Richard Bruton (Dublin North Central, Fine Gael)
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I thank the Chairman and members for the invitation to say a few words on TTIP and hopefully to take questions from members to the best of my ability. During Ireland's Presidency last June, an agreement was achieved at the European Council to start negotiations on a trade and investment agreement with the United States. It was an historic agreement and clearly for Ireland, with its deep involvement with the United States over many years, seeing it to its conclusion was something in which we had a significant interest. A recommendation and a mandate were given to the European Commissioner, Commissioner De Gucht, to commence negotiations. The disposition was that we should seek to be ambitious in three broad areas. The first was market access, which basically is about tariffs and obstacles that stand in the way. The second concerned rules addressing shared global trade challenges and opportunities and the third was in respect of regulatory non-tariff barriers.

Since the Council's decision, five negotiating rounds have taken place, the most recent one being last week in the United States. As I stated, three areas are involved. The area of market access concerns goods and services and public procurement. The first tariff offers, that is, the immediate or phased elimination of import tariffs on an extensive list of goods, were exchanged earlier this year and I expect there will be further work on these offers. They exclude food and agriculture, so it pertains to non-food goods. As for services, I understand the United States tabled its first offer last week.

The EU side is still working on its first offer but expects to have it ready soon. I understand that in depth negotiations took place last week on procurement but we do not yet have the details from the Commission.

The second broad category comprises rules on trade facilitation relating to the customs systems between the EU and the US; rules on state-owned enterprises, which should operate along commercial lines - in other words, they should not be subsidised to enter into other markets; rules on raw materials and energy, in respect of which the EU is looking for access to US oil and gas exports, which are currently restricted; and rules on labour and environment, in respect of which there will be no weakening of standards or protections. Coming to agreement in these areas will also serve to set standards for other free trade agreements with trading partners, reduce complexity for small companies and generally open markets in a more transparent manner.

The most difficult and complex, but perhaps the most important, aspect of the negotiations is on reducing regulatory burdens. This will involve a multiplicity of sectoral legislation, particularly in areas like financial services, the environment, health and public safety. While there are legitimate but unfounded concerns about lowering regulatory standards, the goal is to maintain high standards of public protection while finding a way to prevent them from representing unacceptable barriers to trade. This would involve issues such as mutual recognition of the way in which one assesses a product. The pharma sector is a good example, in respect of which we could avoid the necessity to run trials on the same product in the EU and the US in order to give it recognition. Mutual recognition would open up possibilities in that regard.

Progress in respect of regulation through harmonisation, mutual recognition or convergence is the most important area because the results of studies show it will yield the biggest net gains. The Commission's impact assessment suggests that between two thirds and four fifths of the gains from a future agreement will come from cutting red tape and having more co-ordination between regulators. It is important to see this as a two part issue, involving both the process of how regulation is enacted and the sector specific solutions being negotiated. How regulations are made needs to be more transparent, with regulators deepening their relationships in order to address emerging issues together. In addition, real progress on issues like car safety standards and ending double inspections at pharmaceutical and medical device plants should reduce costs for both businesses and regulators. Implementing agreed international finance rules in a compatible way is an example of how immediate and positive impacts can be achieved for EU and US economies as agreements are reached. Bringing about regulatory convergence will help exporters and investors by reducing the cost of doing business across the Atlantic. It will make it easier for companies to comply with US and EU laws at the same time. Extending the scope of mutual recognition across many professional bodies, for example, would make it easier for professionals to source new job opportunities on both sides of the Atlantic.

It is important to note that while regulatory aspects are one of the main elements of the TTIP negotiations, nothing in the negotiations would prevent or undermine the rights of both sides to regulate and the level of regulatory protection on both sides, whether in respect of the environment, food or consumer safety. The European Commission is acutely conscious of the need to engage widely with stakeholders in these negotiations and it is doing so in a number of ways, including stakeholder briefing sessions during and following each round of negotiations, a dedicated TTIP website, a specific public consultation on investment protection, which may be of interest to the committee, and the establishment of a special advisory group. During last week's round in the US, the lead negotiators from the EU and the US held a stakeholder meeting involving a wide range of interest groups from business to consumers, and trade unions to environmental and health NGOs, as well as representatives of US states. I understand that more than 75 stakeholder presentations were made during that meeting. The next such stakeholder meeting is planned for 3 June and will take place in Brussels. The TTIP website contains comprehensive information about the negotiations, including the EU's initial position papers published last year and the more recent EU sectoral proposals in the areas of chemicals, cosmetics, motor vehicles, pharmaceutical products and textiles and clothing. These proposals set out ideas for enhancing the compatibility of existing rules and regulations on both sides and for working more closely together on setting them in the future. In each sector the papers focus on ways to end the unnecessary duplication of product testing and plant inspections, to recognise each other's existing regulations, to bring them more closely together and to align the respective procedures for approving or registering new products.

The Commission has proposed a specific chapter in TTIP aimed at small and medium enterprises. I understand there was some discussion of this during last week's round. The Commission has produced a brochure which highlights the opportunities for SMEs from the agreement. The brochure, which can be found from the TTIP website, includes several small company success stories. I do not doubt that we could all add a few more examples of success stories of small businesses that are making inroads into the US market. The idea behind the specific focus on SMEs is to create many more opportunities. TTIP should create new opportunities for SMEs to do business not only in the area of goods, but also in services, including professional services. Improving the coherence of rules and rule making, including standards, would have a multiplier effect for SMEs and create opportunities by opening up even niche areas of procurement. Even in areas like customs procedures, SMEs can make large savings from small changes in regulations when considering exporting.

The advisory group set up by the Commission comprises representation from all stakeholders, including agriculture, business services, consumers, trade unions and NGOs. The group has thus far met on two occasions and the topics covered to date include regulatory coherence, sectors, investment protection, investor-state dispute settlement and sustainable development. The reports of these stakeholder meetings can also be found at the Commission's TTIP website.

The TTIP negotiations have been the subject of negative comments in some quarters. One of the main issues giving rise to disquiet is investment protection provisions, particularly in respect of investor-state dispute settlements, ISDS. In regard to the proposal that companies will have the right to seek redress from expropriation or discriminatory policies through international arbitration rather than the courts system, fears have been expressed that companies will use this mechanism to change the regulatory direction of public policy. Last January, Commissioner De Gucht announced his decision to consult the public on the investment provisions of a future deal on TTIP. That public consultation opened on 27 March and will run until 6 July. As part of the consultation, the Commission published a proposed EU text for the investment part of the talks, which includes sections on investment protection and the ISDS. All stakeholders will have the opportunity to respond to this consultation so that specific interests and concerns about investor protection and settlement of related disputes are well understood by the European Commission and can be used to better define the EU's approach to investor protection in the TTIP negotiations.

Assessments made by the Commission and other studies show that a comprehensive agreement could, over time, boost EU GDP by 0.5%. Given the current low level of economic growth in the EU and Ireland, this agreement will provide a significant injection of economic activity and, consequently, new job opportunities. Based on these assessments, if Ireland simply benefited in proportion to the size of our economy within the EU, a comprehensive trade and investment partnership could over time provide gains to Ireland in the order of €800 million per annum in increased GDP and 4,000 new jobs.

Ireland has a close trading and investment relationship with the US and, in addition, many Irish exporters are part of European supply chains, whereby exports to the UK, Germany and elsewhere in the EU feed into Europe's exports to the US. The TTIP is, therefore, a stimulus for longer term economic growth and jobs in Ireland. Members should have received invitations to a conference in Dublin Castle on 20 June on the topic of TTIP opportunities for Ireland.

The target audience of the conference is political and senior executive level across Departments, agencies, regulators and representative organisations. The line-up of speakers for the morning includes the EU chief negotiator with the US, Copenhagen Economics, a consultancy firm engaged by my Department to carry out a study of the economic impacts on Ireland of such a trade agreement and a panel of respondents from industry and regulators. I hope members will be able to attend.

The aim of the TTIP negotiations was that it should be concluded within 18 to 20 months from its beginning last July. This is an ambitious timetable. More recent public statements suggest it will be more likely towards the end of 2015. The aim is also that the TTIP will be a living agreement to provide the necessary space for dealing with more difficult issues and the mechanisms for jointly addressing any new trade and investment-rated issues that may arise.

We have circulated a note to members and I am happy to take any questions.