April 4, 2015

Ambitious US bargaining over Buy America

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Spiegel Online quotes an internal document of the German Ministry of Economics on the TTIP negotiations (round 8):

Im Bereich der öffentlichen Beschaffung hat die US-Seite weitere Zugeständnisse mit der Aufnahme von Diskussionen zu Investitionsschutz / ISDS verknüpft.

(In the area of public procurement the US side made further concessions conditional on the start of deliberations on investor protection /ISDS).

The background is that the US negotiator side is very reluctant to revoke anti-free trade procurement policies like the Berry Amendments and Buy American, and has little support no support whatsoever from Congress for that. A removal of the enforcement layer ISDS is now used as a bargaining chip to stifle negotiation progress on public procurement. Given that ISDS is just an enforcement component it seems tricky to bargain over the substantive items such as public procurement. In fact the move applies to confirm the argument of the FFII analyst Ante Wessels that ISDS was not not mutually beneficial but rigged at the advantage of the United States.

US industry representatives are looking to turn TTIP into a deal that cements strong US corporate oversight in Brussels regulation rather than to go for specific regulatory items or harmonisation. The actual wild card is not the European public but Congress. But it is difficult to imagine a TTIP deal without Buy American concessions, no?