of differences in regulatory standards between the US and the EU.

For example, eliminating the tariff on imports of poultry meat, which can be as high as 40pc or more on some cuts, would not necessarily lead to increased imports from the US because US poultry is produced differently than in the EU.

In the US, chicken carcases are washed in a hyper-chlorinated water solution to kill bacteria before they are sold whereas, in the EU, only water can be used. Dairy products are another example where US regulations could restrict EU exporters.

Conversely, there are many examples where US exporters claim that EU regulations make it impossible to export to the EU - the classic being hormone-fed beef.

Thus, there is an interest on both sides to make regulations compatible where this is possible. When the TTIP negotiations started, the harmonisation of regulations was announced as one of its main objectives.

Many in Europe thought that this would mean US products would be allowed to enter the EU market even if they did not meet EU standards, or that EU standards would have to be adjusted to US ones.

Fears were fanned that TTIP would open the gates to imports of hormone-treated beef, chlorine-washed chicken, and US genetically-modified foods.

In the light of these fears, the EU negotiating text on food regulations is reassuring. The draft puts a lot of emphasis on information sharing, consultation and joint examination between the US and EU regulatory authorities. However, any changes in regulations can only be made through the normal legislative process in the EU and not through backroom trade deals.

This has also been repeated by successive Trade Commissioners. The draft text and political assurances may help to defuse some of the criticisms of TTIP in the EU. While this may help the ratification of an eventual agreement in the EU, where there is a clear majority in favour, paradoxically it may make ratification in the US more difficult if the US side feels there is little new market access to be gained.

Alan Matthews is Professor Emeritus of European Agricultural Policy at Trinity College Dublin

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