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European Court’s Transparency Ruling May Impact Trade Talks With U.S.

| Jul 17, 2014 | News

Trade between the European Union (EU) and the United States totaled roughly $1.06 trillion last year, while investments came to about $3.7 trillion. Seeking to expand trade still further, the two powers are currently negotiating a Transatlantic Trade and Investment Partnership (TTIP) that would reduce tariffs and other trade barriers. However, a recent ruling by the European Court of Justice (ECJ) on governmental transparency may add an extra obstacle to reaching a deal.

ECJEarlier this month, the ECJ ruled that internal EU documents related to international affairs and those containing legal advice are not automatically exempt from European regulations mandating public access. Instead, to claim an exception from transparency requirements for a requested document, European authorities must “explain how disclosure of the document could specifically and actually undermine the interest protected by the exception,” and that “the risk of the interest being undermined must be reasonably foreseeable and must not be purely hypothetical.”

The case first arose in 2009 when Sophia in’t Veld, a Dutch Member of the European Parliament (MEP), was denied access to a document by the European Council, a part of the EU’s executive arm that includes heads of government and heads of state from each EU member country. The document in’t Veld requested contained advice about the legal basis for concluding the Terrorist Finance Tracking Program (TFTP) agreement with the U.S. That agreement, also known as the “SWIFT Agreement,” allows the EU to send financial data about individuals to the U.S. to further counterterrorism efforts.

In’t Veld initially filed suit in the European General Court, arguing that the European Council’s decision to deny access should be annulled because it violated EU regulations mandating public access to documents. The General Court found partially in in’t Veld’s favor, holding that the European Council must disclose the document but may redact portions containing strategic points that could compromise the EU’s negotiating position.

The European Council appealed the decision to the ECJ, but the European high court has now rejected that appeal entirely. The European Council must now either release the document to in’t Veld, or it will need to provide specific reasoning to explain how public disclosure would compromise the EU’s negotiating position, albeit five years after in’t Veld first requested access to the document and four years after the SWIFT Agreement entered into force.

While the ECJ ruling appears to make a decisive move towards greater transparency, the exact magnitude of its impact remains unclear. Steven Peers, a University of Essex Professor of EU Law, called the decision “a fairly modest step forward.” Its ultimate effect will depend on whether the EU authorities will be able to claim successfully that disclosure will have “reasonably foreseeable” consequences.

Of course, In’t Veld has noted that her lengthy legal battle to gain access to a document demonstrates that “EU transparency rules’ legislation should urgently be revised.” She celebrated the ruling as “a great victory,” and suggested that “negotiators will be aware of this ruling and they may think twice before making documents confidential.”

The new ruling could be particularly significant in the ongoing TTIP negotiations, which have already garnered a great deal of attention for their secrecy as well as for any agreement’s possible scope. The proposed partnership could have a major economic impact, raising the U.S. economy perhaps as much as an estimated $95 billion and the EU economy by an estimated $120 billion. Additionally, outside trading partners of the U.S. and EU across the globe stand to gain possibly as much as an estimated $99 billion.

In order to achieve these substantial economic gains a potential trade agreement will target more than just tariffs and quotas; it will also seek to reduce regulatory differences between the U.S. and EU that are seen as limitations to trade. The possible regulatory ramifications have drawn opposition from various groups in Europe. For example, public health critics argue that TTIP could weaken or erase the EU’s current restrictions on Genetically Modified Organisms (GMOs) in food products, allowing an influx of GMO-laden foodstuffs from the U.S.

Some observers are concerned that the trade talks could compromise regulatory standards in ways that advance business interests to the detriment of the general public’s interests. The tone of secrecy that has marked the negotiations thus far has undoubtedly contributed to such concerns. Critics claim that corporate and industry interests are being heavily represented, while public interest advocates have not been given a meaningful seat at the table.

The TTIP negotiations are being conducted between U.S. trade negotiators and representatives from the European Commission. As with the European Council, the European Commission is an executive body of the EU, and it has long claimed certain exemptions from public disclosure requirements in international negotiations – exemptions from transparency that are not allowed, for example, during the European Parliament’s legislative proceedings. Until now, the use of such exemptions has kept nearly all TTIP negotiations documents sealed from the public eye.

Empowered by the ECJ’s ruling in in’t Veld’s suit, however, concerned parties such as public interest groups, journalists, and even Ministers of European Parliament may start to request access to documents related to the TTIP negotiations. More significantly, they may actually succeed now, given the higher burden that the EC must meet in in order to deny requests for disclosure.

Public discourse will no doubt become more informed should more information about the legal basis for some aspects of TTIP negotiations become available. But so will the political challenges associated with negotiating such a massive deal be intensified.

The sixth round of TTIP negotiations began in Brussels this week. Negotiators on both sides of the Atlantic Ocean aim to complete negotiations by the end of 2015. The newly expanded transparency requirements for negotiating documents could pose a political challenge for European negotiators seeking to conclude what is already expected to be a controversial deal.



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