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PAPERS PRESENTED AT THE EUROPEAN FORUM FOR MANUFACTURINGS

ROUNDTABLE & DINNER DEBATE

EU TRADE STRATEGY & TTIP

TUESDAY 24 MAY 2016

Room ASP 1H01 – Members salon European Parliament – Brussels

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Marie ASENIUS, Chef de Cabinet to Commissioner Malmström, European Commission

Every new job in manufacturing can create up to two new jobs in other sectors. And trade deals are very much about creating new opportunities for job creation and growth. So the success of European manufacturing industry around the world is an important goal of Europe's trade policy.

When we started consultations with stakeholders before issuing the strategy, four facts became clear about the EU and trade:

• trade is more important than ever for the European economy. We clearly needed to reconfirm our policy of openness to trade.

• the economy was changing, especially as global value chains are now a central part of the world economies as well as services and digital trade.

• European consumers care about the impact of our trade policy around the world and whether it is consistent with their values.

• the intense public debate on the Transatlantic Trade and Investment Partnership and other trade negotiations.

In the Trade for All communication we sought to address these new realities. We suggested three principles on which our future trade policy should be based:

• Effectiveness. That means concentrating more on today's issues for international commerce. Under Trade for All, trade agreements will focus more on services, on digital trade, on mobility - in addition to our continuing focus on manufacturing, not to its exclusion. We will also become more effective at making sure everyone gets their fair share of the benefits of trade agreements. And we also want to make sure trade deals are properly implemented so that they deliver results we have promised for consumers, workers and entrepreneurs. For this purpose, Trade for All proposes a new enhanced partnership for implementation.

• Transparency: We need to rebuild trust in trade policy. We have made huge steps forward when it comes to TTIP - putting our negotiating documents online and intensifying our contacts with stakeholders. In Trade for All, we commit to the same level of openness in all our negotiations. Transparency also applies to how we work together with other institutions. So we have committed to work more closely with this Parliament. For instance, we already debrief the TTIP monitoring group before and after every round. We are now offering the same to all monitoring groups that want it.

• Values: Even if trade must continue to focus on delivering economic results, it must also be in tune with our values and help promote them around the world. It's also why we are proceeding with our reform of the current system of investment protection agreements, moving to the new

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investment court system. This has now delivered the first results, in the agreements with Canada and Vietnam. It's also why we are going to use trade policy even more as a lever to increase respect for human rights, labour rights and the protection of the environment. Many Europeans are today concerned about the wider impact of the products they buy, whether it's their smartphone, their clothes or event their furniture. We need to act where we can to address those concerns. European trade policy cannot have a positive influence there.

The final part of the new trade communication covers the negotiations themselves. We have a very ambitious agenda in terms of negotiations of bilateral trade agreements. And in Trade for All we talk about the potential for new negotiations that cover important economies like the Philippines, Indonesia, Australia and New Zealand. We are modernising existing agreements with Mexico, Chile and Turkey. And we are looking at new investment negotiations. We will conclude with China and seek to launch negotiations with Hong Kong, Taiwan and with South Korea. At the same time, Trade for All also emphasizes the central role of the World Trade Organisation. The WTO Ministerial conference of December 2015 in Nairobi delivered a landmark deal aimed at ensuring fairer global trade and supporting development. We are now working towards a revitalised, active WTO agenda to tackle both outstanding questions from the Doha Round and a range of new issues. Coming back to the new enhanced partnership for implementation of trade agreements, the challenge here for us all is to make sure that all our agreements actually deliver on what they promise. It is a shared responsibility of the Commission, the Member States, the European Parliament and our stakeholders across the board. The new approach we are working on will build on the current successful Market Access Partnership as well as other mechanisms, including civil society mechanisms established to implement the sustainable development provisions of our trade agreements. We propose to extend and reinforce the exiting approach of the Market Access Partnership (e.g. monthly meetings of the Market Access Advisory Committee) to have an explicit focus on the implementation of FTAs. We would also work more closely with Member States, the European Parliament and stakeholders across Europe for this purpose. And we are thinking of a reinforced mechanism to strenghthen joint activities and advocy with Member States and industry on the ground in partner countries. We are now reflecting on the whole Enhanced Partnership and expect to present our concrete plans in the coming months. In the meantime, I would like to invite you to reflect on how you can contribute to this exercise, how to best inform your members or constituencies on the opportunties of our FTAs and how to ensure regular dialogue and monitoring in the continous process of implementation. Finally, the report that is currently prepared in Parliament on Trade for All will be essential for us as we put the strategy into practice and that we are grateful for the broad support of our approach that we have seen so far. On process, let me stress that we need some time to actually implement our own proposals before evaluating them. We are ready to propose a first review in autumn 2017 with a second review two years later. The EP draft report also shows concern about the place of manufacturing industry in EU trade policy. This is shared by the Commission. That's why the Commission Communication on the European Industrial Renaissance has set a 20% target for manufacturing's share of EU GDP. Meeting that target will involve hard work in the publics and private sector, at EU and national level and across a whole range of policy areas. And trade policy has a role to play. Today we seek to use trade policy to support manufacturing in a broad variety of ways - from removing tariffs to using our trade defence instruments. And it works: look at the over 50% increase in EU goods exports to South Korea in the four years since that agreement is in place.

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EU TRADE AGENDA: TRADE PRIORITIES FOR THE ENGINEERING INDUSTRIES MANUFACTURING AT HEART OF THE NEW EU TRADE STRATEGY

Clemens BETZEL, Head Government Affairs Europe, Siemens

Siemens introduction o 348.000 employees worldwide, 200.000 across the EU o Comprehensive product range

Siemens is active in fields such as wind energy, automation, digital enterprise (Siemens EAD); Products like medical devices, high-speed trains, data analysis software 85% of activities located outside Germany – market access therefore is crucial.

Digitalization o Siemens ‘installed base’ of products, 280 thousand devices generate more than 16 Terabyte data

per month. Example: gas turbine with sensors. Growth especially in digital services. o Siemens is convinced of the power of digitalization. In order to unfold the potential, the EU should

ensure a free flow of data across borders. The Commission’s approach, announced in the new EU Trade Strategy, to set rules for cross-border data flows in FTAs is strongly supported by Siemens.

Trade for all strategy o Siemens supports the Commission’s trade strategy which proposes an ambitious agenda of

negotiations and attempts to make trade more inclusive and responsible. o A precondition for successful trade negotiations is to avoid overloading it. Trade cannot address all

problems. When seeking to address related issues, e.g. anti-corruption, other international efforts such as the OECD guidelines should be considered.

Trade agreements (bilateral and multilateral) are important growth-enablers

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o WTO Doha round (multilateral)

Siemens welcomes the recent expansion of the Information Technology Agreement (ITA) And acknowledges the potential environmental and economic benefits of the Environmental

Goods Agreement (EGA). Siemens commitment to be carbon neutral by 2030. o Bilateral agreements

Siemens wishes a timely adoption of CETA An ambitious TTIP could set standards that could be extended to additional trade partners

o Challenge of transparency: European Commission has made important steps in this direction already. Business is also doing its part, e.g. by internal communication & press outreach.

Christofer FJELLNER, Member of the European Parliament

The importance of Manufacturing in the EU trade strategy should not be underestimated. During the past

few years, the EU’s export has consisted mainly of manufactured goods; those goods represent up to

80% of the annual export value. The largest groups of manufactured goods that are being exported by

the EU include vehicles and machinery, as well as chemical products. But there are, of course, countless

more.

It is also worth noting that the trade balance for manufactured goods is positive in most of the EU

member states, while it is negative for wholesale and retail trade. Clearly, the EU’s comparative

advantage largely lies in manufacturing that requires advanced skills and advanced technology. For

example, European companies are world leaders in developing custom-made machinery.

The conclusion is as follow: The wealth that we are currently enjoying here in Europe, and in other parts

of the world, would have been impossible without trade. More trade means more wealth. And

manufacturing is at the heart of EU trade. Thus, as Members of the European Parliament and the

Committee on International Trade, my aim is to create conditions that facilitate trade across borders and

between nations.

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In Europe, we have already achieved this goal. We have created the single market, and the EU is

currently the world’s largest economy. The next step is to provide European companies with market

access in other countries, and vice versa, through free trade agreements and bilateral investments

agreements. Most recently, we have seen such agreements being concluded with Canada and Vietnam.

But in many places, barriers to trade remain. Today, that means both tariffs and non-tariff barriers. For

example, while the EU and USA virtually cut all tariffs on pharmaceuticals to zero approximately ten

years ago, a study has estimated that the remaining non-tariff barriers are equivalent to a tariff of 19

percent. That money could be better spent on, for example, research and development. Non-tariff

barriers also consist of unnecessary regulatory burdens that could be abandoned through harmonization

of rules and regulations, without lowering safety standards.

Unfortunately, non-tariff barriers can be very difficult to eliminate. An example of that rules of origin.

Almost all agreements, including those negotiated by the EU, have their own special twist on these rules.

As a consequence, products that have undergone the same manufacturing proves may be subjected to

different tariffs depending in which country that process occurred, even if both countries have free trade

agreements with e.g. the EU.

Given the modern world’s complex value chains, companies may have to spend time and money on

handling these rules, or simply pay a higher tariff for products of “unknown origin”. Moreover, the may

sometimes choose manufacturing location based on tariffs rather than efficiency. There are no simple

solutions to problems like this. But for rules of origin, the EU should strive to develop its own model,

incorporate that model in its agreements, and finally promote it internationally via the World Trade

Organization.

We should strive to avoid the inefficiencies and unnecessary costs that tariffs and non-tariff barriers to

trade impose on Industry. Everybody will eventually benefit from such a development. Trade is unique in

that sense; it should not be thought of as a zero-sum game, but rather as a win-win situation.

Then, what is the role of the European parliament in the EU trade strategy? Formally, Parliament only

consents to agreements that have been negotiated by the European Commission. That is the short story.

However, Parliament also serves other important functions.

First, while the Commission receives a formal negotiation mandate from the European Council, the

Parliament can also provide an informal mandate – if the timing is right. For example, in the ongoing

negotiations over a free trade agreement with the US, the Parliament drafted an initiative report that laid

out the Members’ view on a future agreement.

Second, Parliament should listen to society and industry representatives in order to understand the

challenges that different actors are facing. Such dialogue will help politicians make better decisions.

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“Lobbying” is a word that sometimes is met with skepticism. But politicians should not be naïve, and

listening is key; legislators need to speak more to those who are affected, rather than less.

Third, Parliament should act as a kind of cheerleader for various agreements and negotiations. However,

the role does not mean that Parliament should not voice any criticism. The point is that Parliament

should help the Commission and other EU institutions to not lose sight of the goal, as free trade

negotiations are often lengthy and tough. This is perhaps especially important in the ongoing

negotiations with the US, where the process can be side-tracked by a number of factors, including this

fall’s American presidential elections.

As we have seen, one can hardly deny the importance of manufacturing in the EU trade strategy. Again,

that strategy should primarily aim to create conditions that facilitate international trade. The EU is the

world’s largest exporter of manufactured goods. In other words, the EU has clout. Therefore, we should

act as a leader and strive to conclude ambitious and comprehensive free trade agreements and bilateral

investment agreements with our global partners.

Oliver BLANK, Director European Affairs, ZVEI The Electric and Electronic (E&E) industry is one of the most innovative and strong industries in Germany and represents one seventh of German total exports (EUR 174 Billion). Consisting with a total 848.000 employees in Germany and 670.000 in other countries, the E&E industry accounts for one sixth of all German Foreign Direct Investment (FDI) with a total of EUR 39.8 Billion. The E&E industry is also highly internationalized with between 60-85% of ZVEI member turnover originating from business with other countries. The success of this industry thus foremostly depends on international cooperation and open and free markets, with its exports growing by 2.1% in the first quarter 20161. Indeed, the digital transformation of industry results in the development of value chains across businesses, country borders and time zones. EU Trade Strategy 1 ZVEI Foreign Trade Report May 2016 - http://www.zvei.org/en/association/publications/Pages/ZVEI-Foreign-Trade-Report-May-2016.aspx

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The E&E therefore views the new EU Trade Strategy with its focus on promoting multilateral and plurilateral negotiations and FTAs as a positive step. In our view, this is a very good time to take stock of the EU FTAs and the E&E therefore advises the consolidation of existing FTAs and a lessons learned exercise. Consult the industry in spirit of transparency In any case, it is essential that the industry will be thoroughly consulted in the FTA negotiations processes by being granted at least access to extracts of the negotiating documents in line with the EU Trade Strategy’s commitment to transparency.

TTIP For the E&E, the US remains the top destination of exports, which in turn grew by 3.2% in the first quarter of 2016 and totaled EUR 15.9 Billion in 2015. The United States is also a main investment market for the E&E industry, which was last clocked at EUR 12.9 Billion for 2015 alone. Notably, these are pre-TTIP figures, which highlights the future potential of free trade with the United States, provided that TTIP is well negotiated. No TTIP Light The ZVEI Position2 draws certain red lines and for a successful TTIP, the ZVEI demands of the E&E would have to be met. Therefore, a potential TTIP light, which may exclude crucial trade barriers such as un-harmonized standards or ignore public procurement is not acceptable. In this context, existing customs should be abolished. No mutual recognition of standards without prior harmonization For a successful TTIP, the ZVEI views the harmonization of technical standards and product requirements as essential. This issue is further complicated by the discrepancy of the standards at the US local and federal level. Indeed, the US Third Party testing system (Nationally Recognised Testing Laboratory- NRTL) constitutes a barrier for European Manufacturers and is also highly problematic for US producers. In practice, in contrast to the European CE, certification by the leading US private certifier Underwriters Laboratory (UL) means additional five-figure costs and a market access delay of up to 18 months for European manufacturers. Here, it has to be reiterated that many companies of the E&E are SMEs, for which this practice has detrimental consequences. Therefore, the ZVEI recommends to facilitate the harmonisation of standards in three steps:

First Step – End de facto monopoly of UL Second Step – Base standard harmonisation on ISO, IEC and ITU Third Step – Mutual recognition with aim of “One standard, one test, accepted

everywhere”

Here, the ZVEI insists on no mutual recognition of standards without prior harmonisation. Free access to the public procurement markets Another crucial trade barrier is the current access to the US public procurement market. For a successful TTIP, a complete opening of the US public procurement market for European suppliers will have to be facilitated. Furthermore, where individual states deviate on grounds of their sovereignty, grants for such projects should be canceled by the federal government. Establish an International Court for ISDS The issue of the so-called Investor-state dispute settlement (ISDS) has led to a fierce debate in the European public and political spheres. ZVEI agrees that ISDS proceedings are important but are in need of reform. Therefore, an international court with professional judges should be established as a first step, following which the court could first centralize and standardize the hitherto fragmented case law in relation to investment protection, and later on (target date 2030) also rule on international trade disputes (in the relationship B to B and B to C). No harmonization of EU-US Intellectual Property Rights at TTIP Level The ZVEI rejects a harmonization of European and US intellectual property rights by way of decisions at TTIP level. Such harmonization can only be achieved at international level under the auspices of the World Intellectual Property Organization (WIPO).

2 ZVEI Position Paper on TTIP - http://www.zvei.org/en/association/publications/Pages/TTIP-Key-Subjects-Demands-Bottom-Lines-and-Possible-Solutions.aspx  

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Conclusion In line with the EU commitment to transparency, the industry will have to be thoroughly consulted in EU FTA negotiations with at least partial access to relevant documents. To unlock its true potential and in the spirit of mutual benefit, a successful TTIP, will have to meet the key demands of the ZVEI.

Inmaculada RODRIGUEZ-PINERO, Member of the European Parliament

Good evening to you all, First of all, I would like to thank the organisers very much, for giving me the opportunity to participate in this debate. I see some familiar faces around, but many of you I am meeting here today for the first time. All your presentations have been very useful for me to better understand your concerns. The global economy is currently emerging from one of the worst financial crises since the Great Depression, and optimism is returning, creating a slow but precarious recovery in global business confidence and economic activity. While European countries are facing many different challenges, the overall ambition is the same: We need a proactive trade agenda aimed at enhancing Europe’s international competitiveness and creating jobs and business opportunities. Improved access to major international export markets can help the EU to tap into global economic growth. In order to take advantage of the many new opportunities presented by globalisation, great demands are placed on the global outlook of citizens, companies and policy makers. In my view, a good EU Trade Strategy should bear in mind how to best place the EU, as a geopolitical actor, while defending the quality of life that all people deserve. The European Union needs to strengthen its international leadership in a new world outlook, increasingly focused on China and the Pacific area. I see there is a general understanding that international Trade, if well regulated, is a unique tool for progress and development, without the need for increasing public expenditure. However, each Trade

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negotiation raises particular and legitimate concerns among the different sectors because the opening up of new markets brings new opportunities, but also new challenges. For example: TTIP may be seen as an opportunity for many of you if effective regulatory cooperation is established, if good access to the US public procurement is achieved, or if the EU and the US come to a parallel agreement to facilitate the mobility of our highly qualified professionals. However, in order for all types of companies to benefit from new markets and new opportunities to invest, it is necessary to take into account their different sizes and strategic position. That is why it is so important to foresee in trade agreements appropriate transitional periods for the elimination of tariffs, the protection of certain sensitive sectors or the introduction of safeguard clauses. I firmly believe that greater coherence is necessary between the EU´s trade and industrial policies. EU trade policy must promote the development and competitiveness of European industry. In addition, we need strong and effective trade defence instruments to protect our industry from unfair trade practices. In this sense, I would like to underline that we, the social democrats, have showed our opposition to the granting of Market Economy Status to China Trade policy must also pay greater attention to the specific needs of SMEs and ensure that they can fully benefit from trade and investment agreements. Only 13% of European SMEs have been active outside the EU and new ways need to be explored on how to better assist them in their sale of goods and services abroad. Technical assistance or the elaboration of guidebooks on each trade agreement in order to easily identify new opportunities would be good examples. The New EU Trade Strategy is going in the right direction, but it needs to address much further the main global objectives of trade. In my view, as a social democrat, the EU should strengthen the multilateral system embodied in the WTO as the best option for guaranteeing an open, fair and rules-based system and developing new trade rules to support digital trade. In the meantime, it is of course necessary to make progress by means of ambitious regional, plurilateral or bilateral agreements, which should set the model of trade we want to defend. The so-called new generation trade and investment agreements negotiated by the Commission are better focused in terms of including sustainable development chapters. This is a great step forward, but, for these labour, social or environmental protection provisions to have any real impact, they need to be fully enforceable. The monitoring and evaluation of existing agreements must be a key priority for EU trade policy. In this sense, the Commission should establish homogeneous and specific quantitative and qualitative indicators to evaluate the efficiency of each trade agreement. Last but not least, I am a European Parliamentarian and my work is to serve as the voice of citizens and sectors of all kinds. If you wish, please do not hesitate to contact me. I hope that this debate will only be the beginning of a long cooperation between you and me, Thank you very much for your attention.

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Peter Bay KIRKEGAARD, Senior Adviser on Trade Policy, Confederation of Danish Industry

The Confederation of Danish Industry is the main voice of the Danish business community. Our 10.000 members are active within industrial manufacturing, food processing, services etc. Our members are very global and rely on being able to easily import and export goods and services. We therefore strongly support a proactive and offensive EU Trade Policy. Our members are concerned about the increasingly negative narrative on trade that translates into an increasingly protectionist rhetoric in certain circles, also in the EU. We need to talk about how to improve the competitiveness of EU companies - not how to increase protection of EU companies. That way we will never win in the global competition. TTIP is obviously our main priority. We see great benefits in an ambitious trade and investment partnership with the US, which is the most important market for Danish exports outside the EU. An ambitious agreement means eliminating tariffs on both agricultural and industrial products, improving access to public procurement, sound investment protection, and not least regulatory cooperation that can ensure that we get a living agreement, where future non-tariff measures can be prevented. CETA will soon be ready for ratification in the EU Parliament. We should remember that on balance, the trade agreement is an extremely good agreement, where tariffs on almost all trade will be eliminated, and where EU companies have been given access to public procurement in Canada – even at the state level, where Canadian companies from other states don’t always have the same access. We therefore urge the European Parliament to ratify the agreement when given the opportunity. Not doing so would jeopardize the entire EU Trade Policy. Japan is an important trading partner for the EU, not least for Denmark, as we have a major export of pork to Japan. This export is seriously threatened if TPP is ratified this year and US agricultural exports are given better market access on the Japanese market. We therefore call on the European Commission to ensure that an ambitious agreement with Japan is concluded this year. An integral element of such an agreement is to ensure future regulatory cooperation that can address new non-tariff measures. We lack this instrument in the EU-South Korea free trade agreement and this has led to a number of new market access barriers on the South Korean market, which are difficult to address. Mercosur is an extremely interesting, but also difficult, market for Danish companies. They are faced with extremely high tariffs when importing into the Mercosur area. Moreover, the extensive use of local content requirements in the region requires companies to invest there for the wrong reasons and dilutes the benefits of global value chains. We are therefore very encouraged to see the trade negotiations being resumed and hope for their swift conclusion. China has been high on the agenda in Brussels over the last year, but judging from the debate, you would think that our relationship with China was all about whether or not to grant them Market Economy Status. However, we need to remember that our relationship with China is about much more than a rather technical question of how to treat Chinese imports in the event of anti-dumping investigations.

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China is fast becoming one of our most important markets. We therefore need to have a more forward looking approach to China, where we engage constructively with the Chinese leadership in a discussion on how to improve market access and a rules based trade

TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP – WHAT’S IN IT FOR THE ENGINEERING INDUSTRY?

Adrian HARRIS, Director General, Orgalime

Orgalime represents a healthy industry that is a major employer in Europe (1,900 billion turnover and 10.9 million people and growing), represents over a third of the EU’s manufacturing exports and is a significant importer because of its extensive supply chain. European engineering leads worldwide in many areas of technology and manufacturing. The EU’s trade strategy should therefore, in our view, focus on shaping globalisation and improving the international competitiveness of the EU’s industrial base.

We are pleased that currently the EU is focusing on the EU trade agenda. Our export-oriented industries have been profitable thanks to our external markets. Most of the recent growth in our sectors has come from business outside the EU. Ideally we would wish for the WTO process to work, and, in parallel, to have bilateral agreements.

Orgalime welcomes the European Commission’s Communication ‘Trade for all - Towards a more responsible trade and investment policy’ as it places trade at the top of its political priorities: this is part of what we see as a policy package which must in the end focus on the core issue of jobs and growth.

We support the Commission’s plan to advance the agenda of trade liberalisation, through the multilateral, as well as the bilateral and plurilateral paths.

We welcome the Commission’s proposals to re-energise multilateral negotiations and to restore the centrality of the WTO as a trade negotiation forum.

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Orgalime appreciates the focus on SMEs in the forthcoming trade agenda, as greater participation of SMEs in FTAs would result in the creation of growth and jobs.

On Free Trade Agreements, the Transatlantic Trade and Investment Partnership (TTIP) is the most important as the USA is currently one of the world's larger markets for our industries.

TTIP is first of all a strategic issue: in the absence of progress on the WTO front, who will shape the governance of the trade system? We would like to see a comprehensive, exemplary transatlantic agreement for the liberalisation of trade in products and services. Either we achieve this soon or we will lose out on potentially shaping future trade rules.

More specifically: the companies you see here today are for the most part present on both sides of the Atlantic. It’s been more efficient for them because of different standards, rules and traditions. In the EU we by and large have an internal market for products which works; in the US this is a little less obvious. So far our companies overcoming both tariff and non-tariff barriers to trade will bring about tangible cost benefits. What do we mean by this? Our focus is on standards and regulation- two different but often intertwined things.

Standardisation and conformity assessment procedures should facilitate trade, not become technical barriers which they are today in some cases. Therefore, we support the transatlantic negotiations as a way to improve the cooperation by reducing as far as possible the existing differences in this area. We believe that the alignment with international standards from ISO, IEC and ITU, is the way forward for the removal of technical barriers to trade between the EU and the USA.

We ask for an annex on the engineering industries, because we expect it to contain specific commitments or steps aimed at reducing costs stemming from regulatory differences between the US and Europe in our sectors. These are sometimes due to history but often they are not justified. But just as our internal market took years to develop and deliver so this will too: it starts with regulators talking to each other and thinking together at least for the future. This would be also called living agreement. If we ask for a focused approach on our industry, it is because this is where the real gains for our companies are. We know it’s complex but we’ve managed it quite well here in the EU and so it is not impossible to achieve.

A final word – we have been active on TTIP for many years and still are. We were present at the Hannover Messe where there has been a call from both the US and EU side at the highest political level, with Obama meeting Merkel, to speed up negotiations and to conclude the deal before the end of the Obama term at the end of 2016. Today, we would like policymakers in Europe to continue to focus on an international trade agenda. Trade works for our industry and with our clients in the EU investing less today trade becomes all the more important. In this context, we really believe that the right type of TTIP will make a big difference.

I wish everyone a fruitful discussion, and I very much hope that the ideas and exchange during this evening debate will help to come to a common understanding about the directions of the European trade policy and its implications for the European manufacturing companies.

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Hendrik BOURGEOIS, Vice President European Affairs, GE

From our founding 140 years ago by Thomas Edison, GE has been at the forefront of innovation. From the first incandescent lightbulb to the first voice radio broadcast, from jet engines to x-ray machines, high efficiency gas and wind turbines, and now to the Industrial Internet, GE has sought to innovate solutions to the world’s most pressing problems—including the need for reliable energy, clean water, affordable healthcare, and safe transportation. While founded in the United States, GE is today also proud to be a European company. GE has over 100,000 employees in Europe, more than 120 manufacturing sites in Europe, achieves over € 23 billion in sales revenues in Europe, and it has located the global headquarters of a significant number of its businesses in Europe (these include those of GE Renewables, GE Oil &Gas, GE Grid Solutions, and GE Power Services). GE achieved such remarkably strong European presence and success without having the benefit of a well- functioning, ambitious and comprehensive trade and investment partnership agreement between the EU and the US. Yet GE has been a strong advocate of the need to conclude such an agreement, to the same extent as a significant number of European based companies with a deep economic footprint in the US, including for example Siemens, Airbus, and BMW. There are many reasons why even companies like GE, who stand to benefit less in terms of direct market access from the initiative than for instance SMEs, care deeply about TTIP. First, TTIP will further increase our ability to do what we already have done so well: better accessing our respective markets as export destinations (and as sources of imports of inputs) to help support thousands of jobs in the US and EU, and also the thousands of SMEs that form our supply chain across many States in the US and many countries of the EU. And access to markets is only part of the story. Competing transatlantically also means being able to service our products, finance our customers, innovate across our borders, attract and retain top talent, and help our customers improve their efficiency by analyzing the data derived from their installed base. To this end, an increased ability to move people, capital, technology, and data are also critical elements of our transatlantic successes. But second, and perhaps more importantly, TTIP holds the promise of setting the standard for global trade and investment protection rules. One of the most fundamental misconceptions of TTIP is that it is just about “opening the EU economy” or allowing EU firms to “better access the US market”. In fact, both the EU and US economies are already some of the most open in the world. Significantly, to the extent the two largest and most open economies in the world agree on those rules, TTIP will de facto set and raise the standards of global trade for the future, because joint US/EU benchmarks will provide strong incentives for other countries to follow. A related misconception is that there is little cost to doing nothing. In fact, failure to advance TTIP and their high standards around rule of law, level playing fields, IP protections, transparency, SOEs, environmental protections and other matters will cede the field to other trade blocs and multi-lateral trade architectures that are far less protective of these values, and which will not create the environment conducive to success for US and EU companies. The stakes are therefore high.

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By and large, and certainly relatively speaking, transatlantic firms compete and operate globally under high (either US or EU) standards. GE, like many multinationals, doesn’t discriminate in its labour and employment practices, workplace safety rules, adherence to environmental rules, transparency and competition law standards, etc. based on where we engage in commercial or industrial conduct. We strive to adhere to these standards in a uniform manner, wherever we do business, even in countries where from a formal perspective high standards either do not exist or are not enforced. This means that we often compete with firms who do not operate under the same standards, and we occasionally lose business or operate at higher costs because of this: we often compete with state owned enterprises that enjoy special advantages, or for example with firms that invest less than we do in workers’ safety, emission reduction programs, or in anticorruption compliance resources. Herein also lies the importance of a successful TTIP agreement for transatlantic firms like GE, as a successful agreement would create a more level playing field, projecting on a global scale Western values – which are increasingly under threat –of market based economy, protection of property rights, democracy, and the rule of law. Recently, EU Commissioner for Trade Cecilia Malmstrom illustrated this point very convincingly when she spoke at the OECD Integrity Forum in Paris.3 In her speech, the Commissioner explained that the EC will aim to include ambitious anti-corruption provisions in future bilateral trade agreements, starting with TTIP. This could ultimately result in anti-corruption commitments in future EU and US bilateral FTAs to enact legal tools, targeting the demand and supply side of corruption, covering all matters covered in the trade agreement, and increasing transparency and reporting. Leaving aside the moral and ethical drivers, companies like GE that operate under the strict requirements of the US Foreign Corrupt Practices Act or the UK Bribery Act in any event, have a clear and obvious strategic advantage in ensuring that strict anticorruption standards are adopted and adhered to on a global basis. Another example would be the establishment of much-needed rules for government procurement in TTIP. Unfair government procurement processes can significantly undermine market access for infrastructure companies like GE, whose clients are often governments or government-controlled companies, such as airlines and utilities. For instance, ambiguous procurement guidelines can effectively prevent transatlantic companies from bidding. A TTIP requirement of transparent and timely publication of tenders, assurance that technical specifications focus on performance and functional requirements rather than descriptive characteristics like a particular design, and requirement that tenders be treated fairly, impartially and confidentially, would help level the procurement playing field on a global scale. TTIP is facing strong headwinds in Europe, to a significant extent because of a misplaced fear that it will lead to the lowering of European standards. This is exasperating for many transatlantic firms competing on a global basis. The reality is not only that in many areas US standards are higher than European ones (for instance for medical devices or automobile emissions),4 but that US and EU standards of trade and investment are often both very similar and much stronger than those of other regions in the world. Many TTIP opponents disregard this fact and make exaggerated claims of differentiation. In a way, this is unfortunately not surprising, as this happens often among communities that are very closely related: to see oneself too much reflected and mirrored in a close neighbour threatens the sense of self, and one’s own perception of superiority. Failing to achieving this partnership agreement would therefore constitute a painful and unfortunate missed opportunity of raising global standards of protection for consumers, workers, the environment, and health & safety, all for the wrong reasons.

3  Values  in  EU  Trade  Policy  –  Targeting  Corruption,  19  April  2016,  4th  OECD  Integrity  Forum,  Paris,  http://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154461.pdf    4  See  in  this  respect  Christian  Odendahl,  How  To  Save  the  Ideas  Behind  TTIP,  CER  Insight  11  May  2016.      http://www.cer.org.uk/insights/how-­‐save-­‐ideas-­‐behind-­‐ttip    

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Dora DEBOEURE, Product Validation Expert, Barco

Barco, a global technology company, designs and develops networked visualization products for the Entertainment, Enterprise and Healthcare markets. We are the world leader in cinema projectors and in healthcare imaging.

Barco has its own facilities for Sales & Marketing, Customer Support, R&D and Manufacturing in Europe, North America and APAC. Barco is active in more than 90 countries with over 3,300 employees worldwide of which half is based in Europe. Barco posted sales of 1.029 billion euro in 2015.

With this I would like to support TTIP and provide some feedback on how we see and experience trade barriers on regulatory and standardization. Some points call for action at the US side but some proposals are also done to improve at the EU side.

Standards are for a big part drafted by international organizations such as ISO, IEC, CISPR etc. We would like the US to adopt the international standards on both test setup specifications as test limits.

By diverging from the international standards, it is almost impossible for an EU company, which has tested against international standards to compete with an American company on any significant project. This is why:

• We need to establish a gap analysis of the required US standards for the project (for instance NEMA) with the international standard of which we know we comply with.

• We need to test according this standard and usually EU test laboratory are not familiar with these standards nor are they accredited.

• This leads to extra costs to have our products shipped to and tested in an US lab in the presence of one of our engineers to assist the lab personnel.

• By the time we can demonstrate compliance with the US requirements, we have a considerable set back in time and cost towards our US competitors.

I hope that this is considered as to “have significant impact”, according to the issuing authority (see point 4 Orgalime paper 2015/04/21)

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Another point to be taken up in the US is how UL certification on end product level requires all safety critical components and all subparts to be UL certified. UL simply do not except ETL certification although that is also a certification from an NRTL lab. UL should at least accept all certificates from US & Canada NRTL labs.

We provide medical displays for MRI scanners. If our customers who produce those scanners want this scanner to be UL certified, we are obliged to apply for UL certification on that medical display. If we would be free to apply for ETL or CSA that would lead to a certification cost which is half of what we pay to UL.

At the EU side I would propose to adopt the US way of working when new standards and/or updates to existing standards come into place. While the EU withdraws the applicability of a standard for ALL products being placed on the market as from a certain date, the US only requires newly designed products to apply with the updated version or new standard.

In the EU, the updated version of a standard or the replacement of a withdrawn standard applies to both new products (designed & manufactured after applicability of the update or new standard) AND existing products being tested and certified according the old version or previously applicable standard.

Consequence is that the EU requires all products which are tested & certified against that standard needs retest & recertification. This means again extra cost and time and the maintenance of 2 certificates and 2 test reports as the US doesn’t require existing products to recertify and test against the new standard.

But what even is worse, is that to enable us to comply with the replacing standards, we sometimes need to redesign existing products and replace critical parts such as power supplies.

To my opinion we would do ourselves (EU SME’s) a bigger favor than the US industry by leaving this system and changing to the US way of working. For most markets, the US only require certificates against new standards on new products which are certified from a certain date and not on all products which are already on the market for years.

Further on I want to draw the attention to the need of synchronization between EU and US on the applicability date of an update or new standard and withdrawal date of the superseded version or standard. Now we face the fact that we need to comply with a new standard in the EU while we need to comply with the old standard in the US.

Right now the whole industry of Information Technology and Audio, video and similar electronic apparatus are facing the update of the applicable safety standard. Again this leads to 2 test reports, 2 certificates, extra time and extra cost.

As we request the US to adopt the international standards without extra or more stringent requirements, I would like to ask the EU to prohibit that the Member states of EU are free to implement EN standards in their national standardization while making them more stringent (Germany / Great Britain).

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Carsten DANNÖHL, EU Government Affairs Manager, Caterpillar

Thank you very much for the invitation and the opportunity to present our views – and support – on TTIP! Caterpillar is a long-term supporter of global trade liberalization, preferably through multilateral agreements within the WTO. As a pro-trade advocate, we strongly support a comprehensive outcome of TTIP, even if we already have zero tariffs on machines between the US and the EU since the Uruguay round in the mid-90s and only a few tariffs left on parts and engines. From our experience around the world, as a producer of investment goods, trade liberalization is good for our customers, for growth and jobs, for our employees and for our business.

That is of course an easy statement to make. But it is much better if you can back it up with sound data and facts. A recent study – TTIP and the EU member states – published by the American Chamber of Commerce to the EU showed that all – but one – EU member state will benefit from TTIP. It shows that TTIP has positive impacts on GDP, wages, jobs, growth, consumer prices… If TTIP is going to bring us growth and jobs in Europe and the US, we would be fools to decline that potential:

For Caterpillar, we have about 20,000 employees in Europe. Our activity is part of machinery. So of course we should care about the findings of the study: +2,2% production increase for machinery in Belgium, +1,4% in France, +0,7% in Germany, +3,2% in Poland, +0,8% in the UK. And it is not just about big corporations like us. Many of our customers, suppliers, business partners and competitors are SMEs.

Our 20,000 employees over here don’t produce uniquely for Europe. As an example, we make articulated trucks in the north of England: 6 out of 10 last year went to the US. We make tracked tractors and loaders as well as wheeled excavators in Grenoble: 5 out of 10 went to the US. We make paving equipment in the north of Italy: 3 out of 10 went to the US. Identically, many of the Caterpillar products our customers use in Europe are produced by the 50,000 employees we have in the US. We need common machines for highly regulated areas like the US and the EU to keep it this way.

We cannot lose the opportunity to reinforce our regulatory cooperation, where it makes sense. There is a lot happening already in our specific sector, the construction equipment industry, but mostly out of goodwill. Our market is global, and new competitors are emerging. We cannot afford to have diverse requirements from highly regulated areas, especially when they are aiming at the same results for safety, environment, or technical standards. Against this background we are very concerned about the slow progress of negotiations in the area of regulatory cooperation for engineering industries! Of course, legislators on both sides of the ocean are independent, responsible and have the initiative,

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but TTIP should deliver the framework to force them to cooperate before they agree to disagree. We jointly have the ability to shape international standards, within ISO for our sector. Otherwise, the next standards may very well be decided elsewhere.

As Caterpillar, we also believe TTIP gives us the opportunity to align our efforts to open markets in third countries. As an example, the EU and the US should adopt the same approach when it comes to restrictions on remanufactured products, often applied by third countries. The Trans-Pacific Partnership Agreement (TPP) or the EU-Vietnam FTA are good examples of common language to support the circular economy through remanufacturing. It’s a low hanging fruit – and we don’t have such many. So let’s replicate this language in TTIP! Thank you.

Michael BRYAN, Acting Head/Manager European Government Affairs, Jaguar Land Rover

Jaguar Land Rover made the following statement:

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David MARTIN, Member of the European Parliament

First of all, the S&D group supports a progressive TTIP which can deliver jobs and economic growth in the EU. It should of course facilitate exporting our goods and services to the US but also exporting our values. It is important to have an ambitious TTIP that covers goods, services, IPRs (e.g. GIs) and public procurement among others. We said clearly we cannot accept a TTIP light which could not bring substantive benefits to EU businesses or EU citizens. Having said that, in the Parliament's TTIP resolution of 8 July 2016 we made clear what our red lines are: 1) an enforceable trade and sustainable development chapter (following the US model) featuring the highest level of workers’ rights and social and environmental protection; 2) the full exclusion of public services; 3) maintaining the highest level of health and safety protection in compliance with the EU precautionary principle; 4) the replacement of ISDS with a transparent public system where, among others, publicly appointed judges take the place of arbitrators. On the latter I appreciate that due to the pressure of the EP and in particular of my group the Commission has now moved towards ICS which reflects most of, albeit not all, our requests. We encourage the Commission to push the US to accept ICS. ISDS is for us dead and a TTIP including ISDS will never get the support of the Parliament. The EU manufacturing industry can indeed benefit from TTIP through lower tariffs, elimination of non-tariff barriers also in the context of regulatory cooperation, access to US public procurement market which is currently very protectionist and the rules-part of the agreement including notably IPRs, energy and trade facilitation provisions. I believe regulatory cooperation is crucial as it could lead to the elimination of unnecessary procedures such as double testing and inspections which are particularly burdensome for companies and especially for SMEs. Those resources could be used more effectively by businesses. However, this is also a very sensitive issue. We need to make sure that our high standards of health and safety protection will be maintained in line with the EU precautionary principle. This is something EU citizens are very worried about. Also, now that the regulatory cooperation body has been withdrawn it is not very clear how the cooperation will be developed between transatlantic industries, regulators and legislators. I believe that legislators on both sides should be at the centre of the process. It is still not certain at this stage whether TTIP will include a chapter on energy and raw materials but if so this could also benefit EU businesses. EU companies could have access to cheaper energy and raw materials and therefore compete on a level playing field with US businesses. It would be interesting to hear whether there have been recent developments in this respect in the negotiations. Another fundamental point is that TTIP can benefit not only big companies but in particular SMEs. We welcome the inclusion of an SME chapter in TTIP. We hope it will provide for more than a website where SMEs can find useful information about how to access the US market. It should foresee also actual measures that can effectively help our SMEs to export to the US. A final issue I would like to stress is that TTIP is the most transparent EU trade negotiation so far. It would be unfair not to acknowledge the steps forward that the Commission has made in this respect in

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TTIP. The mandate has been published as well as all EU negotiating proposals and MEPs have access to all TTIP confidential documents. Transparency increases trust in the EU institutions and together with good and genuine communication is fundamental to inform civil society about the real benefits that TTIP can bring and not only about its threats. The Parliament will remain vigilant throughout the negotiations to make sure that the Commission delivers on its promises. Finally, I know this was probably discussed in the previous part of the meeting. However, since unfortunately I could not attend it, I believe it is important in a European Forum for Manufacturing event to highlight the role that trade defence instruments play in protecting the EU manufacturing industry. The EU needs modern and effective trade defence instruments to face the unfair competition from third countries. I hope the Council will reach an agreement soon on the trade defence instruments reform which has become now urgent. I also want to stress the strong position that the Parliament took against granting MES to China. This could seriously undermine the competitiveness of the EU manufacturing industry and put thousands of jobs at risk. The steel crisis in the UK is a good example of the challenges our industry is facing.

Hannu TAKKULA, Member of the European Parliament

TTIP in a bigger picture It has been widely proved that international trade has a huge potential to open new markets and create new jobs and inject a positive boost for growth in our economies. At the moment the Transatlantic Trade and Investment Partnership Agreement (TTIP) is one of the biggest international trade agreements that the EU is undertaking, or indeed has ever had, or, even probably will have. A lot of publicity and resources is put into this agreement. However I do not want to focus on the TTIP agreement itself, I would like to look at wider context the and raise up some issues relating to international trade and TTIP in the "bigger picture". The ongoing trend in the EU is to have bilateral agreements with third countries. Obviously the EU respects and uses global WTO standards, but over the years we have seen that, more and more, we need a large numbers of experts to research the difference in rules and regulations between the EU and one specific country. If the EU and the US do not plan international trade agreements with third countries in advance, agreements may not necessarily be compatible with a trade agreement already negotiated. This kind of method will result in a messy spaghetti bowl of agreements which actually do not help the international trade at all. This may also create the need to invest, a lot of, money in legal fees and in technical departments to find compliance. This is especially the case for manufacturing companies. WTO rulings will help. However, ambitious trade agreements must go beyond this level and we (the EU and the US) should be able to create international standards and mutual recognition with more than one country at once.

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Another important point to remember is that implementation does not happen overnight. I was on a delegation to South Korea last week and the majority of the meetings focused on the implementation of the EU- South Korea Free Trade agreement - which is still an ongoing process. It was also interesting to hear the South Korean opinion on the implementation of their agreement with US which, apparently, has taken rather a long time to reach an operational stage. TTIP is a bilateral agreement between two big economies. Many reports, findings and studies have shown that there is a huge potential to increase the trade between the EU and the US if we manage to remove the trade barriers currently faced by many sectors now. At this stage of the negotiations, our negotiators are getting to the most difficult part when they start to table offers on the most sensitive of these sectors. Manufacturing is one of the sectors that face difficulties to access the market in US because of the technical barriers. The main goal of the future agreement will be to decrease the number of different product controls and standards. It will be extremely important to find a way to allow mutual recognition of technical and safety requirements, and a certification process for products to be recognized in both markets without the double costs of certification which is currently the situation. As the technical and safety requirements and certification in the EU and the US differ widely, the negotiations regarding regulatory co-operation for machinery and engineering are still in process. As regards public procurement and the possibility for our companies to at calls for tenders, the "Buy American Act" is one of the core legislative barriers faced by the machinery sector, and indeed by many other sectors. According to this Act 60 % of the components used in public procurement must be made in the US. This actually refers to the share of costs, not just the material share of the product. This legislation was designed to ensure that the biggest trade flows are kept inside the US and have made it nearly impossible for European companies to break into the US market. This is also one of the main reasons Canada was so keen to have a Trade Agreement with the EU- to diversify from trade with the US. Canada has been severely hit by the "Buy American Act". A good example from my country, Finland, is icebreaker ships. Finland is the leading country in the world for the manufacturing of icebreaker vessels, however access to the US markets is blocked due to US legislation known as the Jones Act which encapsulates the same principles as the "Buy American Act" for the shipping sector. Another technical barrier in the US is the Lacey Act which requires companies exporting to the US to provide customs documentation. All the necessary documentation must be delivered 48 hours in advance of the ship being loaded. If the documentation is incomplete, the exporting company will be subjected to a high fine. This is a good example of the administrative burden which often hits small and medium-sized companies the hardest as they lack the resources for such kind of administrative work. These two examples illustrate some of the problems faced by EU countries when trading with the US. Unfortunately EU countries face more difficulties to market access in the US than American companies have for market access to European markets. We need to find the right balance and an agreement which is beneficial to companies from both sides of the Atlantic. Competition is good both for companies and for consumers. Regulatory co-operation is the key element. We need more flexibility. Here I emphasize we must not weaken rules on safety, we need to relax the existing administrative requirements and technical standards. Mutual recognition will most likely be the key element in achieving this goal. There is no point, or sense, for manufacturers to have two product designs: one designed for the European markets and one designed for the US market. Such practices are unsustainable and do nothing to help our economies. I would like to stay optimistic about this agreement. Equally I hope that we will be able to conclude an ambitious agreement mutually beneficial to both sides. I would also like to underline that even with the

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political pressure we are now getting from the US before their elections we must have the courage not to give in on the main demands we have set out for this agreement. However, with the current proposals as they now stand, I must say, in my opinion, that concluding the negotiations before the US elections in November seems quite unrealistic. If any negotiations are to be finalised by the end this year, it will most likely mean that we will have some form of light-TTIP agreement. At this point it is impossible to say what that agreement would include but as far as I understand the current state of play, I doubt that such a "light" version would have a proper chapter on public procurement. If this were to be the case, would it be better to rely on existing international agreements or settle for a light version? Hard to say. I sincerely hope the final version will factor in all that we had planned and this agreement will create new opportunities for economic growth for both European and American consumers and companies.

Olle LUDVIGSSON, Member of the European Parliament

I believe a good trade agreement with the US could be one of the most important parts of an ambitious

agenda for more and better trade for Europe. I am convinced that potential effects from common

standards and access to the US market will create jobs in Europe and potential increase of economic

growth.

As for Sweden; Swedish trade unions and employers have a tradition of trying to agree on these kinds of

issues of high relevance for the Swedish economy and the jobs.

The Swedish model means that the trade unions and the employers negotiate terms and conditions

rather than being bound by laws in the labour market area. This principle goes back to the 1930's. This

has been a successful concept for Sweden where the trade unions and employers together have been

able to handle changes and variations in the labour market. It requires strong, responsible and pragmatic

partners with a will to compromise to reach political consensus. It creates a stability which some other

countries may lack in the labour market area.

This cooperation has also lead to some common strategies and policies, such as the one made on TTIP.

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In line with this tradition the Swedish union for industrial and metal workers, IF Metall and Unionen which

is Sweden’s largest trade union on the private labour market, agreed with Swedish Engineers, the

Association of Swedish Engineering Industries, and The Swedish Association of Industrial Employers on

a common policy for the TTIP-agreement. These organisations had a lot in common in the way they

viewed the agreement and the most important parts of it. But of course, a lot of compromises had to be

made as well.

The policy states that both trade unions and employers within the industry support the establishment of a

trade deal between the EU and the US, since it both enforces Swedish competitiveness and gives a

greater opportunity to both keep and create jobs in Sweden.

We value free trade. A specifically important part for the Swedish trade unions and employers was that

the trade of goods and services must be able to develop freely and counteract protectionism. At the

same time, some restrictions would be needed to protect national sovereignty and workers' rights.

A big win for the trade unions was of course getting the employers on board with the demands for

respect of workers' rights, and agreeing to the fact that a trade deal with the US should never stop the

member states from ensuring ILO conventions in their respective countries. The policy also states that

it's important that the new trade deal with the US will confirm the right to legislate in the areas health,

environment and safety.

For the employers, one of the most important things in this deal was the ISDS. Both parties agree that

the investment protection should not challenge countries right to legislate nor the right to nationalize

when it's motivated by the public interest. They also agreed that it is crucial for companies who are

affected by decisions of the public should have the right to have their case heard in a process that is

transparent and independent of the parties in conflict.

The trade unions and the employers in Sweden are together forming a driving force for a more open and

inclusive market with better terms. They are on the same side in the sense that they don’t want to

compete with working conditions or standards.

To summarize, the key to this kind of agreement is the mutual interest from the trade unions and the

employers. Since joining together gives them stronger voce, that means thay also get more power in tis

deal.