10 October 2013

Commissioner De Gucht: TTIP – Solving the regulatory puzzle

Laying out the EU's vision for the TTIP regulatory chapter, De Gucht proposed that a new TTIP Regulatory Cooperation Council should be established to monitor the implementation of commitments made and consider new priorities for regulatory cooperation.

The EU's Vision for the TTIP Regulatory Chapter

From the European side, there are three essential elements:

• Ways to cooperate on future regulations to avoid unnecessary trade barriers,
• Ways to make existing regulations more compatible, and
• Supporting this work with the right institutions.

First, to have maximum effect, our cooperation on future regulations with a significant impact on transatlantic trade should be strengthened across the board – from food safety to financial services...

Second, we need to look at existing regulations. How can we make them more compatible – especially in important sectors like automotive, chemicals, health, financial services and ICT? In the case of the TTIP this is particularly important. Because if we can't agree to remove individual barriers to trade in particular products we won't convince anybody that our principles serve a purpose.

The financial crisis showed in stark clarity that this is a global sector and that countries need to work together if we are to manage risk effectively. This is particularly true of the EU and the US, given our 70 per cent share of world trade in financial services.

This is why we have both been advocating high international standards for global regulation: through the G20, the Financial Stability Board and the Basel Committee.

We have made real progress. But there is a real risk that EU and US authorities implement what has been agreed in inconsistent ways. We have already seen examples of duplication of rules, and rules with extraterritorial effects.

This has a cost: it weakens financial resilience and makes it more difficult for our economies to recover. So we need to cooperate more to produce better results. And TTIP gives us that opportunity.

These are just some of the examples. In these and many other areas European and American companies have submitted substantial convincing joint proposals on how to facilitate trade and investment. But I can say to any interested parties in the room that we are ready to look at new, reasonable proposals for cooperation that will facilitate trade while keeping protection intact.

The third and final pillar of Europe's vision for the TTIP's regulatory pillar is institutions. Here again we have learned from the past: If we want regulators to work together in the future we need to make sure that they are equipped to do so. I therefore propose that the TTIP establishes a new Regulatory Cooperation Council that brings together the heads of the most important EU and US regulatory agencies.

The council would monitor the implementation of commitments made and consider new priorities for regulatory cooperation – also in response to proposals from stakeholders. In some cases it could also ask regulators or standards bodies to develop regulations jointly that could then have a good chance of becoming international standards.

Strong institutions like this will be key to making the TTIP a living agreement that promotes greater compatibility of our regimes and accelerates the development of global approaches. And strengthening global approaches is one of the primary strategic objectives of this agreement.

We have already seen the potential of a stronger transatlantic partnership in the recent cooperation between the EU, US, Japan and now China on electric vehicles. When the EU and the US work together there is a natural multiplier effect that brings benefits both to us and to our trading partners.

Three fundamental points

First, nothing we will agree under this agreement will lower standards of protection. Removing regulatory barriers is not a race to the bottom.

Second, neither side is going to renounce the right to regulate in future to reach the level of protection that their citizens choose. To be very clear from a European perspective: the Commission, Parliament and Member State governments will continue to set the rules. And given that the precautionary principle is enshrined in the Lisbon Treaty, nothing in the TTIP could possibly change that.

Third, a beauty contest will flatter no-one. Neither side will be successful if it seeks to impose its system on the other. Instead we should seek to exercise joint leadership on these issues. If we do not, others will.

This is our vision for TTIP. It is both ambitious and practical. It will not be easy but it will be worth it if we do make the effort. If we base our approach on these principles - strengthening the transatlantic bond, while inspired by the Single Market – we will reach, I have no doubt, a very valuable conclusion.

Full speech

© European Commission