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29th May 2022

EU-US trade pact to miss 2015 deadline

  • Malmstrom: trade deal could get caught up in the next US election (Photo: ec.europa.eu)

A 2015 deadline to agree a landmark trade deal with the United States is likely to be missed, EU trade officials have conceded.

"We cannot exclude that it may take longer," Latvian foreign minister Edgars Rinkevics, whose country currently holds the rotating EU presidency, told reporters following a meeting of EU trade ministers on Wednesday (25 March).

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“We have to do our best to get an agreement but we don’t want to reach an agreement just for the sake of it,” he added. “The political will is there but there is an acceptance that it may take longer”.

“We are aiming to conclude this under the Obama administration … but I cannot give you a date,” said EU trade commissioner Cecilia Malmstrom, who added that ratification of TTIP could get caught up in the next US presidential election cycle.

The race to replace Barack Obama will begin in earnest in autumn, when the Democratic and Republican parties begin their nomination process ahead of the presidential election in November 2016.

Trade negotiators have now concluded eight rounds of talks with a view to agreeing a transatlantic trade and investment partnership (TTIP), but were given a provisional deadline of December 2015 by EU leaders to agree a draft text.

The most thorny issue for ministers remains the investor protection mechanism known as ISDS, which allows firms to take governments to court if they discriminate against them or introduce new laws which threaten their investments.

“ISDS is a hot potato,” conceded Rinkevics. He said there are “differences in opinion” amongst ministers, but added there is no indication that member states want to open up the EU-Canada trade agreement, which includes the controversial regime.

“I believe that we have made progress in aligning our opinions,” he said.

“We have started to make a proposal to reform this mechanism,” noted Malmstrom, which she said would focus on making investor protection “much more transparent and legitimate”.

“We hope to put forward an EU proposal on ISDS later this spring … I felt a very strong support [from ministers] for these reforms”.

The European Commission has made it clear that an investor protection regime should be part of TTIP. But it hopes to agree reforms with US officials in a bid to placate critics, who say it will allow multinationals to prevent governments from regulating in the public interest.

Malmstrom told a European Parliament hearing last week that the EU would propose including an article in the text making clear that governments are free to pursue public policy objectives they deem appropriate and that investment protection rules offer no guarantee to companies that the legal regime in which they invested will remain the same.

The commission will also propose the creation of a permanent court to arbitrate on cases.

In January, the commission published a 140-page report of findings following an online consultation to which 97 percent of submissions were opposed to the inclusion of ISDS.

US trade officials insist that investor protection is included in the agreement, however.

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