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Taking EU-US trade to the next
level – why Europe needs TTIP
CBI Briefing
Confederation of British Industry
Across the UK, the Confederation of British Industry (CBI)
speaks on behalf of 190,000 businesses of all sizes and
sectors which together employ nearly 7 million people, about
one third of the private sector-employed workforce. With
offices in the UK as well as representation in Brussels,
Washington, Beijing and Delhi, the CBI communicates the
British business voice around the world.
“MEPs must help
make sure this
opportunity is
seized, with the aim
of securing a
comprehensive TTIP
agreement as soon
as possible.
Why does Europe need TTIP?
TTIP will boost trade and investment on both sides of the
Atlantic. Here’s what it will mean in practice for businesses
and consumers in the UK and across Europe:

BIG OPPORTUNITIES FOR SMALL AND MID-SIZED
COMPANIES

MORE CHOICE AND LOWER PRICES FOR
CONSUMERS

LESS RED TAPE AND CUSTOMS BUREAUCRACY

BIGGER FOOTPRINT FOR EUROPE’S LEADING
SERVICES COMPANIES

HIGHER INVESTMENT CREATING NEW JOBS
An ambitious TTIP has the potential to add at least £10
billion to the UK economy each year and a 0.5% boost to
EU GDP. More importantly, TTIP will increase exports, spur
innovation and boost jobs in Europe.
Nearly a fifth of Europe’s goods exports and a quarter of
Europe’s services exports go to the United States. European
business invests more in the United States than anywhere
else in the world, setting firms up for success abroad that
consolidates success here at home. And US investment in
Europe creates jobs – in the UK alone 1 million jobs are
supported by American firms.
TTIP offers an opportunity to cement this prosperous trade
and investment relationship and take it to new heights.
2. The CBI’s TTIP recommendations
The CBI supports a high quality TTIP agreement that
sets the framework for a new era of transatlantic
trade and investment. This agreement must be
comprehensive, including provisions to guarantee
cross-border data flows, safeguard energy supplies
and protect overseas investors.
Most importantly of all, the CBI has the following
recommendations for the TTIP negotiations.

TARIFFS - Secure tariff elimination on a zerofor-zero basis upon entry into force of TTIP.

SERVICES - Remove trade barriers in key
services sectors, including aviation, shipping,
telecommunications, re-insurance and
professional services.

PROCUREMENT - Open up public
procurement contracts to the highest degree
possible, going beyond existing GPA
commitments.

NON-TARIFF BARRIERS - Deliver meaningful
results to reduce the impact of long-standing
non-tariff barriers at the sector level.

CUSTOMS - Reduce red tape for European
companies when shipping products to the
US.
2.1 Securing tariff elimination
TARIFFS - Secure tariff elimination on a zero-forzero basis upon entry into force of TTIP.
Although most tariffs applied by the EU and US are
relatively low (on average, 3-5%), tariff elimination
would still lead to major cost savings for companies of
all sizes, helping to boost intra-company trade and
free up capital for long-term investment.
Tariff elimination would also help our exporters to
gain a foothold in the US market. US tariffs up to 2030% currently apply for some clothing, food and
ceramics exports, which makes it very difficult for
European producers to increase sales and establish a
foothold in the US market.
2.2 Liberalising trade in services
SERVICES - Remove trade barriers in key
services sectors, including aviation, shipping,
telecommunications, re-insurance and
professional services.
25% of all EU services exports already head to the
US – equal to over €150 billion a year. TTIP is a great
opportunity to build on this success.
However, there are still some longstanding barriers to
the US services market that need resolving. EU
investment opportunities in US airlines are more
limited than vice versa. European shipping
companies are not permitted to transport cargo
between US ports. There are major pricing barriers to
new market entrants in the ICT sector, and British reinsurance providers are negatively impacted by
discriminatory collateral requirements in each State.
2.3 Opening up US public procurement
PROCUREMENT - Open up public procurement
contracts to the highest degree possible, going
beyond existing GPA commitments.
The European Commission estimates that 95% of EU
public procurement by value is covered by WTO GPA
commitments, whereas 32% of US procurement is
covered. Local content requirements applied at the
federal and state level are an additional problem. ‘Buy
Transatlantic’ could help more European companies,
including SMEs, carry out contracts in the US.
TTIP should also introduce clarity with rules and
procedures when competing for public procurement
contracts. Clear criteria in the selection and decisionmaking process would increase predictability for
companies considering to bid for contracts in the US.
2.4 Reducing non-tariff barriers in key sectors
NON-TARIFF BARRIERS - Deliver meaningful
results to reduce the impact of long-standing
non-tariff barriers at the sector level.
About 80% of the value from TTIP is estimated to
come from action to tackle regulatory barriers in key
goods and services sectors. Duplicate testing and
certification requirements can cost companies a lot of
time and money if they wish to export overseas.
TTIP can introduce improved overall regulatory cooperation between the EU and US, seeking to identify
any unanticipated impacts on trade from new
regulations before it is too late.
2.5 Simplifying customs procedures
CUSTOMS - Reduce red tape for European
companies when shipping products to the US.
We support any new measures in TTIP that make it
easier, quicker and more predictable for companies to
ship goods across borders. This could include new
incentives for SMEs to take advantage of the trusted
trader programmes, helping to make sure that these
schemes are fully utilised to reduce bureaucracy and
accelerate the customs process.
3. Making the case for TTIP
3.3 Breaking into new markets
TTIP has attracted a huge level of interest. However,
many of the claims that we have heard about TTIP
are not justified based on the evidence that exists.
FACT: TTIP will be a major stepping stone for the
EU’s wider trade agenda
3.1 Economic benefits from TTIP
FACT: TTIP will deliver real economic benefits to
businesses, consumers and workers
The economic case for TTIP has frequently been
rejected. However, according to the official impact
assessment, an ambitious TTIP has the potential to
add up to £10 billion extra to the UK economy each
year. Once productivity improvements are accounted
for, the final figure could be far higher.
SMEs will be the real winner. SMEs are generally hurt
much more than bigger companies by duplicate
product approval rules and other burdensome trade
barriers, as they do not have the same internal
resources at their disposal to deal with them. TTIP
will remove these barriers.
The consumer will also win. TTIP will eliminate high
tariffs applied on many goods purchased by
European consumers – both for low price items like
jeans (12%) and for bigger investments like a new car
(10%). The price that consumers pay in Europe for
many items should be lowered once TTIP takes
effect.
In order to fully deliver on growth and jobs, TTIP must
succeed in tackling the practical day-to-day trade
irritants faced by companies. This is exactly why the
CBI is calling for a comprehensive package that does
not skirt around the most important issues.
3.2 Regulations and standards
FACT: TTIP will reduce costs for companies
without posing a threat to consumer safety
The negotiations on regulatory co-operation are
crucial. They can potentially deliver as much as 80%
of TTIP’s total economic benefits.
TTIP will only eliminate duplicate regulatory
requirements where it can be demonstrated that
current EU and US regulations provide the same or
very similar levels of protection for consumers.
Existing levels of regulatory protection on both sides
of the Atlantic will therefore be upheld.
TTIP will not in any shape or form weaken the level of
protection afforded to consumers or the environment.
Instead, improved co-operation between EU and US
regulatory authorities will support the uptake of higher
safety standards globally as more trading partners
aim to achieve consistency with EU and US
regulatory requirements.
The EU has signed 30 agreements with over 50
countries. Combined with EU membership, this has
given UK firms preferential access to a $24 trillion
market. However, signing TTIP and finalising all the
other EU FTAs under negotiation would double this
total market open to British exports to $47 trillion.
90% of global economic growth is projected to come
from emerging markets over the next 10-15 years.
Securing trade agreements with more fast-growing
countries must be a top priority for the EU. Securing
TTIP will help free up resources to make headway
with these other important deals.
Furthermore, TTIP will help set the benchmark for
these other bilateral trade deals, encouraging more
countries to sign up to rules that promote free and fair
trade. This is particularly important on issues like
intellectual property rights, investment, energy and
sustainable development. A successful TTIP could
also help inject impetus into WTO negotiations at the
global level.
3.4 Investor-state dispute settlement (ISDS)
FACT: ISDS in TTIP is important for EU business
ISDS ensures that host Governments abide by basic
principles of international investment law. These
basic principles include protecting foreign investors
from discriminatory treatment, expropriation and
arbitrary behaviour by the host country.
Without ISDS, foreign investors could turn towards
national courts. But unless the basic principles listed
above are transposed into national law (which they
are not), there is no way for TTIP investment
provisions to be enforced by foreign investors. This is
why an independent ISDS mechanism is so important
for business.
A modernised ISDS procedure with improved
transparency is needed in TTIP. This should clearly
preserve the right of EU Member States to regulate to
achieve legitimate policy objectives. Excluding ISDS
would set a very negative precedent for other EU
negotiations with Japan, India and China.
Furthermore, it would undermine the existing
framework of 1400 Bilateral Investment Treaties that
play an essential role in protecting investments by EU
companies around the world.
Specific concerns in the UK about the NHS are
unfounded, given the Commission has stated very
clearly that a decision not to renew a service contract
would not give grounds for an ISDS claim.
4. European Parliament TTIP report
TTIP is a once-in-a-generation opportunity to tackle
longstanding barriers to EU-US trade and investment.
MEPs must help make sure this opportunity is seized,
with the aim of securing a comprehensive TTIP
agreement as soon as possible.
The own-initiative report on TTIP under preparation in
the European Parliament is an excellent opportunity
for MEPs to input substantively to the negotiations,
ensuring that the Commission negotiates an
agreement that delivers for all stakeholders, including
business, employees and consumers.
4.1 We welcome many of the points made in
Bernd Lange’s draft report. In particular, the
CBI supports…
OVERALL OBJECTIVE OF TTIP:
The draft report calls for the Commission to deliver a
“deep, comprehensive, ambitious, balanced and highstandard trade and investment agreement” that
supports “sustainable growth” and opens up “new
opportunities for EU companies, in particular SMEs”.
We fully support this objective.
STRUCTURE:
The draft report emphasises that TTIP should consist
of “ambitiously improving reciprocal market access
(for goods, services, investment and public
procurement at all levels of government), reducing
NTBs and enhancing the compatibility of regulatory
regimes, and developing common rules to address
shared global trade challenges and opportunities”.
Importantly, commitments on these areas should be
“included in a comprehensive package”. We fully
agree with this proposed structure.
 ensuring that “account is taken of the
discrepancies in the openness of public
procurement markets on both sides of the
Atlantic”;
 regarding NTBs, ensuring that “the regulatory
cooperation chapter promotes an effective, procompetitive economic environment through the
facilitation of trade and investment”.
We fully agree with these priorities.
4.2 However, some points raised in Bernd
Lange’s draft report are not supported by the
CBI. In particular…
POSITIVE/NEGATIVE LIST:
The draft report calls for a “positive list approach” for
the services commitments, with standstill and ratchet
clauses only applying to “non-discrimination
provisions”. The CBI on the other hand supports a
negative list approach, and standstill and ratchet
clauses should apply for all services market
access provisions – not just non-discrimination.
There should be separate provisions to fully
protect public services, as already outlined by the
Commission.
DATA FLOWS:
The draft report calls for “no commitments on data
flows” to be “taken up before European data
protection legislation is in place”. The CBI believes it
is essential that TTIP includes commitments that
reinforce open cross-border data flows between
the EU and US.
ISDS:
The draft report accurately highlights many important
priorities faced by EU companies that should be dealt
with in the TTIP negotiations. These include:
The draft report states that an ISDS mechanism “is
not necessary in TTIP given the EU’s and the US’
developed legal systems”. The CBI disagrees for
the reasons outlined previously. There is no
guarantee that TTIP investment provisions will be
enforceable without an ISDS mechanism.
 “elimination of all duty tariffs”;
Conclusion
 “important offensive interests… in the areas of
engineering, telecommunications and transport
services”;
TTIP is one of the best ways for the EU to increase
exports, spur innovation and boost jobs in the UK and
elsewhere in Europe. We look forward to engaging
with politicians further on any of the topics raised in
this briefing as negotiations progress to a more
advanced phase during the coming months.
OFFENSIVE INTERESTS FOR THE EU
 “combining market access negotiations on
financial services with convergence in financial
regulation on the highest level”;
For further information or a copy in large text
format, please contact:
Tom Sallis, senior policy adviser, CBI
© Copyright CBI 2015
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