Transcript Triple E Consulting B.V. Energy, Environment & Economics

TTIP Impacts on European Energy
Markets and Manufacturing
Industries
Presentation for EP/ITRE Committee
21st January 2015
Koen Rademaekers
Stephan Slingerland
Triple E Consulting – January 2014
This Presentation
 EU – US Trade Relations
and TTIP
 Potential impacts on the
energy sector
 Potential impacts on the
manufacturing sector
 Conclusions and
recommendations
EU – US Trade Relations
EU – US Trade
Direction of
trade
(bln €)
Goods
(2013)
Services
(2012)
Investment
(2012)
EU to US
282
163
1,655
US to EU
196
149
1,536
+ 92
+ 14
+ €119
Trade balance
EU
Source: Eurostat
A positive trade balance for the EU
TTIP Negotiation Process




Ongoing since 2013
Seven rounds so far
23 topics
Negotiation areas
Market access
Services and investment
Regulatory issues
Sectoral annexes
Potential Impacts on the Energy
Sector
EU – US Energy Commodities Trade
EU-27 - US trade by SITC (2013) per ton (Source: Eurostat)
Commodity
EU Imports
Coal
103,285,142
Briquettes, Lignite and Peat
1,231
Coke and Semi coke
199,066
Petroleum oil and oils obtained from bituminous
17,905,931
minerals, other than crude (refined)
Petroleum oil and oils obtained from bituminous
4,843
minerals, crude (cf. ban on US crude oil exports)
Waste oils
16,145
Residual petroleum products
5,954,695
Liquified propane and butane
1,484,660
Natural Gas, whether or not liquefied
497,697
Petroleum gases and other gaseous hydrocarbons
4,917
It is clear where the trade is...
EU Exports
8
24,314
6,874
22,054,330
3,173,598
4
466,022
1,819
33
32,552
Tariff and Non-Tariff Barriers for
Energy
Source: WTO Tariff data
Fuel type
Non-tariff measure
Oil
Natural gas
Refined fuels
(gasoline, diesel)
Coal
Solar cells (tech)
(US) Export ban - License Required
(US) Export ban - License Required
(EU) Fuel quality directive (FQD)
0 > 0.2%
0 0
0 > 0.4
(EU/US) Climate policy
(EU/US) Local content
requirement
(EU/US) Local content
requirement
0 0
0 0
Wind energy
(tech)
EU tariff US tariff
(0%) (%)
2.7 1.25
Tariffs are low, but significant non-tariff barriers exist
Impact on Energy Trade
 Coal is already without
tariffs
 Export bans to be
affected by TTIP?
 Other barriers (climate
policies, FQD) not directly
affected
 LNG trade to increase,
but more interesting
markets in Asia
Limited TTIP impacts on energy trade expected
Impact on Energy Security
 ... If export bans are removed...
 ... If LNG trade to Europe will become attractive...
 ... If a crisis mechanism is agreed on (separately)...
Then TTIP could have a positive impact
on energy security in the EU
Impact on Renewables
 Through the removal of local content requirements (LCR)
.... trade in renewable energy technologies is likely to
increase
 We expect possibilities for
harmonisation without lowering
env. standards (for ex Ecodesign)
Potential Impacts on the
Manufacturing Sector
Tariff Measures
Trade weighted average tariff rates (%) (2007)
EU
US
Agriculture, forestry and fisheries
Other primary sectors
Processed foods
Chemicals
Electrical machinery
Motor vehicles
Other transport equipment
Other machinery
Metals and metal products
Wood and paper products
Other manufactures
%
0
2
4
6
8
10
12
14
16
Source: CEPR. 2013
Tariff barriers are generally low, with some exceptions
Non-Tariff Measures
Ad valorem equivalents of NTM in the U.S. and EU (%)
(2007)
Foods and beverages
Chemicals
Electrical machinery
Motor vehicles
Other transport equipment
Metals and metal products
Wood and paper products
Personal, cultural, other services
Constructions
Communications
Business and ICT
Insurance
Banking
Transportation
US
EU
0
10
20
30
40
50
60
70
80
Source: CEPR, 2013
Almost 80% of the benefits of the TTIP are expected to
come from the removal of NTMs
Overall impacts
 Depend on scenario
 All scenarios show (limited)
positive impacts on GDP
 TTIP might lead to positive
spill-overs in increased
trade with third countries
and adoption of standards
 Small changes in emissions
only
Impacts on specific sectors
Changes in EU output by 2027 (%)
Ambitious
Motor vehicles
Less ambitious
Other manufactures
Processed foods
Other machinery
Chemicals
Wood and paper products
Other transport equipment
Metals and metal
production
Electrical machinery
-8
-6
-4
-2
0
2
Source: CEPR 2013
EU Metals and Electrical machinery are likely to decrease
outputs
TTIP benefits will not be equal for all
Member States
Changes in Real Per Capita Income of Selected Countries (%)
Source: Felbermayr et
al. 2014
Core EU countries do not profit more than perifery
Labour market impacts
 Depend on specific provisions or on additional
agreements
 Competitiveness: Lower US labour and energy costs stand
against skills, energy efficiency, innovation
 Relatively low movement of workers across sectors due
to TTIP
Overall labour market impacts expected to be low
Impacts on Innovation
 In particular companies with high R&D costs can profit
from access to larger markets
 Intellectual Property Rights and in particular Geographical
Indicators could be at risk
 Contribution of TTIP to longer-term re-industrialisation
and greening of industry is unclear
There are likely to be some benefits for innovation, but
relation of TTIP to EU long-term policy goals is unclear
Policy Recommendations
Main Conclusions
Energy
 Security of supply, trade and energy prices might be
less affected than claimed
 Renewables might benefit from TTIP via removal of
Local Content Requirements
Manufacturing industry
 A small positive impact for most EU manufacturing
industries is expected, with large uncertainties
 Innovation might be stimulated
 Labour market effects likely to be limited
Recommendations
Monitor
 Monitor closely if benefits of TTIP outweigh drawbacks of
watering down on EU legislation (e.g. REACH, FQD)
 Follow-up on the implications of ISDS in relation to TTIP
Discuss
 Further discuss the relationship between TTIP and longerterm EU objectives regarding greening of industry
Analyse
 Re-estimate TTIP projections once draft texts have
become public
Thank you for your attention
Triple E Consulting – January 2013
ISDS Mechanism
 Investor-state dispute settlement (ISDS) mechanism
in the TTIP is currently under debate – however very
controversial
 ISDS was introduced in the Treaty of Lisbon and
currently used under the provisions of the Energy
Charter Treaty (ECT) (with 80% of the EU cases)
 If included in TTIP, environmental policies might be
disputed by international energy companies where
they have made investments