TTIP: contentious market regulation

Abstract

Based on the extensive literature in the area of historical institutionalism and regulation, this article embarks on the discussion about the concept of contentious market regulation and argues that the negotiations for a Transatlantic Trade and Investment Partnership (TTIP) are emblematic of a new generation of trade liberalization. Since the negotiations started, however, the TTIP has faced the main challenge has been how to bridge the gap between the initial consensus for boosting transatlantic economic growth through trade and the increasing contestation conveyed by several actors during the negotiation process. The article finds four main factors defining the interaction between the array of players involved in the TTIP negotiation process. First, the resilience of negotiators and regulators to efficiently advance the transatlantic agenda by adapting to new demands (investment court), finding alternatives to internal resistances (federal means of liberalizing public procurement), and continuing working on technical regulations for improving market competition in the transatlantic area (automotive sector). Second, the disagreements and polarizations within the legislative bodies as well as the public opinion and social movements on both side of the Atlantic, undermining the legitimacy of the negotiation process. Third, the increasing hesitation from decision-makers to continue the TTIP negotiations, potentially eroding the effectiveness of negotiators to reached an agreement. Fourth, the more interconnected trend among preferential trade talks.

Keywords:

• TTIP
• regulatory acquis
• investment protection
• transatlantic relations
• social mobilization
• regulatory capacity

Acknowledgements

My appreciation to Finn Laursen and Christina Roederer-Rynning for leading this project. I thank the feedback from Jacques Pelkmans and Alasdair R. Young during the seminar held at University of Southern Denmark in October 2016. Adam Birmingham, my research assistant, provided substantial help in the writing of this manuscript.

Notes

1. The structure of the TTIP is organized 24 chapters, grouped together in 3 parts: market access, regulatory cooperation, and rules.

2. Young and Peterson (2014) indicate that negotiations of international regulatory cooperation often take place mainly through three main forms: (a) approximation entails aligning national rules, it is the most demanding form of regularity cooperation; (b) establishment of equivalence seeks objectives and specific regulations that while different in form are equivalent in effect; and (c) mutual recognition agreements that accept differences in national standards and establishes that specific bodies in each party can certify that products produced on its territory conform to the standards of the other prior to export.

3. All major industry players in both markets endorse the TTIP. The sector has been organized around European Automobile Manufacturers Association (ACEA) and the European Association of Automotive Suppliers (CLEPA), in addition to the American Automotive Policy Council (AAPC) and the Alliance of Automobile Manufacturers (the Alliance) in the US.