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Committee of the Regions (CoR)

Impact of TTIP on regions and cities must be clarified and better taken into account within negotiations

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ttip_isds_creditworld_development_movement_flickr_httpbit.ly1pvv2lpA draft opinion on the Transatlantic Trade and Investment Partnership (TTIP) adopted on 17 December by the Committee of the Regions' Commission for Economic and Social Policy (ECOS), warns that the trade agreement's impact on local and regional authorities has not been sufficiently clarified, especially with regards to public procurement and public services.    

Regions and cities acknowledge the growth potential of the TTIP, especially for European small and medium-sized enterprises (SMEs) which are the engine of job creation in Europe. Nevertheless they are concerned by the EU-US partnership's implications at the local and regional level and demand to be involved in the negotiations. The draft opinion being led by Markus Töns (DE/PES), Member of the North Rhine-Westphalia Landtag, highlights a number of potential risks threatening the balance between the need to foster competition and innovation in the EU, and the commitment to ensure social inclusion, local self-government and public control on services of general interest.

Public procurement and public services are the most complex and challenging sectors which need far greater clarity. The current EU public procurement legal framework allows for special treatment for in-house companies, co-operation between local authorities, for the water sector as well as for emergency services. These exceptions need to be safeguarded from the scope of the partnership. The costs-benefit ratio in relation to public procurement could become unsustainable given that currently 85% of public tenders in the EU are open to US suppliers, while only 32% of US tenders are open to EU suppliers. This imbalance could be further exacerbated by the "opt-in" system for US states.

The draft opinion also stresses that even though services supplied in the exercise of governmental authority are currently excluded from the negotiations, clarification is needed to ensure that this exclusion covers services deemed in the case law of the parties to the agreement or of each member to be supplied in the exercise of governmental authority. With regards to the notion of "public services" as mentioned in the negotiating mandate, the draft opinion argues that the reference should cover all services subject to specific regulatory regimes or characterized by specific obligations imposed on the service providers at national, regional or local level in connection with the general interest, such as water and energy provision, waste and sewage disposal, emergency services, public health and social services, public transport, housing, urban planning measures and urban development. For all these services the draft calls on the Commission to apply a horizontal exemption from all obligations entailed by the principle of market access and national treatment.

The draft opinion also rejects to further open pre-school, school, higher, adult and continuing education services with mixed public-private financing, since the multilateral GATS agreement already contains numerous commitments to liberalisation.

Finally, the text argues that Member States and local and regional authorities must still be able to take any regulatory or financial measure necessary to promote the cultural diversity, freedom and pluralism of the media and to preserve or develop audio-visual and other similar services in order to meet the democratic, social and cultural needs of each society, irrespective of which technology or distribution platform is used.

The draft opinion is scheduled to be adopted by the Committee's plenary on 12-13 February 2015.

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