It seems unlikely that the Trans Pacific Partnership will be approved by the US Congress. What hope then for the TransAtlantic Trade and Investment Partnership (TTIP)? That is only one of the many issues facing this historic deal, as Vanessa MacDonald found out after speaking to politicians, officials, business leaders, civic society representatives and academics on both sides of the Atlantic.

Political support – US

The chief negotiators – Ignacio Garcia Bercero for the EU and Dan Mullaney for the US – insist that things are on track to sign the TransAtlantic Trade and Investment Partnership. But reaching agreement on all the pending issues is only the first hurdle: the timing is also crucial.

The deadline is – believe it or not – this December. Even assuming that President Barack Obama manages to sign it before the end of his term, it still needs to go to Congress – and that depends a great deal on who is elected in November.

The deal needs just a simple majority to pass, requiring the approval of both the House’s Ways and Means Committee and the Senate’s Finance Committee. Hearings last 30 working days and they would either need to approve or reject: they will not be able to amend it.

Working backwards, this means that for Mr Obama to submit it to Congress in time for him to sign, it would need to be concluded by mid to end November – by when the new President will have been chosen. The climate is hardly conducive to trade deals.

“There has been a sea change in the trade arena. There has not been a majority on free trade in Congress for over 20 years,” Steve Billet, a professor at George Washington University, said.

“If the 1993 North American Free Trade Agreement or [China’s accession to] the World Trade Organisation had to be put to the vote now, I think they would not pass,” he said with a shake of his head.

The Republicans used to be much more in favour of trade deals in the past but they have now moved to a much more protectionist position under Donald Trump, and the Democratic contender Hillary Clinton has distanced herself from TTIP – although if Mr Obama managed to get it through, she is unlikely to dump it completely and would probably try to make her mark by shooting for a better deal, he believes. Mr Trump, on the other hand, would object vociferously to any attempt to get the deal through between the election and his inauguration.

It does not help that the recently-concluded TransPacific Partnership, which involves the US and 11 other Pacific rim countries, is also on the cards as the two trade agreements are being judged by the same yardstick – even though they are completely different in scope and impact.

Political support – EU

The window of opportunity for this deal to be approved does not only affect the US side of the deal but also the EU one, where similar quandaries exist, with French and German elections looming.

Having said that, all the member states agreed to let the Council continue to negotiate.

At some stage, negotiations on the last, tough issues will hit a wall and the two sides will need to take a decision, even though that will mean compromises, winners and losers. This is one of the reasons that European Commissioner for Trade Cecilia Malmström and US Trade Representative Michael Froman are meeting every two weeks, apart from regular updates.

She recently stated: “The EU has an ambitious trade agenda and remains engaged in pursuing and concluding the different negotiations in which it is involved. (…) On TTIP, therefore, the EU is prepared to make the political choices needed to close this deal with the current US administration, provided that the substance is right.”

You have to look at the whole package

Just as the US would need to get Congressional approval, the EU would need the approval of the European Parliament, and it would then need to be ratified by all the member states, since it will probably be presented as a ‘mixed agreement’, just as the Canadian one was. MEPs are kept informed about progress through the Trade Policy Committee which meets every Friday – although German MEP Bernd Lange admitted that some member states were more engaged than others.

The European Parliament, in the meantime, will only get to vote on the final package – just as Congress will – but it has been able to pass a few proactive resolutions which send a clear message to the negotiators on issues which could be deal-breakers – preventing last-minute panic. The EP’s trade committee managed to ensure that MEPs had access to the ‘secret room’ in which documentation is kept, and briefings after each round of talks.

The easiest thing would be for the two sides to pat themselves on the back about the 97 per cent of the deal which has been agreed, and to stop there, before the heavy stuff has to be tackled. But this so-called ‘TTIP Lite’ is simply not on the cards.

Everyone from Dutch MEP Marietje Schaake to the chief negotiators said the same thing: they are not willing to sacrifice an “ambitious, comprehensive and balanced” agreement merely to try to meet the deadline.

“It will work, as long as the parties are willing to be pragmatic and trade off clauses. There will be good parts and bad parts but you have to look at the whole package. That is the sensible thing to do,” Joel Trachtman, a professor of international law, said.

Geographical Indication

TTIP could well go down in history as the Parmesan Wars, even though many of the battles involved were already played out at the World Trade Organisation. There are thousands of products protected by Geographical Indications (GI) in the EU: member states fought fiercely for products like Parmigiano Reggiano, Scotch whisky and Parma ham to be recognised. The dust has hardly settled within Europe, so expecting EU producers to allow the US to start exporting generic parmesan and champagne – well, it is enough to make your whey curdle. Country of origin labelling or GIs are the third largest stumbling block for TTIP, according to an Atlantic Council survey.

The facts do not explain the concerns of the EU’s stakeholders over this $5.2 billion sector. The US Dairy Council complained at a stakeholders’ meeting – a regular slot during the trade talk rounds – that the EU exported 10 times as many agricultural products to the US as vice versa.

Why can’t you have California champagne? After all, the EU exports six times as much wine to the US as vice-versa, and 324 times as much champagne, oh, sorry, sparking wine.

The American Wine Institute speaker at the meeting was livid: the Americans have been producing burgundy and champagne for 200 years, long before the EU side decided to “protect” its appellation.

The EU producers want to protect the price premium that the GI affords; the suggestion of getting “a $250 trademark” was seen as insulting by the industry representatives, who add that the cost of defending the trademark would be outrageous. Additionally, a trademark would only belong to one company, whereas there are often several producers making a GI food.

The Americans argue that it would cost millions to rebrand their products – which they refer to as ‘semi-generics’ – and that these would hardly make a dent in EU exports.

The EU side is also baffled at the opposition in the US, having just concluded a trade deal with Canada (CETA) which protects 140 GI products there.

What was equally as baffling was the “heels dug in” stand taken by the stakeholders in Brussels a few weeks ago: this was, after all, the 14th round of talks. The lines drawn in the sand were what you would have expected in the first round and it is amazing that so little has been achieved in three whole years.

Food safety

EU chief negotiator Ignacio Garcia Bercero cannot say it often enough: nothing the negotiators do will lower the standards of protection for EU consumers. There is clearly, however, considerable doubt, judging by the protesters who gather in Brussels during every round of talks.

The European Consumer Organisation (BEUC) summarised the differences: the EU applies the precautionary principle to proactively regulate risks while the US uses the ‘reasonable certainty of no harm’, waiting for evidence of arm before regulating.

The EU has refused for decades to import hormone-fed beef from the US, and continues to do so in spite of the fact that this contravenes WTO rules. It lost the case and had to face retaliatory measures from the US, but still persists. It has faced similar cases on genetically modified organisms (GMOs at present only 55 are authorised in the EU.

This is yet another issue that seems to defy resolution. The US wants the EU to base its decisions on science – as the WTO does – and not emotion, fear and pressure from civil society.

The US cannot see what the fuss is about: “We are not going to force people to eat anything that they don’t want to eat,” a source familiar with the negotiations said.

It does not help that there has been considerable resistance from US producers to label GMO foods as such – even though consumer pressure is building up there too and a number of brands are boasting that they are “GMO free”. At present, only one state has mandatory GMO labelling.

Monique Goyens, the director general of the European Consumer Organisation, was cynical.

“There will be corporate pressure which will lead to ‘watering down’ of the statements made now. It is all very well and good to make promises but, in practice, businesses have more resources than civic society and simply wear down resistance, what we call ‘paralysis by analysis’.

“They say that we should base decisions on science – but who pays for that science? It is very often industry itself. At the very least, we should have publicly-funded science!” she said.

Standards are at the heart of the non-tariff barriers and the two parties use very different ways of establishing them. The US standards are set by around 400 public-private partnerships with most of the standards set by the 20 main ones ­– which makes them much more user-driven than in the EU, incorporating professional societies, trade societies, testing and certification organisations – as well as ones dedicated solely to setting standards.

Investment protection

Perhaps it would be better to start on a positive note: there are a number of things that the EU and the US agree on when it comes to investment dispute resolution. Both want a transparent system and the dismissal of frivolous claims.

Alas, that is as far as it goes. The original dispute mechanism was heavily criticised by civil society which saw it as a way for Big Business to bully governments into relaxing environmental laws, among other things. A survey by the Atlantic Council found that 57 per cent see this as the greatest obstacle to a successful completion of TTIP.

Officials have tried to point out that there are already dispute provisions in 3,200 trade and investment agreements among 180 countries. The US has 50 current agreements which have ISDS provisions – and never lost one. The EU has 1,400 bilateral agreements with countries around the world, designed to protect private investments.

I believe that we have gone past the point of no return

Transatlantic cases account for only 20 per cent of the 653 global cases to date, of which 23 per cent were won by the state, and only eight per cent by the investor (the rest being dropped or agreed ‘out of court’).

The EU realised it was going to get nowhere and came back recently with a completely different concept: an investment court, which the US has not yet taken an official position on. However, AmCham EU has said clearly that according to the feedback it had received, the court proposal would not make it through Congress, effectively blocking the whole deal.

Stakeholders on the US side argue that arbiters appointed by each side would be more independent than judges which depend on the State to be reappointed. They could also be chosen for their more specialised knowledge. The EU side argues that arbiters are often corporate lawyers who could appear for the defendant company in the next dispute, also creating a conflict of interest.

“How could you have a neutral jurist if they are paid by one of the parties?” a government trade official said. However, the EU proposals seemed to have considerable support on its side of the pond. Dutch MEP Schaake was bowled over by it, saying it was so good that it should be used in other outdated trade deals, as it was more transparent, had an appeal system and a bigger role for civic society.

AmCham EU is less impressed: “[We] are concerned that the European Commission’s proposal appears to weaken rather than strengthen investment protection”, warning that: “Without investment provisions, we do not believe TTIP can fulfil the EU objective to act as a blueprint for 21st century trade agreements”.

Shaun Donnelly, from the US Council for International Business, was the US Trade Representative before Dan Mullaney and would have been leading the negotiations had he not stepped down. He believes that investment eclipses trade by far – one academic believes investments could increase seven-fold with TTIP – noting that while the EU has only started facing these disputes recently, the US has been struggling with them for decades.

“The current resolution mechanisms were already revised twice in 2004 and 2012 to increase transparency. The business community – we represent some 300 leading multinationals – is comfortable with the present mechanism and they feel that it creates enough space in which the government can regulate,” he said. “If is not clear how the EU intends to select the judges for the court it is proposing, and why anyone would want an appellate court which would cause delays and add costs.”

Joel Trachtman, a professor of international law at the Fletcher School of Law and Democracy, stressed that it makes sense for governments to ensure that foreigners are treated fairly – but that this would not necessarily give corporates the upper hand.

“NGOs have long been concerned by the ability of governments to regulate. For example, Togo could not fight Philip Morris when challenged about plain packaging on cigarettes as it would have been so expensive to do so, in the absence of a mechanism ,” he reminded journalists during the briefing.

Public procurement

The EU only recently added public procurement to the list of chapters. There is already a WTO agreement that covers public procurement but not all the states in the US are subject to it; in stark contrast, all the EU member states have implemented the WTO agreement.

The matter is of great concern to the EU side: the 1933 Buy American Act requires the US government to treat US firms preferentially when it buys equipment or awards a contract, discriminating against European companies.

Mr Donnelly, of the US Council for International Business, believes that EU companies are eyeing procurement at state rather than federal level but agreed that there was considerable protectionism to overcome.

Consequences of failure

“TTIP is a valid response to concerns about globalisation that are expressed so often by people who criticise TTIP,” Mr Garcia Bercero said.

“If we want to have a shot at shaping globalisation, we need a like-minded partner that largely shares our views, that shares our respect for democracy and the rule of law. TTIP is therefore not only an economic opportunity but also it is a means to harness globalisation in accordance with our values.”

Mr Mullaney was also determined to plough on: “Completing these negotiations will require considerable political will and a pragmatic approach on both sides to get this done. As President Obama has emphasised, the US is prepared to make every effort to complete negotiations this year… We know this is a challenging year for Europe, in the midst of several challenging years.

“Brexit affects anew the calculations of everyone but we are convinced that the strategic and economic rationale for TTIP remains strong. TTIP can help strengthen a transatlantic relationship that has weathered many previous challenges and has been the foundation of our common prosperity and security for more than 70 years.

“Just as we both have much to gain though a successful TTIP, we have much to lose through failure. We should not let this unique window of opportunity to complete TTIP this year slip away.”

Dutch MEP Schaake agreed: “The consequences would be to go back to bilateral agreements, which would mean a race to the bottom as countries vie for competitive advantages and cut standards. If we stop negotiating, our position will weaken. Together, we stand stronger. Our rivals are happy to exploit the sections where there is opposition. The problem is that people know what they don’t want – but they don’t always understand the consequences of getting what they want!”

Nicholas Hodac, an IBM executive actin in AmCham EU, was more pragmatic: “At least the negotiations have forced people into the same room to talk. A lot has been achieved in the past three years and companies are now also thinking about how trade agreements help. Even if TTIP fails, we need to keep up the momentum. I believe that we have gone past the point of no return.”

Prof. Trachtman believes TTIP would deter the ‘race to the bottom “Imagine if there were an EU/US standard. Other countries would have to raise the level of their game so TTIP would effectively be creating a world standard. This is why it is so important for TTIP to happen before China starts to set standards for the rest of the world through its sheer size.”

This story was amended at 11.45am on 16 August

And US Council for International Business’s Donnelly was just as forceful in his warnings: “If we don’t do this, other countries might, and they might be ones which do not have the same values, standards and labour conditions. Don’t forget that these are not things which can be done through the World Trade Organisation as other countries would block us.

“If we miss this window of opportunity, then it is not clear when the next one would be.”