The European Union and the United States of America have agreed to launch negotiations with the aim of entering into a free trade agreement to be called Transatlantic Trade and Investment Partnership (TTIP).
On 13 February 2013 a joint statement was released by President Obama of the United States of America, President Van Rompuy of the European Council and President Barroso of the European Commission. Its wording is as follows,
“We, the Leaders of the United States and the European Union, are pleased to announce that, based on recommendations from the U.S.-EU High Level Working Group on Jobs and Growth co-chaired by United States Trade Representative Kirk and European Trade Commissioner De Gucht, the United States and the European Union will each initiate the internal procedures necessary to launch negotiations on a Transatlantic Trade and Investment Partnership.
The transatlantic economic relationship is already the world’s largest, accounting for half of global economic output and nearly one trillion dollars in goods and services trade, and supporting millions of jobs on both sides of the Atlantic.
We are committed to making this relationship an even stronger driver of our prosperity. In that regard, we welcome the High Level Working Group’s recommendations on how we can expand further our transatlantic trade and investment partnership, promoting greater growth and supporting more jobs.
A high-standard Transatlantic Trade and Investment Partnership would advance trade and investment liberalization and address regulatory and other non-tariff barriers.
Through this negotiation, the United States and the European Union will have the opportunity not only to expand trade and investment across the Atlantic, but also to contribute to the development of global rules that can strengthen the multilateral trading system.”
Economic implications of this TTIP will be huge for an already strong economic partnership between both sides of the Atlantic Ocean. The European Commission has recalled that:
“The transatlantic trade relation is the backbone of the world economy. Together, the European Union and the Unites States account for about half of the world GDP (47%) and one third of global trade flows. Each day goods and services of almost € 2 billion are traded bilaterally, contributing to creating jobs and growth in our economies. Economic ties between our economies are deep and diverse, with aggregate investment stocks in excess of € 2 trillion.”
The TTIP will no doubt contribute to boost this relationship. The European Commission has pointed out that:
“Latest estimates show that a comprehensive and ambitious agreement between the EU and the US could bring overall annual gains of 0.5% increase in GDP for the EU and a 0.4% increase in GDP for the US by 2027. This would be equivalent to €86 billion of added annual income to the EU economy and €65 billion of added annual income for the US economy.”
Meanwhile, US Trade Representative Ron Kirk has assured that: “The significant economic benefits foreseen in the work of the U.S.-EU High Level Working Group on Jobs and Growth include new jobs, economic growth and international competitiveness on both sides of the Atlantic. It will be a great endeavor for the United States to work with partners in the European Union – with guidance from our stakeholders and Members of Congress – to strengthen our historic partnership.”
From the point of view of investment treaties, we understand that the TTIP will contain an investment chapter similar to Chapter XI of NAFTA or Chapter X of US-DR-CAFTA. This conclusion arises out of the statement issued by the bilateral High Level Working Group that recommended that “a comprehensive U.S.-EU trade agreement should include investment liberalization and protection provisions based on the highest levels of liberalization and highest standards of protection that both sides have negotiated to date.” The European Commission will then use the powers granted by Article 207(1) of TFEU to negotiate the investment chapter.
If the TTIP includes such chapter, it will supersede the BITs that the United States of America has currently in force with a few EU Member States. Those BITs were signed prior to the latter’s respective accessions to the EU and, as a result, they are affected by the provisions of EU Regulation No. 1219/2012; for the moment we do not know whether the EU Member States have informed the European Commission of their wish to maintain those BITs in force.
Furthermore, the President of the European Commission has underlined that “negotiation will set the standard – not only for our future bilateral trade and investment, including regulatory issues, but also for the development of global trade rules.”
It will be interesting to see the exact wording of substantive provisions of the proposed investment chapter as the High Level Working Group has referred to the inclusion of the “highest standards of protection that both sides have negotiated to date.” The problem is to ascertain the meaning of “highest” in, for example, the standard of fair and equitable treatment. Will the EU be willing to accept the linking of the fair and equitable treatment standard with the minimum standard of treatment of customary international law as in Article 10(5) of the US-DR-CAFTA?
We will follow any development on the matter.
 Available at: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/135448.pdf (President of the European Council); http://europa.eu/rapid/press-release_MEMO-13-94_en.htm (European Commission); http://www.whitehouse.gov/the-press-office/2013/02/13/statement-united-states-president-barack-obama-european-council-presiden (White House); http://www.ustr.gov/about-us/press-office/press-releases/2013/february/statement-US-EU-Presidents (Office of the US Trade Representative).
 “European Union and United States to launch negotiations for a Transatlantic Trade and Investment Partnership”, Brussels, 13 February 2013, available at http://europa.eu/rapid/press-release_MEMO-13-95_en.htm.
 Final Report, High Level Working Group on Jobs and Growth, 11 February 2013, available at http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf (European Commission); http://www.ustr.gov/sites/default/files/02132013%20FINAL%20HLWG%20REPORT.pdf (Office of the US Trade Representative).
 BITs with Bulgaria (signed: 23 September 1992), Croatia (13 July 1996 [Croatia will become a EU Member State on 1 July 2013]), the Czech Republic (10 December 2003), Estonia (19 April 1994), Latvia (13 January 1995), Lithuania (14 January 1998), Poland (21 March 1990), Romania (28 May 1992) and Slovakia (22 October 1991). See UNCTAD, Total number of Bilateral Investment Agreements concluded as of 1 June 2012, Reporter: United States, available at http://unctad.org/Sections/dite_pcbb/docs/bits_us.pdf.
 Statement by President Barroso on Transatlantic Trade and Investment Partnership, Brussels, 13 February 2013, available at http://europa.eu/rapid/press-release_SPEECH-13-121_en.htm.
 See the unfinished debate of the content of the fair and equitable standard of treatment in Nida Mahmood, “Implications of Key BIT Provisions,” 11 February 2013, available at http://blogaila.com/2013/02/11/implications-of-key-bit-provisions-by-nida-mahmood/.