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Brexit Update

Rationale for TTIP Negotiations Remains Strong Despite Brexit

Aug.04.2016

Following a fourteenth round of Transatlantic Trade and Investment Partnership (TTIP) negotiations in Brussels in mid-July, the EU and U.S. chief negotiators confirmed the official intention to try to conclude an agreement before the end of President Obama’s administration. Both agreed that the U.K. vote to leave the European Union will not impact the negotiations, as the rationale for TTIP remains as strong as ever despite Brexit.

U.S. chief negotiator Dan Mullaney acknowledged that the United States continues to analyze the overall impact of the U.K.’s eventual departure from the European Union. However, even though the U.K. accounts for approximately 15 percent of EU nominal Gross Domestic Product (GDP) and 13 percent of EU population, the European Union post-Brexit remains a market of more than €12 trillion and 440 million consumers.

As there is much to lose if negotiations cannot be completed, each side has now tabled proposals for nearly every TTIP chapter and the outlines of a deal are reportedly becoming more clear. Nonetheless, Mullaney and EU chief negotiator Ignacio Garcia Bercero confirmed that a number of important issues remain outstanding. Principal among these are government procurement, a small number of tariff lines the EU deems critically important, and geographical indications (signs used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin).

Discussions on these points, as well as investment protection, are ongoing and may ultimately be resolved towards the end of negotiations. Following this latest official round, EU and U.S. officials also regrouped specifically to address the area of services, in which further progress is needed. In addition, the European Union has tabled a proposal on financial services, although the United States maintains these should not be included within TTIP.

U.S. Secretary of State John Kerry has further confirmed the shared goal of completing TTIP negotiations this year, emphasizing that TTIP becomes more important following Brexit. However, Senate Finance Committee Chairman Orrin Hatch has also identified a number of conditions for TTIP to win congressional approval, including the elimination of both discriminatory geographical indications and barriers to digital trade.

With President Obama reportedly willing to expend the political capital needed to complete an ambitious TTIP and negotiators due to regroup by the end of summer with consolidated texts in virtually all areas, there is seemingly a strong push to complete the deal.


Visit our Brexit update page here to read more of our series of alerts on the 2016 Brexit referendum.


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