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Statement by Assistant USTR Dan Mullaney at the 14th Transatlantic Trade and Investment Partnership Negotiating Round

Statement by Assistant USTR Dan Mullaney at the 14th Transatlantic Trade and Investment Partnership Negotiating Round

Brussels, Belgium
July 15, 2016

*As Delivered*

Before giving my impressions of our negotiations this week, I would like, on behalf of all my U.S. colleagues, to thank Ignacio and his European Commission team for hosting us so graciously for this 14th round of T-TIP negotiations here in Brussels.  It is always pleasure to come back to the beautiful city of Brussels.

And before noting some of the remaining challenges, I want to point out that much has been accomplished in our negotiations of T-TIP so far, which, as Ignacio said, began exactly three years ago this week when we held our first T-TIP negotiating round in Washington. 

Looking back, much has been accomplished.  We've got text on the table in nearly all of the negotiating areas and we're now deep into the process of resolving differences and negotiating agreement text.

Let me highlight for you a few examples of what we've achieved so far, including during this week:

-- We've already agreed to eliminate duties on 97% of our tariff lines and we continued to work this week on increasing the number of tariff lines that will be eliminated immediately upon entry into force of the agreement or phased out more quickly.

-- We're negotiating rules of origin that are easy to understand and use, and which will ensure that T-TIP's benefits go to our own producers within the transatlantic area.

-- We're agreeing on measures to reduce red tape and delays at our borders, like electronic filing of customs documentation.

-- We're developing a framework for regulatory cooperation to facilitate greater compatibility in future regulations.

-- We're adopting provisions that will minimize unnecessary and duplicative testing and inspections of manufacturing facilities and products, beginning, for example with pharmaceuticals, which will make it easier for manufacturers to have products destined for the other market to be tested locally.

-- We're negotiating provisions that align procedures for sanitary and phytosanitary audits and import checks.

-- Beyond these cross-cutting regulatory elements, we're developing provisions for a number of specific sectors – including autos, pharmaceuticals and medical devices.  We made progress this week in advancing this work.  We now have proposed text on the table for most sectors and we will be tabling the remaining texts in the coming weeks.

-- We're negotiating measures that will make it easier for professionals – beginning with architects and auditors – to work in both markets.

-- We're incorporating obligations to protect the environment and fundamental labor rights, and discussing how we can work together to raise environmental protections and labor standards in other countries.

-- We've agreed on a dedicated chapter in T-TIP focused on small and medium-sized enterprises, which, among other things, will deepen cooperation on SME issues and enhance on-line information to assist SMEs in navigating the transatlantic marketplace.

-- We're discussing the importance of transparency and due process in trade defense procedures and ways to make the proceedings more publicly accessible.

-- We're working on further opening our respective government procurement markets, building on the commitments that we've already made in the recently re-negotiated WTO Government Procurement Agreement.  In TTIP, the United States has already put forward the most ambitious procurement offer it has ever made in any trade agreement, including in TPP.   

During our discussions this week, continuing into next week, both we and the EU have submitted a significant number of new texts.  By next week, every group will have met, coming closer to agreed language in all of the chapters.  For this round, we put forward proposals on trade defense, financial services, sectors, textiles, state-owned enterprises, good regulatory practices and legal and institutional provisions.

All of this represents significant progress toward the kind of ambitious, comprehensive agreement we set out to achieve three years ago.  The fact that I can identify so much progress reflects a very important point -- we both have much to gain if TTIP succeeds.

But to complete this work, much remains to be done this year, and as in any trade negotiation, the most difficult issues are usually the last ones to be resolved.

-- For instance, it is urgent that we start discussions on the remaining 3% of tariff lines.  The U.S. and the EU agreed at the outset that TTIP's goal would be to eliminate all tariffs.  And that remains the U.S. goal.  As with every issue in this negotiation, the U.S. has been actively seeking engagement.

-- But our ambition in T-TIP goes far beyond tariffs.  In order to reach our goal of a high- standard agreement, we still need to make more progress in tackling technical barriers, like the ones that currently prevent U.S. laboratories from testing products for the EU market and that prevent U.S. stakeholders from participating in European standards-development, both of which the United States already allows EU laboratories and EU stakeholders to do for the U.S. market.   

-- Now that Privacy Shield is coming into force, we look forward to having a full discussion of electronic commerce obligations on data flows and the location of computing facilities.  Our inability even to discuss these obligations, which are vital to digital trade, has been unfortunate.

-- On labor and the environment, the United States is committed to binding and fully enforceable provisions – on par with commercial provisions.  This underscores the high priority we give to these issues.

-- Facilitating trade by our small and medium-sized enterprises is a top goal of T-TIP and we believe that an increase in the de minimis level at which shipments are subject to duties and customs formalities and fees is one of easiest and best ways to do that and a practical step of enormous significance in the real economy.

-- Finally, we believe that a 21st century trade agreement must contain significant obligations with respect to trade in services, which account for the overwhelming share of economic output for both economies.  Given the importance of this sector to both of our economies -- and the fact that, in practice, both our services and investment markets are quite open -- progress here has been noticeably and painfully slow.

Our services negotiators, who were in Geneva this week for negotiations on the Trade in Services Agreement, will be meeting here in Brussels next week to continue their discussion of our respective market access offers and texts in T-TIP, beyond financial services, for which we received an offer just this week.  Our view of the urgent need for rapid progress on services and investment market access is well-known, and we will hope for that progress next week.

So, in conclusion, let me underscore that we have come a long way in our T-TIP negotiations, and by the standards of international trade negotiations, we have traversed that ground quickly.  We believe fundamentally that an ambitious T-TIP agreement is achievable in 2016, and that remains the goal of the United States.

But completing these negotiations will require significant political will and a creative, pragmatic approach to problem-solving on both sides to get this done.  As President Obama emphasized at the Hannover trade fair in April and again last week in Warsaw, the United States - for its part - is prepared to make every effort to complete the negotiations this year.

U.S. and EU negotiators at all levels – including Ambassador Froman and Trade Commissioner Malmstrom – are already meeting and consulting with one another almost daily, and will continue to do so.

We know this is a challenging year for Europe, in the midst of several challenging years.  Brexit affects anew the calculations of everyone, but we are convinced that the strategic and economic rationale for T-TIP remains strong.  T-TIP can help strengthen a transatlantic relationship that has weathered many previous challenges and has been the foundation of our common prosperity and security for more than 70 years.

Just as we both have much to gain though a successful T-TIP, we have much to lose through failure.  We should not let this unique window of opportunity to complete T-TIP this year slip away.

I look forward to your questions.