In February, 2013 US President Barack Obama and EU Commission President José Manuel Barroso announced that talks between the United States and the European Union would take place to negotiate an agreement on the Transatlantic Trade and Investment Partnership (TTIP) to create a Transatlantic Free Trade Area (TAFTA). In March 2013, the EU Commission sent to the Council of the EU a recommendation for a Council Decision authorising the opening of negotiations on a comprehensive trade and investment agreement, called the TTIP, between the EU and the USA.¹ On 14 June 2013, the Council (Foreign Affairs, Trade) unanimously approved a mandate to the Commission for the negotiation of such an agreement.² On the occasion of that same meeting, the representatives of the governments of the Member States meeting within the Council³ further mandated the European Commission to negotiate on behalf of the Member States in areas that have remained within the exclusive competence of the Member States in order to allow for a comprehensive trade and investment agreement.⁴ This demonstrates that the planned comprehensive agreement is designed to include matters for which the competences have not been conferred upon the European Union (neither as exclusive nor as shared competences) but remain with the Member States in accordance with the principle of conferral (Article 5 paras. 1 and 2, Article 4 para. 1 TEU). The inclusion of these matters entails a so-called mixed agreement between the US on one side and the EU and its Member States on the other side (see below). Additionally, the Council (Foreign Affairs, Trade) adopted directives for the negotiations on the comprehensive TTIP.⁵ These directives contain instructions concerning the nature and scope of the agreement, its preamble and general principles, objectives, market access (trade in goods, trade in services and establishment, investment protection, “including areas of mixed competence, such as portfolio investment, property and expropriation aspects”,⁶ public procurement), regulatory issues and non-tariff barriers, including sanitary and phytosanitary measures (SPS),⁷ rules on intellectual property rights, trade and sustainable development, customs and trade facilitation, existing sectoral trade agreements (e.g. on trade in wine), trade and competition, trade-related energy and raw materials, trade-related aspects of small and medium-sized enterprises, capital movement and payments, transparency, the inclusion of other areas of law, if mutually desired, institutional framework and final provisions.

The information contained in that document has been classified RESTREINT UE/EU RESTRICTED which means that its “unauthorised disclosure could be disadvantageous to the interests of the European Union or of one or more of its Member States”.⁸ Therefore, all addressees were “requested to handle this document with the particular care required by the Council’s Security Rules for documents classified RESTREINT UE/EU RESTRICTED”. Although there can be legitimate reasons to keep the specific content of an agreement or the negotiating directives secret,⁹ the Council has to provide “a clear and coherent statement of reasons concerning its refusal to disclose those parts of a requested document”.¹⁰ The EU Commission was blamed for negotiating in secret without informing the public and also without providing sufficient information to the European Parliament and national parliaments. The Commission, however, refers to the negotiating mandate, agreed unanimously by all EU Member States. It points out that TTIP is no exception in the area of trade policy. Much rather, it is supposed to be a matter of course that the EU is represented at the negotiating table by the European Commission which works according to guidelines agreed by the EU Member States.¹¹ They specify the EU’s red lines and what the Commission can and cannot discuss.¹² The Commission emphasises that the Council, which consists of representatives of the Member States’ governments, and the European Parliament are also regularly involved in the negotiating process. It further claims that there have been more than 45 meetings with the Member States, also at ministerial level, more than 65 important TTIP documents have been sent to the European Parliament and over 80 parliamentary questions have been answered.¹³ The Commission published reports on each of the six rounds of negotiation talks conducted by the Commission and the US Trade Representative (USTR) since July 2013 which were also presented to the national parliaments, e.g. the German Bundestag.¹⁴ The Commission launched a public consultation.¹⁵ EU Trade Commissioner Karel de Gucht published a press statement following the stocktaking meeting with USTR Michael Froman on the TTIP and emphasised that the European Parliament, whose consent is necessary,¹⁶ would “not in the end approve a trade deal that undermines our European values or the social standards we have built over so many years” and he would not approve such a deal either.¹⁷ Moreover, the Commission published the state of play of TTIP negotiations ahead of the sixth round of talks.¹⁸ This is why the Commission takes the position that the TTIP negotiations are the most transparent trade negotiations ever. But neither the directives nor the EU basis for the negotiating text were officially published.¹⁹ However, a copy of the directives of 14 June 2013 was leaked. So was—in March 2014—a copy of the EU negotiating text of 3 July 2013 on trade in services, investment, and e-commerce²⁰ and—in May 2014—a copy of the initial EU position on raw materials and energy. Therefore, the discussion can now be based on texts and not only on speculations or even assertions which in some cases have no factual background.²¹

Not only NGOs but also academics like Martti Koskenniemi²² or Noam Chomsky²³ and national parliaments of the Member States have criticised the lack of transparency and the secrecy of the negotiations. EU Trade Commissioner Karel de Gucht responded by emphasising that the Commission had regularly consulted a broad range of civil society organisations in writing and in person, including one meeting with 350 participants from trade unions, NGOs and business.²⁴ The question is, however, whether these consultations had a real influence on the point of view of the EU Commission and hence on the negotiations.

The alleged boosting effect of TTIP on the economy is highly disputed—and probably not really predictable. As to the content of TTIP, the main critics from NGOs, trade unions and consumer groups refer to the fear of lower standards concerning products, especially foodstuffs,²⁵ but also social and environmental standards, workers’ protection and consumer rights. This effect is not necessarily the result of harmonisation but may be one of the consequences of mutual recognition. Critics say that the lowering of standards would mostly benefit large businesses. But there are also examples of small and medium-sized enterprises (SMEs) profiting enormously.²⁶ A very critical point is the planned investor protection through the inclusion of an investor-to-state dispute settlement (ISDS). Critics fear that especially environmental standards could be affected if not the courts of the State where the investment takes place but arbitral tribunals such as those administered by the International Centre for Settlement of Investment Disputes (ICSID) will be competent to decide.²⁷ Furthermore, the exclusion of national courts is deemed to run counter to the principles of national sovereignty and democracy.²⁸ The argument of the EU Commission,²⁹ that US companies already have the right to take an EU government to court under existing ISDS-rules like the Energy Charter,³⁰ is ambiguous: On the one hand the problems of the Vattenfall case³¹ support the arguments of the critics; on the other hand TTIP provides a chance to learn from past shortcomings and introduce improved rules of arbitration, especially setting out a clear-cut scope of application.³²

In its resolution of 14 May 2013,³³ the European Parliament welcomed the negotiations on TTIP in principle,³⁴ but mentioned some sensitive issues where the position of the EU ought to be steady as a rock. Thus, it considered it “essential for the EU and its Member States to maintain the possibility of preserving and developing their cultural and audiovisual policies, and to do so in the context of their existing laws, standards and agreements” and called, therefore, “for the exclusion of cultural and audiovisual services, including those provided online, to be clearly stated in the negotiating mandate”.³⁵ The agreement should include strong protection of precisely and clearly defined areas of intellectual property rights (IPRs), including geographical indications³⁶ and should guarantee full respect for EU fundamental rights standards, especially a high level of protection of personal data.³⁷ The European Parliament emphasised the sensitivity of certain fields of negotiation, such as the agricultural sector, where perceptions of Genetically Modified Organisms (GMOs), cloning and consumer health tend to diverge between the US and the EU. Nevertheless, it saw “an opportunity in enhanced cooperation in agriculture trade, and stresses the importance of an ambitious and balanced outcome in this field. But the agreement must not undermine the fundamental values of either side, for example the precautionary principle in the EU.”³⁸ It stressed that financial services must be included.³⁹ The Parliament “reminds the Commission of its obligation to keep Parliament immediately and fully informed at all stages of the negotiations (before and after the negotiating rounds)”.⁴⁰ This obligation is enshrined in Article 218 para. 10 TFEU. But Parliament furthermore “recalls the need for proactive outreach and continuous and transparent engagement by the Commission with a wide range of stakeholders, including business, environmental, agricultural, consumer, labour and other representatives, throughout the negotiation process, in order to ensure fact-based discussions, build trust in the negotiations, obtain proportionate input from various sides, and foster public support by taking stakeholders’ concerns into consideration”. It “encourages all stakeholders to actively participate and to put forward initiatives and information relevant to the negotiations”. Members of the national parliaments like the Members of the German Bundestag can be very important “other representatives”, at least if their formal consent is necessary for the entry into force of TTIP. The European Parliament is aware of this aspect, having in mind its own role. It “recalls that Parliament will be asked to give its consent to the future TTIP agreement, as stipulated by the Treaty on the Functioning of the European Union, and that its positions should therefore be duly taken into account at all stages”.⁴¹

TTIP is also debated critically and with diverging points of view in national parliaments.⁴² In the German Bundestag the parliamentary groups of the opposition parties BÜNDNIS 90/DIE GRÜNEN (ALLIANCE 90/GREEN PARTY) and DIE LINKE (THE LEFT) and some of their MPs submitted parliamentary questions⁴³ and initiated very intensive inquiry proceedings⁴⁴ dealing with a lot of sensitive issues and critical points of TTIP and the respective positions of the Federal Government which is formed by a coalition of the Christian Democrats (CDU), the Christian Social Union (CSU) and the Social Democrats (SPD).⁴⁵ There were even demands to stop⁴⁶ or to suspend⁴⁷ the negotiations. TTIP was debated in special forums of the Parliament.⁴⁸ Some “no goes” were formulated or at least discussed.⁴⁹ The Bundesrat (chamber of the German Länder), too, debated TTIP.⁵⁰ Both legislative organs of Germany think that TTIP should be concluded as a mixed agreement which needs to be ratified by the Federal Republic of Germany with their consent.⁵¹ The academic advice service of the Bundestag published an expert opinion endorsing this stance.⁵² The same view was taken by both Houses of Parliament in the UK,⁵³ by the governments of France⁵⁴ and Austria⁵⁵ and by the chairs of the relevant committees in the national parliaments of the Netherlands, Austria (both Nationalrat and Bundesrat), Belgium, the Czech Republic (both Chamber of Deputies and Senate), France, Germany, Hungary, Ireland, Latvia, Luxembourg, Malta, Poland (both Sejm and Senate), Portugal, Slovakia and Slovenia.⁵⁶ However, the opinion of the EU Commission seems to differ.⁵⁷ Former EU Trade Commissioner Karel de Gucht wanted to submit the issue to the Court of Justice of the European Union if the EU’s exclusive competence continues to be contested.⁵⁸ On 30 October 2014, De Gucht’s second to last day in office, the Commission eventually requested a Court of Justice Opinion on the competence to sign and ratify the Free Trade Agreement with Singapore.⁵⁹ Therefore the question whether TTIP needs the consent of the national parliaments of the EU Member States and in Germany the consent of the Bundestag—or even the consent of the Bundesrat, too—has become relevant in practice.

The starting point for the need of control by national parliaments over EU agreements and the extent of the influence of the parliaments depends upon the question whether the European Union has exclusive competence to conclude the treaty or not. The competence to conclude the treaty depends upon the content of the agreement. National parliaments have the biggest influence if a mixed agreement is necessary to conclude the treaty with the intended content as this would require the approval of national parliaments. Therefore, the EU Commission is eager to avoid a mixed agreement. But this leads to the problem that some topics must be excluded. Some legal aspects may be doubtful and this is the reason why EU trade commissioner Karel de Gucht wanted to ask the European Court of Justice to issue an advisory opinion in accordance with Article 218 para. 11 TFEU. If the Union has exclusive competence the influence of national parliaments is restricted to the control of the German representatives in the European institutions. Real representatives of the Member State Germany are the Federal Chancellor as Head of Government (Article 65 Basic Law) in the European Council (Article 15 para. 2 TEU) and the Federal Minister acting in the Council (Art. 16 para. 2 TFEU: “representative of each Member State at ministerial level”). This control is based on national law (see below), but ever since the entry into force of the Treaty of Lisbon, it is expressly not only accepted but “welcomed” by EU law.⁶⁰ The German members of the European Parliament, however, are independent. The influence of the national parliament, the Bundestag, is limited to informal consultations. The “German” member of the EU Commission is part of an institution which shall be “completely independent”. For this reason the members of the Commission “shall neither seek nor take instructions from any Government or other institution, body, office or entity” (Article 17 para. 3 subpara. 3 TEU), including the national parliament. This is why even informal consultations have to be restricted to the competent Commissioner.⁶¹

The extent of the influence on the national representatives in the Council depends on the question whether the decision on TTIP can be based on a qualified majority or whether the Council shall act unanimously. In the latter case the national parliament can instruct the representative in the EU institution to veto upon TTIP. Whether this instruction is legally binding is a question of national law; but the national regulation has to be in accordance with European Union law (see below).

If TTIP is a mixed agreement and needs to be ratified in Germany, the treaty requires the consent or participation in the form of a federal law, of the bodies responsible in such a case for the enactment of federal law.¹²⁹ Not only the Bundestag but also the Bundesrat ¹³⁰ is “responsible” for the enactment of federal law. The Bundestag shall submit the law to the Bundesrat which can at least object to a bill adopted by the Bundestag. But this objection may be overruled by the Bundestag.¹³¹ If the content of TTIP touches matters which would require the consent of the Bundesrat were it a national law, the act of consent to the treaty requires the consent (and not only the “participation”) of the Bundesrat, too. The areas of legislation in which the consent of the Bundesrat is required for a bill to become law must be named as such in the Basic Law. One such area is state liability,¹³² which the TTIP would affect if a comprehensive dispute settlement regime is included in the treaty.

Not only the Bundestag, but also the Bundesrat must be informed by the Federal Government in matters concerning the European Union.¹³³ In a different form and to a different extent, in comparison to the Bundestag,¹³⁴ it shall participate in the decision-making process of the Federation, especially the representation of Germany in the Council as legislative organ of the EU,¹³⁵ insofar as it would have been competent to do so in a comparable domestic matter, or insofar as the subject falls within the domestic competence of the Länder.¹³⁶ The German Länder participate in matters concerning the European Union through the Bundesrat.¹³⁷ The rules for this participation of the Bundesrat and the Länder are comprised in Article 23 paras. 4 to 6 and, in greater detail, in the Act on Cooperation between the Federation and the Länder in Matters Concerning the European Union.¹³⁸ Relevant areas touched by TTIP may be certain professional rules in the context of liberalisation of the service sector which fall under the competence of the Länder ¹³⁹ and rules concerning the cultural sector.¹⁴⁰