- Department for Business, Innovation & Skills
- Part of:
- Transatlantic Trade and Investment Partnership (TTIP) and Consumer protection
- 1 September 2015
Explains how the EU-US free trade deal will make trade easier and cheaper by reducing unnecessary differences in regulation.
Global free trade agreements usually focus on cutting tariffs, and this is an important part of the TTIP negotiations between the EU and the US. However, well over 50% of the projected benefits of the EU-US free trade deal are expected to come from reducing unnecessary differences in regulation and duplicate safety checks. There are many examples of EU and US regulations and checks which have slightly different requirements, but achieve the same level of quality and safety. These differences can cost businesses time and money.
Making trade easier
The trade deal is not about weakening existing laws or standards, including those around food safety, the environment, health or labour. What the agreement will aim to do is identify where unnecessary regulatory differences and overlap exist so that mutually recognised rules, standards and testing procedures can be agreed to make trade easier. Where this isn’t possible, other solutions will be sought. For example, if separate EU and US tests must still be carried out, it may be possible for the same testing facility to carry out both tests.
More consistent and straightforward product and trade regulations will benefit all exporting businesses, but small and medium-sized businesses stand to gain the most. Currently, many smaller businesses do not have the time or budget to navigate the complex rules and regulations required to export to the US. Simplified regulations will make it easier for them to start exporting there. For those that are already exporting it will become easier and cheaper.
Developments in technology and innovation mean new products are entering the market all the time. As well as looking at existing rules and regulations, a successful trade deal between the EU and the US will also influence the way tests and standards for these new products are developed. Processes will be set up to help regulators from the EU and US work together to agree common standards.
EU negotiators have specified that TTIP will not affect the way the EU legislates on food safety. Any food entering the EU must meet EU food safety rules. TTIP will not change that. Reducing unnecessary differences in regulation could lead to real benefits for UK food and drink producers. For example, complying with some US requirements on top of EU regulation can be expensive for UK companies, without necessarily offering consumers any additional safety. TTIP is an opportunity to get rid of these unnecessary costs.
TTIP will not prevent the EU and UK from bringing in and upholding labour regulations to protect workers. This includes aspects such as:
- protecting the right to collective bargaining (including forming and joining trade unions)
- ensuring protection against discrimination in the workplace
- commitments to eliminate forced labour and child labour worldwide.
We expect TTIP to call for domestic labour standards to be enforced. One of the overall aims of TTIP is to make sure that trade is encouraged without reducing the enforcement of labour laws or undermining our social and environmental policies.
TTIP will not hold back action on climate change – the EU’s climate change policies are not up for discussion in the negotiations. It will not affect our obligations under the UN Framework Convention on Climate Change (UNFCCC) to reduce carbon emissions, nor prevent the EU and US from introducing new environmental and low carbon legislation.
The social and economic impacts of TTIP will also be examined by an independent sustainability impact assessment. This will look at the likely effects of TTIP on sustainable development and propose measures to minimise any potential negative impacts.
Published: 1 September 2015