The Transatlantic Trade and Investment Partnership (TTIP) and Parliamentary Regulatory Cooperation

Abstract

The Transatlantic Trade and Investment Partnership (TTIP) presents an historic opportunity for the European Union and the United States to remove regulatory divergence – today’s most prominent obstacle to trade exchanges –, thereby increasing economic growth for the citizens of both polities. Yet, with great promises come challenges too. The EU and the US have been attempting to reduce trade barriers since the 1970s, and parliamentarians as well as regulators from both sides of the Atlantic have since the 1990s been working to institutionalise these efforts through a variety of dialogues and committees, as epitomised by the Transatlantic Legislators’ Dialogue (TLD). While this report reviews these efforts in detail, the general conclusion regarding past attempts at regulatory convergence is an overall lack of success: regulatory differences remain as neither side has the incentives to consider the extraterritorial effects of its regulations. As an international agreement predicted to contain a Horizontal Chapter – an innovative approach to international trade treaty-making containing a framework for future regulatory cooperation – TTIP has the potential to transform this impasse, if approached correctly. The Horizontal Chapter would provide a ‘gateway’ for handling sectoral regulatory issues between the EU and the US, including by addressing both legislation and non-legislative acts, regardless of the level at which they are adopted and by whom. The development of such a framework for transatlantic regulatory cooperation – which is likely to be accompanied by the establishment of a Regulatory Cooperation Council (RCC), a mechanism that could ensure TTIP’s operation – raises many important questions in relation to its interactions with the parties’ respective legislatures, the European Parliament and the US Congress. This report examines the potential parliamentary roles, and their implications for the EU legal order – including issues of transparency, democracy, and accountability – in detail. It concludes with recommendations designed to identify the most appropriate avenues to ensure parliamentarian involvement and connect transatlantic parliamentary cooperation with the institutional operation of TTIP.

Keywords: TTIP, international trade, FTA, EU, US, regulatory convergence, regulatory coherence, mutual recognition, equivalence, regulatory compatibility, regulatory design, living agreement, regulatory cooperation council, risk regulation, Hormones, Poultry, SWIFT, ACTA

JEL Classification: K23, K32