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Optimism fading on both sides of trans-Atlantic trade talks

As US and EU negotiators look ahead to the fifth round of negotiations for a Transatlantic Trade and Investment Partnership (TTIP) at the end of May, the excitement surrounding the talks has been replaced with a sober sense of reality, write Kara Sutton and Josh Stanton.

Washington and Brussels are struggling to find common ground on a number of sensitive issues, which raises questions about the feasibility of reaching a TTIP deal on “one tank of gas”.

The latest Bertelsmann Foundation – Atlantic Council TTIP Stakeholder survey, which polled more than 300 American and European public- and private-sector stakeholders in early 2014, reflects this more grounded view. The stakeholder survey provides a guide for negotiators to better understand the significant issues in their talks and the reasons for pursuing TTIP. The survey can consequently help keep negotiators on track and define potential goals of an agreement.

The poll’s results show that optimism about concluding a deal remains strong ― 85 percent of European and American respondents say they believe a deal will be reached. But stakeholders are less sanguine about the scope of an eventual agreement. Fifty-seven percent of respondents believe a moderate agreement, one that omits more contentious issues, is the likely outcome. Twenty-nine percent see a comprehensive agreement ahead. Regarding a timeframe for a pact, only seven percent of respondents see an agreement taking effect in 2014. A majority views 2016 or beyond as the likely time for a completed TTIP.

This shift in timeframe and the low optimism about comprehensiveness is likely due to sensitivities about certain sectoral issues, such as genetically modified organisms (GMOs) and an investor-state dispute settlement (ISDS), which have created tension in the talks. Stakeholders have subsequently adjusted their views of the provisions in a final agreement. While respondents recognize the importance and ease of reducing tariffs in the trans-Atlantic market, many see traditional free-trade-agreement (FTA) issues as less significant to TTIP. For example, respondents found agriculture, labor standards and environmental standards to be less important than many 21st-century issues such as data privacy.

An even closer look at the results reveals that issues outside the negotiating room also influence stakeholder views. The NSA scandal, for instance, has only increased scrutiny of the role of data protection and privacy standards in the negotiations. Stakeholders rate such issues among the most important and difficult for an agreement. In other words, any comprehensive accord must include precisely those issues on which compromises will be the most challenging.

Current events have also added a strategic element to TTIP. The Ukraine crisis has already turned stakeholder attention towards the role energy-export liberalization could play within a deal. With much of Europe looking to US oil and gas as viable alternatives to dependence on Russian resources, survey respondents view energy-export liberalization among the more important TTIP-related topics. On this issue, however, agreement is seen as less difficult to achieve.

US and EU officials repeatedly seize upon the narrative of TTIP as a driver of jobs and economic growth. The survey’s results, however, show that stakeholders recognize the impact of a deal on external issues. Negotiators and leaders on both sides of the Atlantic certainly need to continue underscoring the potential for jobs and growth, but TTIP discourse needs to go further. Nearly 61 percent of Europeans and 46 percent of Americans believe that their governments have not done enough to communicate the costs and benefits of a prospective agreement. Proper communication must incorporate the strategic components of a potential agreement as well as its economic impact.

The issues that stakeholders emphasize ― regulatory cooperation, data protection and privacy, and energy-export liberalization ― are undoubtedly important to a final agreement and will likely boost jobs and growth. But each issue can also strengthen trans-Atlantic ties and define new best practices for the global trade system. TTIP is key also for this reason.

As the survey shows, strategic elements of TTIP resonate strongly with stakeholders and give further impetus to the importance of concluding a strong and successful agreement. Leaders and negotiators should understand stakeholders’ priorities and ensure that an accord incorporates them rather than allowing talks to stagnate over more controversial yet insignificant areas.

TTIP’s fate ultimately lies with the degree to which stakeholders are satisfied with the agreement and its potential impact. As talks enter a “post-honeymoon” phase, negotiators will seek compromises on politically sensitive issues. Understanding stakeholders’ views will be necessary to overcome the challenges ahead.

Joshua Stanton is project manager, trans-Atlantic relations and Kara Sutton is project manager, legislative relations at the Washington DC-based Bertelsmann Foundation

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