U.S. and EU Trade and Investment Partnership Negotiations Present Opportunities for TMT Sector

By Frank J. Schweitzer, Barton J. Gordon, and William A. Kirk

The United States and the European Union are set to launch negotiations this summer on a comprehensive agreement covering cross-Atlantic trade and investment known as the Transatlantic Trade and Investment Partnership (TTIP). In March, the Administration notified Congress that the President would initiate the TTIP negotiations, which will encompass a broad range of issues covering rules and disciplines related to cross-border trade in services, investment, telecommunications, electronic commerce, information and communication technology services, regulatory coherence, competition, technical barriers to trade, transparency, and intellectual property, among many others.

Both sides want to achieve a very high standard bilateral agreement that will also help to establish more broadly rules and principles to strengthen the multilateral trading system. The decision to launch the TTIP negotiations follows completion of a February 2013 Final Report by the U.S.-EU High Level Working Group on Jobs and Growth, which examined options for increasing U.S.-EU trade and investment.

Companies competing globally in the telecom, media, and technology sectors face a host of issues as they conduct business cross-borders, seek to enter new markets, or manage their operations in existing markets abroad. The issues are varied.

For example, telecom companies have to grapple with issues related to the following, among others: cross-border data flows; Internet-enabled trade in services; privacy considerations; the independence and effectiveness of foreign regulators; limits on the types of legal entities that may be established, owned, or controlled; competition issues (including those related to state-owned enterprises); international termination rate issues; satellite services; submarine cable systems; as well as a broad range of issues affecting trade in telecommunications equipment.

Likewise, media companies and others operating in the audio-visual sector must contend with issues such as piracy, enforcement of intellectual property rights, screen quotas, cultural exceptions, or other trade barriers that protect domestic movie producers and the local music industry.

More broadly, technology companies of all types and across all economic sectors face market barriers, increased costs, or logistical inefficiencies from government measures, including those in the form of technical regulations, licensing requirements, or standards. Reduced market access, burdensome costs, and needless inefficiencies come not only from regulatory protectionism, but also from well-intended regulatory measures that may be unnecessary, redundant, or inefficiently applied.

The TTIP negotiations present an opportunity for the United States and the European Union to reconcile their differences with respect to regulatory approaches, conformity assessment procedures, and standards-related development processes, including those related to interoperability. Achieving convergence in these areas would benefit telecommunications, media, and technology companies in terms of facilitating the services and products they provide on both sides of the Atlantic. The United States and the European Union will also look to foreign investment liberalization and investment protection provisions that are based on the highest standards that each side has negotiated.

The TTIP negotiations provide companies on both sides of the Atlantic with a unique opportunity to assess their current cross-border operations and market presence in the United States and the European Union. Among other things, the negotiations provide companies with an opportunity to determine where their interests would be enhanced by increased regulatory cooperation, the harmonization of standards, or the elimination of measures that distort competition, impede trade, or frustrate foreign investments.