The “Transatlantic Trade and Investment Partnership” treaty, better known as TTIP, should have been the most extensive trade and investment treaty ever between the European Union and the United States of America. Negotiations were underway between July 2013 and January 2017. The treaty was subject to strong criticism from both the Trump administration and from the European side. The negotiations have now been standing still for several years.
There was a lot of criticism of TTIP from the start. Small entrepreneurs in the EU believed that only large multinationals would benefit. Consumer organizations were afraid of too many concessions in the area of product safety and the environment. We see the same happening regarding the CETA agreement with Canada. Rejection of this trade deal, which has been operating in practice for several years now, is actually happening in several European countries.
The main reason for rejection now of the agreement is the arbitration tribunal, in TTIP this part was also a very controversial item.
There was also a lot of criticism that in TTIP, a treaty of more than a thousand pages, every effort seemed to be made to completely curb every subject from a legal perspective. The proposal for the Investor-to-State Dispute Settlement (ISDS) was, as stated above, another heavily criticized part of the agreement. An international arbitration tribunal, ignoring national laws and courts, was simply not acceptable to many in politics and society.
Given the enormous economic potential of trade between North America and Europe, this is a missed opportunity that has major economic disadvantages on both sides. To maintain prosperity, it is important to pick up the negotiations again soon.
It is time for a much simpler trade agreement
Why should trade agreements be extensive and completely locked down on all details? This is not how the real-world works. It can all be a lot easier.
The Amdoc Europe Foundation is therefore in favor of the following model for a trade agreement between the European Union and the United States.
- All import duties are reciprocally cancelled.
- National legislation and regulations regarding environmental requirements, consumer safety etc. continue to apply in full.
- Requirements for products and investments in a country must not be different for foreign entrepreneurs than for domestic entrepreneurs.
- In the event of disagreement, it is up to the national courts.
In concrete terms, this means free trade without financial obstacles in the form of import duties.
Nobody needs to be afraid that imported products do not meet the environmental and safety requirements that apply in their own country, as they continue to apply.
There must be a level playing field. Requirements for imported products or foreign investments should not discriminate against requirements for domestic products and investments.
And if there is nevertheless a difference of opinion, the national court in the importing country gives an opinion.
The NAFTA agreement between the United States, Canada and Mexico has since been replaced by a new simpler agreement with the name USMCA.
It is obvious that, according to the aforementioned principles, a new Transatlantic treaty should not only be concluded with the US but with all three USMCA partners at the same time.
We really cannot make it any simpler or easier.
Negotiators, politicians, and all other stakeholders are challenged to get started.
Sittard, The Netherlands
May 5, 2021.