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Winnik Forum highlights U.S.—E.U. Free Trade Negotiations

Neal Desai

23 August 2013

Winnik Forum highlights U S E U Free Trade NegotiationsAt the annual Winnik Forum, panelists converged on the Hogan Lovells' Washington D.C. office to discuss the US/EU negotiations for a comprehensive trade agreement, the Transatlantic Trade and Investment Partnership (TTIP).  Jonathan Stoel, Partner in Hogan Lovells’s Washington D.C. office, noted that any such agreement would be unprecedented in size and scope.  If successful, TTIP would cover nearly one-third of all world trade and account for nearly half of world GDP.  A remarkable $2.7 billion of trade flows between the U.S. and the E.U. each day.

Jonathan Stoel also discussed the unique, open structure of TTIP.  He explained that while TTIP negotiators have set high-level goals, they have until July 2013 to decide the specific issues under discussion and establish a framework for negotiation.  In the intervening months, negotiators will reach out to stakeholders for their input on which issues to include and how to structure the negotiations.  This presents an exceptional opportunity for industry to shape the debate.

To take advantage of this blank canvas, Michael Maibach, Senior Fellow with the Aspen Institute, proposed a two stage framework, with an “early harvest” of short-term acheiveable successes to be completed within a year and then a “late harvest” of issues to be concluded thereafter.  The “early harvest” issues would be those where the industry in both the U.S. and the E.U. woud exert strong pressure to achieve success on their respective governments. As such, the “early harvest” industries must truly represent a “win-win” situation to prove successful.

However, Michael Maibach warned that even in such “win-win” situations, reaching agreement will prove challenging.  He noted that both the E.U. and U.S. have developed bureaucracies and that accepting a proposed agreement will require significant internal coordination by the E.U.  Moreover, the parties must work through difficult regulatory harmonization issues or develop a mutual recognition framework that does not allow regulatory forum-shopping. 

Focusing on mutual recognition in the privacy context, Mark MacCarthy, the Vice President for Public Policy of the Software & Information Industry Association, noted a recent trend for countries to restrict cross-border data flows because of privacy concerns.  Countries are increasingly requiring data be stored within the country’s boundaries and prohibiting it from flowing across borders.  To counteract this trend, Mark MacCarthy advocated that TTIP estabilsh the priniciple that a complete ban on the flow of information is not required to protect privacy.  Though TTIP should not develop a specific privacy regime, it could agree that where there is a privacy regime with enforceable codes of conduct, there should be a mechanism to allow the free movement of data among nations. 

Jacquelyn Ruff, Vice President – International at Verizon, also discussed the need to resolve cross-boder privacy concerns in TTIP and suggested an interoperability standard because she viewed complete harmonziation of privacy standards is unlikely.  Jacquelyn Ruff also emphasized the need to approach the sector as a true Information and Communications Technology sector instead of as distinct regulatory regimes for telecommunications and Internet services to adequately reflect the increasing convergence of the formerly distinct sectors.  Jacquelyn Ruff also argued against using rigid classification systems in TTIP, as they quickly become outdated.

The panelists also discussed the importance of TTIP for the global trade regime more broadly.  Moderator Lewis Leibowitz, Partner in Hogan Lovells’s Washington D.C. office, noted that multi-lateral and bi-lateral agreements such as TTIP were becoming more common since the Doha global trade round has stalled.  Michael Maibach suggested that a successful TTIP could serve as a model for global trade agreements, potentially even to the extent of using language directly from TTIP in later agreements.  Jonathan Stoel echoed these sentiments, noting that if successful, the TTIP process may be expanded to reach new areas.

The panelists concluded by observing that TTIP was likely only the beginning of the process for the ICT sector.  Both Jacquelyn Ruff and Mark MacCarthy noted that, if successful, TTIP will likely expand in scope in the face of the industry’s rapid change and will require continuous revision and adjustment.  

Panel Moderator

Lewis Leibowitz, Partner, Hogan Lovells, Washington D.C.


Jonathan Stoel, Partner, Hogan Lovells, Washington D.C.

Michael Maibach, Senior Fellow, The Aspen Institute

Mark MacCarthy, Vice President for Public Policy, Software & Information Industry Association

Jacquelyn Ruff, Vice President – International, Verizon

Neal Desai

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