TTIP: The Benefits Speech by Cecilia Malmström European Commissioner for Trade European Parliament Hearing: "TTIP: What's in it for the Europeans?" Brussels, 18 March 2015 Honourable Members, Ladies and gentlemen, Thanks to the European Parliament for organising this hearing on what is, without question, the biggest trade issue of the day. It's been my policy since becoming trade commissioner four and half months ago, that trade policy-making needs to be clearly oriented towards people's needs. Yes we work with companies. Because removing barriers to their exports, imports and investments is how trade policy influences the real world. And it is companies who know both about what the barriers are and about what kinds of economic potential new trade opportunities may offer. But we must also work closely with groups and individuals who represent people in all their different capacities: trade unions, consumer organisations, environmental campaigners and public health activists. 1 Their experience is vital since it can tell us about the broader impact of removing other trade barriers. My job as Trade Commissioner is to listen closely and to assess all of these views. And then I must set a policy that creates new opportunities for workers and consumers, while safeguarding and even strengthening our values and the legislation that backs them up. That's how I am approaching all the trade agreements the European Union is negotiating. And it's certainly how I'm approaching the Transatlantic Trade and Investment Partnership. Over the last four and a half months I've spoken to representatives of all sides of this debate. I've heard all shades of opinion and, I hope, listened to all types of concerns. Above all I heard the concern that the negotiations were not transparent enough. Many people on all sides felt that an agreement like TTIP, with so much ambition for dealing with regulation, needs to be open. We decide on regulation transparently at home. The same should apply internationally. I agree. That is why I have already taken significant steps to open up this negotiation, for the Members of this Parliament, for national governments, and most importantly for the public. 2 That openness is already improving the quality of our dialogue and helping everyone understand what we are doing. And though this debate is far from over, and though there is more listening and more exchanges to be had, not to mention more hard negotiating with our partners across the Atlantic, I believe our discussions are truly moving forward. And I believe that the benefits of this agreement, which we are here to talk about today, are starting to shine clearly through. Allow me to outline how I see them. They benefit three parts of the European system: The strength of our economy The efficiency of our government And the strength of our voice in world affairs. *** Let me start with the last one first. TTIP will benefit Europeans by giving us a stronger voice in the world outside our borders… 3 … at a time when the world outside our borders is becoming more and more important in our lives. The world economy is becoming more integrated, through communications technology and international value chains. As a result there is already more demand from governments for international rules on everything from safety requirements for products to capital requirements for banks. That demand for international cooperation is likely to increase in future. And just as it does, the relative size of the European economy in the world is decreasing. The same goes for the United States. That means that both sides will have less influence on any international rules in the future. Furthermore, we would both want the same thing from global rules: strong regulatory protections for the environment, consumers, health & safety and other interests. TTIP puts this logic together. It strengthens our partnership, on exactly the kind of regulatory issues that we will want to influence in future. That's a huge strategic benefit for European citizens. *** The second type of benefit from TTIP is about more efficient government. It works in four ways: 4 First, regulatory cooperation is at the heart of TTIP and when regulators cooperate they make better regulation. Sharing expertise and data is essential because new regulatory challenges – from electric cars to nanotechnology – are all about dealing with uncertainty. Second, when authorities cooperate they can enforce the rules better. Authorities only have a limited number of inspectors whose challenge  to enforce the rules in a giant, integrated global economy  seems heroic to outsiders. If cooperation on inspections of production sites for food, medicines and medical devices can help them in their task, it's worth doing. Third, TTIP will make it cheaper for governments to buy goods and services, saving taxpayers money. That's what open public procurement is all about. And when lower tariffs and regulatory cooperation make products cheaper – from medicine, to furniture, to uniforms – taxpayers save money again. Finally, and let me say this loud and clear: TTIP will not lower standards. Not on food, not on the environment, not on health, not on safety, not on consumer protection.  None of the work in TTIP on existing EU and US regulation will affect our high standards.  None of work in TTIP to cooperate on future regulation will affect our high standards.  And, a new EU approach to investment  which we have just been discussing  won't affect our high standards either. 5 *** The third area of benefits are of course economic. The value proposition of this deal is the following: First, there are 4.7 million Europeans in jobs today thanks to our exports to the United States. We want to create new export opportunities and therefore more demand for these kinds of higher paying jobs. Second, we want TTIP to benefit consumers, who can gain access to a wider choice of goods and services at lower prices. And third, we want to make our companies competitive. Two thirds of our imports are parts, components, raw materials and energy. And 13% of the value of Europe's exports are made up of imports. By reducing their cost and we get more efficient firms, ready to take on the world and bring prosperity back home to Europe. Let me give you three examples of the kinds of trade barriers TTIP will remove and the kinds of real firms who will benefit: First, public procurement. In Finland there is a company called Efla, based not far from Helsinki. They make equipment for the lighting systems that help planes land safely on airport runways. Their products are certified as safe by the US authorities. But they still can't sell them because US law limits how much states and local authorities can buy equipment produced 6 outside America. We want TTIP to get rid of public procurement barriers like those. Second, tariffs. In Spain, different companies have to pay high tariffs in the US. It happens that there are many SMEs in sectors like food and footwear and both of those sectors have real tariff disadvantages. Shoe makers in Alicante pay 35% on their exports to the US. And artichoke producers in Murcia are at a significant disadvantage relative to their competitors from Latin America. The latter get in duty free thanks to a free trade agreement with the US. Our European exporters pay 15%. And it's not all about the high tariffs. There's a company in my home, Gothenburg, that sells gluten free Swedish almond cake in the United States. But to do so they have to pay a 6% tariff. TTIP will get rid of it. It might not sound like much but they tell us that if we can lift it they could offer their products at a more attractive price, and therefore sell more. Third, regulation. There's a small pharmaceutical company called Montavit, from Tirol in Austria that says that the high annual fees for double inspections of its facility by EU and US authorities, for compliance with the same rules  make it too expensive for them to do business in the US. 7 There's Alfred H. Schütte GmbH, which makes factory machines and is based in Köln and employs 600 people. They say that different standards for the colour of wire for plugs, for sockets and for many other issues mean it costs 10 to 15% more to produce a machine for the US market. Or take Medithau, based in the Mediterranean coast of France. They produce oysters and they are very interested in the US market, particularly since they lost access to its customers in Russia. But under the current rules that's impossible. This is something we are talking about in TTIP. Both sides  I'm relieved to report  do a whole range of exhaustive tests on oysters before they are sold to customers and restaurants. But while we in Europe test the flesh of the oyster, the US tests the water around it. If experts believe the two tests are equivalent, we should be able to recognise that in the agreement. *** Honourable Members, Ladies and Gentlemen, This is the reality of TTIP: A deal that can boost our economy by creating opportunities for smaller, as well as bigger firms. 8 A deal that can make our government more efficient by boosting cooperation. A deal that can help us preserve the European way of life in a world that's changing very fast. I hope we can achieve it. To do so we'll all need to work together. Thank you very much for your attention. *** 9