European Parliament vote will raise more TTIP doubts

Subject

The European Parliament and the Transatlantic Trade and Investment Partnership.

Significance

The last-minute decision of the European Parliament (EP) to postpone a June 10 debate and vote on the Transatlantic Trade and Investment Partnership (TTIP) has exposed important divisions among its members (MEPs) over whether and how closer EU-US economic ties can be secured. While non-binding at this stage, the debate and vote would have provided important guidance to the European Commission on its priorities and room for manoeuvre as it engages in further negotiations with the United States. TTIP must ultimately be ratified by the EP, which has voted down international agreements in the past.

Impacts

• The EP's difficulties in finalising its views could constrain the Commission in the TTIP negotiations.
• However, given the EP's ultimate veto over the deal, time spent now on hammering out an ISDS formula it could accept may not be wasted.
• Any rejection of TTIP, particularly over ISDS, could raise questions over future international trade deals premised on deep integration.
• TTIP rejection could even jeopardise concluded trade deals awaiting ratification, such as that between the EU and Canada.
• Progress on TTIP is among the measures sought by UK Prime Minister David Cameron before his EU membership referendum.