February 4, 2015
Proposed Transatlantic Trade and Investment Partnership
(T-TIP)
Overview
What is the role of Congress? Congress establishes U.S.
What is it? The Transatlantic Trade and Investment
trade negotiating objectives and would consider legislation
Partnership (T-TIP) is a proposed “comprehensive and
to implement a final T-TIP agreement. Possible
high-standard” free trade agreement (FTA) between the
congressional consideration of renewal of Trade Promotion
United States and European Union (EU). Both sides seek to
Authority (TPA), which expired in 2007, could affect the T-
liberalize transatlantic trade and investment and set globally
TIP negotiations. As part of oversight, Congress could
relevant rules and disciplines that could boost economic
examine the economic implications of a proposed T-TIP;
growth, support multilateral trade liberalization through the
how T-TIP would compare with other FTAs, such as the
World Trade Organization (WTO), and address third-
TPP and EU-Canada Comprehensive Economic and Trade
country trade policy challenges.
Agreement (CETA); and whether T-TIP should include
other countries, such as Canada and Mexico.
...[an] opportunity to not only expand trade and
Trade and Economic Context
investment across the Atlantic, but also contribute
to the development of global rules that can
The United States and EU share a mutually beneficial and
strengthen the multilateral trading system. U.S.
globally significant economic relationship (Figure 1). While
and EU leaders on T-TIP, February 2013
they are each other’s largest overall trade and foreign direct
investment (FDI) partners, a range of trade and investment
What is the current status? On March 20, 2013, the
barriers constrain the economic relationship. Concerns
Obama Administration notified Congress of its intent to
about slow economic growth and increased competition
negotiate T-TIP. Negotiations began in July 2013, with an
from emerging markets have renewed interest in addressing
eighth round of negotiations in February 2015. At the
remaining bilateral trade and investment barriers through T-
outset, both sides aimed to conclude T-TIP in two years, but
TIP.
the timeframe’s likelihood is questionable given the
complexity of outstanding issues and the Administration’s
Figure 1. U.S.-EU Share of Global Economy, 2013
focus on concluding the Trans-Pacific Partnership (TPP)
negotiations. In the T-TIP, both sides have exchanged
initial tariff offers, and discussions on regulations,
standards, and rules are ongoing. The European
Commission is determining its approach to investor-state
dispute settlement in T-TIP following a public consultation.
How would it differ from other U.S. FTAs? T-TIP
involves the world’s two largest advanced economies.
Negotiators seek new or expanded commitments in areas
such as regulatory compatibility, state-owned enterprises
(SOEs), and localization barriers to trade in the digital
environment. In addition, negotiators aim to use T-TIP to
develop globally relevant trade disciplines.
What are supporting views? Supporters see an
opportunity to boost transatlantic economic growth and jobs
by addressing costly trade barriers; strengthen the U.S.-EU
bilateral relationship; and support broader and deeper trade
liberalization, including through potential common
approaches for the development of rules in the WTO or

with third-country markets.
Source: World Bank; World Trade Organization; United Nations
Conference on Trade and Development; and Bureau for Economic
What are opposing views? Opponents are concerned about
Analysis.
adverse effects on import sensitive sectors; the impact on
U.S.-EU relations should negotiations stall; a focus on
Key Negotiating Issues
regional and bilateral FTAs detracting from multilateral
trade liberalization; and potential infringement on U.S. and
Market Access. The United States and EU aim to eliminate
EU sovereignty, including the ability to regulate for health,
or reduce trade and investment barriers on goods, services,
labor, and environmental interests.
and agriculture. Average U.S. and EU tariffs are already
low, but given the magnitude of the transatlantic economic
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Proposed Transatlantic Trade and Investment Partnership (T-TIP)
relationship, further tariff liberalization could yield
Energy and Raw Materials. Discussions may focus on
significant gains.
removing restrictions on trade and investment in energy and
Regulations and Standards. A major component of T-TIP
raw materials, as well as regulatory frameworks. Exports of
is achieving greater cooperation, convergence, and
liquefied natural gas (LNG) may be of particular interest.
transparency in regulations and standards-setting processes
Government Procurement. Government procurement
to reduce bilateral nontariff barriers to trade. Key sectors of
disciplines aim to ensure transparent, nondiscriminatory
interest include automobiles, chemicals, cosmetics,
treatment toward domestic and foreign firms when
engineering, information and communications technology,
government actors make purchasing decisions. T-TIP
medical devices, pesticides, pharmaceuticals, and textiles.
negotiations could involve discussions on greater market

access and enhanced rules for procurement markets,
including at the sub-central government level.
Transatlantic Cooperation
IPR. T-TIP negotiations are expected to include the
Possible U.S.-EU regulatory and standard-setting approaches:
protection and enforcement of IPR, which are legal rights in
Cooperative Frameworks, such as through the Transatlantic
various form (e.g., copyrights, trademarks, and patents) to
Economic Council (TEC) and potential T-TIP mechanisms,
protect innovation and promote creative output. Treatment
provide an opportunity to discuss technical differences, as wel as
of GIs may be controversial, while cooperation on trade
processes for greater transparency, accountability, and
secrets could lead to globally relevant rules on cyber theft.
stakeholder participation across sectors.
Investment. U.S.-EU investment flows outsize the already
Mutual Recognition Agreements (MRAs) are agreements by
considerable U.S.-EU trade flows. Possible T-TIP issues
regulators to accept products and services from each other’s
include greater market access for certain sectors and
jurisdiction under specified conditions. For example, the United
investor-state dispute settlement (binding, impartial
States and EU recognize each other’s safety inspections for
international arbitration of investment dispute between
civilian aircraft under a 2011 bilateral MRA.
investor and host country).
Harmonization of the same standards or rules across
Labor and Environment. Labor and environmental
jurisdictions is being discussed in the T-TIP context, particularly
provisions attempt to address concerns over the protection
as a possibility for the development of new regulations and
of worker rights and the environment. The United States
standards for future technologies.
and EU, which maintain high levels of domestic protection
Global Standards Leadership could be possible if the T-TIP
in these areas, may debate the scope and enforceability of
results in meaningful regulatory outcomes.
such obligations in T-TIP.
Rules. The United States and EU seek to establish rules
Localization. “Forced” localization measures, such as local
governing international trade, such as for regulation, SOEs,
content requirements to process data in-country, are
intellectual property rights (IPR), investment, trade
designed to support domestic firms at the expense of
facilitation, and localization barriers to trade. Some rules
foreign counterparts. T-TIP could address localization
could exceed existing U.S. FTAs or WTO commitments.
barriers bilaterally and with third countries.
Rules of Origin. Rules of origin will determine which U.S.
Specific Issue Areas
and EU goods would benefit from T-TIP.
Agriculture. Agriculture is an important part of U.S. trade.
Services. Services are important to the U.S.-EU trade
T-TIP negotiations seek to address tariff reduction and
relationship. U.S. FTAs typically cover trade in services
elimination; market access for genetically modified
through market access provisions and rules. There is debate
organism (GMO) products; sanitary and phytosanitary
about whether financial services regulation and “cultural
standards (SPS); and treatment of regional agricultural
exceptions” for the audiovisual services sector will be
products as geographical indications (GIs).
discussed. Other possible issues include the movement of
Customs and Trade Facilitation. The efficient flow of
service providers across borders.
legally traded goods across borders supports access to
SOEs. State-owned enterprises, in which the government
foreign markets and global supply chains. T-TIP
has significant control or influence, often receive subsidies,
negotiations aim to address burdensome customs
preferential financing, and/or other special privileges, and
procedures to support U.S.-EU trade, while balancing
can place foreign firms at a competitive disadvantage. T-
security concerns.
TIP aims to craft globally relevant SOE disciplines.
Digital Trade. The Internet is an important delivery
See CRS Report R43387, Transatlantic Trade and
platform for trade. Open e-commerce trade, data flows, and
Investment Partnership (T-TIP) Negotiations, by Shayerah
privacy could be a major part of T-TIP negotiations,
Ilias Akhtar and Vivian C. Jones.
attracting greater interest due to debate about U.S.
government surveillance activity and new EU directives to
Shayerah Ilias Akhtar, siliasakhtar@crs.loc.gov, 7-9253
reform its data and privacy laws.
Vivian C. Jones, vcjones@crs.loc.gov, 7-7823
Dispute Settlement. Provisions on dispute settlement

establish the mechanism for enforcing FTA commitments.
T-TIP negotiations may examine what disciplines would be
IF10120
covered under a dispute settlement mechanism and
approaches for dispute resolution.
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