'Scaremongering' threatens trade deal, US ambassador warns MEPs

Gardner was making his first appearance in the parliament since his appointment as President Obama’s man in Brussels in February.

EU and US trade negotiators have now been working for over a year on a trade deal which the European Commission claims could be worth 0.5 percent of extra GDP to the bloc.

The talks were “the single most important economic issue” facing lawmakers and was the “biggest debt free stimulus available,” Gardner claimed.

He added that TTIP, which could sit alongside a Trans-Pacific partnership trade deal that the US is currently negotiating with twelve countries including Japan, South Korea and Malaysia, was an “opportunity to set a standard for regional trade deals”.

“If we fail, other countries who do not share our standards ..... and whose weight in the international trading system is growing fast will set those standards for us”.

“Do not prejudge the results, wait until we have advanced texts before you make up your mind”.

But although the talks enjoy the support of EU governments and good will from the Parliament’s largest political groups, claims that the treaty could reduce food safety standards and make it easier for multinationals to sue governments have dominated media coverage in Europe.

The latter issue, known as investor state dispute settlement (ISDS), has prompted the German government and some EU lawmakers to argue that it should be left out of TTIP.

For his part, Gardner said that an ISDS regime would include provisions to prevent “frivolous claims”. “I am happy to sit down with anyone in this room to discuss this mechanism,” he added.

In response, David Martin, spokesman for the centre-left Socialist and Democrat (S&D)group, insisted that the presence of ISDS clauses in other existing trade agreements had “clearly enhanced corporate power,” and had “cost governments a lot of money,” he said.

The 191-member S&D group, the Parliament’s second largest grouping, has indicated that it will not support a TTIP agreement which includes ISDS.

Meanwhile, in an interview with Austrian newspaper Der Standard last week, Pascal Lamy, a former EU trade commissioner and head of the World Trade Organisation, said that an ISDS clause was “not necessary” and “could be excluded”.

This is important when a company from Europe or the United States invests in a small developing country, he said, adding that "the question is whether we need it between the EU, and the United States and Canada."

MEPs will ultimately decide on TTIP’s fate if EU and US trade negotiators conclude an agreement, expected before the end of 2015.

Both Houses of the US Congress will also have to back the treaty for it to enter into force, with US officials insisting that both Democrats and Republicans continue to support TTIP.

After six rounds of negotiations, officials are now working from five consolidated texts and are set to exchange new offers on scrapping the remaining tariffs on goods later this autumn.

The next round of talks will take place in Washington DC next month.