Europeans press for access to U.S. cabotage markets

By Michael Hansen, President, Hawaii Shippers’ Council

The European Parliament issued a press release on May 28, 2015, announcing their draft negotiating recommendations in respect of the Transatlantic Trade and Investment Partnership (TTIP) (the acronym is pronounced “T-tip”) bilateral free trade agreement (FTA) between the United States (US) and the 28-member country European Union (EU).

The draft negotiating recommendations were reported out of the European Parliament’s International Trade Committee and will go to the full Parliament for a vote by the Members of the European Parliament (MEP) in June 2015.  If adopted by the full Parliament (which seems likely), the negotiating recommendations will go to the European Commission, which actually conducts trade negotiations on behalf of the EU. The TTIP negotiations began in early 2013 and are not expected to be concluded before the end of 2016.

The U.S. online news publication Politico reported on May 28th that the European ”Parliament’s International Trade Committee is poised to adopt a non-binding set of recommendations to the European Commission in its negotiations on TTIP.  And, reported further, “The panel’s recommendations will be submitted to a vote in the next plenary session in Strasbourg in June.”

A key important element of the European Parliament’s TTIP negotiating recommendations involve access for EU companies into the US cabotage industries including maritime, as represented by the Jones Act, and aviation.

In respect of maritime cabotage, European maritime industry trade groups are seeking several specific exemptions from U.S. maritime cabotage provisions.  These include exemptions from: 

(i) the U.S.-build cabotage requirement allowing EU-built ships to be sold into U.S. ownership for employment under the U.S. flag in U.S. domestic trades; 

(ii) the U.S. flag cabotage requirement allowing EU-Flag containerships to perform what is known as ”international relay” when calling at series of U.S. ports on a single voyage; and, 

(iii) the U.S. dredging cabotage statute to allow EU-built and EU-owned dredges to operate under U.S. flag in U.S. waters.

Key excerpts from the European Parliament’s press release:

An EU-US trade deal should deepen EU access to the US market, but must not undermine EU standards or the right to regulate in the public interest, say Trade Committee MEPs in draft recommendations voted on Thursday. Tools for resolving disputes between investors and states should be reformed and improved, they add.

The recommendations to the Commission negotiators on the Transatlantic Trade and Investment Partnership (TTIP), approved in committee by 28 votes to 13 with no abstentions, still need to be endorsed by Parliament as a whole.

Open up US transport markets and public procurement

The TTIP talks should remove current US restrictions on foreign ownership of maritime and air transport services and airlines, such as the “Jones Act” or the “Air Cabotage law”, which “seriously hinder market access for EU companies” MEPs also call for more EU access to US telecommunications markets”.

The wide disparity in the openness of the two parties’ public procurement markets must be remedied, say MEPs. TTIP should achieve a “significant opening” of the US public procurement market at all levels of government, so that EU firms, and particularly small and medium-sized ones, can bid for US public contracts in the fields of construction services, civil engineering, transport and energy, they add.

LINK: EU News Release

2013: World Economic Forum: Reform Jones Act to Grow Economy