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| "TTIP not as good as being advertised" |
U.S. President Barack Obama has only nine
months left in office. He now seems a man in a hurry. During his visit
to Europe on April 21–25, he made a big pitch for the proposed
Transatlantic Trade and Investment Partnership (TTIP), which would radically change the functioning of trade between European and U.S. companies.
Speaking in the German city of Hannover, where he opened one of the
world’s biggest trade fairs, he told German Chancellor Angela Merkel and
scores of leading company executives how time was slipping by to clinch
this
trade deal.
“If we don’t complete negotiations this year, then upcoming political
transitions in the United States and Europe would mean this agreement
won’t be finished for quite some time,” he said.
Obama’s pitch is long overdue.
TTIP
is not only about establishing a trade deal that would set crucial
standards for how business is conducted. It is also about underpinning
if not reviving the West’s liberal economic order, which is coming under
massive pressure from Russia and particularly China.
After annexing Crimea in 2014 and later invading parts of eastern
Ukraine, Russia is now meddling in Europe through a sophisticated
propaganda campaign that does everything to publicize populist and
Euroskeptic movements and anti-U.S. sentiments.
Russia is doing everything possible to rattle NATO weeks before the
alliance holds a summit in Warsaw, where it will discuss how to improve
the security of its Eastern members in the face of increasing Russian
intimidation.
Europe’s divisions over refugees and TTIP also play into the hands of
Russian President Vladimir Putin. A weakened Europe and a weakened
transatlantic relationship are to Russia’s benefit. And to China’s.
Second only to the United States in terms of economic power, China is
making a big bid to set new trading standards through its sheer size
and political ambitions. Beijing’s huge investments in Africa and Latin
America are about seeking allies to assert its authority and influence
on the global stage.
That is why TTIP matters. If the deal does not go ahead, the West
will have lost a major chance to regain its influence and set trading
standards for the coming decades. Above all, Europe and the United
States will have lost the opportunity to build a new
transatlantic relationship,
as the old one, built from the carnage of World War II, increasingly
lacks the strategic importance and direction that it once had.
Despite the political and strategic significance of TTIP, European
leaders have shied away from speaking out in favor of the deal. Merkel
has rarely weighed in on an issue that has so far been successfully
hijacked by a highly organized anti-TTIP campaign, not just in Germany
but across Europe. Hours before Obama’s arrival in Hannover, tens of
thousands of people demonstrated against TTIP.
Critics of TTIP insist that only big corporations will be the
winners, that the United States will reap most of the benefits, and that
consumers across Europe will be affected by lower standards when it
comes to food protection and social issues.
Tell that to Germany’s
Mittelstand, the medium-sized companies that are the backbone of the country’s economy. The
German mechanical engineering industry, for example, ships more than €16 billion ($18 billion) of goods each year to the United States.
But don’t think a gadget made in Germany can be sold in its original
form to a U.S. retailer. “We have to replace our EU plugs with US plugs,
even though they essentially look the same, have the same safety
characteristics and perform the same function,” said
Carl Martin Welcker,
vice president of the German Mechanical Engineering Industry and
managing partner of Alfred H. Schütte, a machine tool factory.
“We are not just talking about plugs. We use the metric system to
standardise our threads, whereas the USA measures in inches – so we have
to change the threads in certain safety pipes,” he added. “The EU and
the USA even have different requirements when it comes to the content of
operating instructions. We end up producing the same machine twice,
only differently. We have to buy materials twice, store materials twice.
Machines have to be tested twice and approved twice.”
Just imagine the extra costs if a European company wants to enter and
compete in the U.S. market. TTIP would do away with these different
standards, in turn creating more jobs for European companies—and cutting
production costs. These benefits are rarely articulated, just as the
long-term strategic implications of TTIP are almost never discussed.
Instead, TTIP has become associated with populist, Euroskeptic, and
antiglobalization movements. And there is more than a tinge of
anti-Americanism, as Obama surely sensed during his visit to London on
April 22–24. Indeed, his
public support for Britain to remain in the EU
and his pleading for European leaders to support TTIP were really about
the United States wanting a stronger Europe and a revitalized
transatlantic relationship.
Unless there is a major shift across Europe in the coming months,
Obama’s bid to clinch what would be a historic trade deal will elude
him. Russia and China will no doubt be relieved.
Note EU-Digest: The above report in favor
of the TTIP , put together by a a US Democratic Party supported
Think-Tank also contains some major omissions which are not in favor of
this TTIP.
These include:
The disappearance of jobs in some sectors
Increased international competition will lead to fewer jobs in
some sectors. Research has shown, for example, that jobs will be lost
among producers and exporters of machinery and meat. The Netherlands is
looking for ways to compensate for job losses. The Minister for Foreign
Trade and Development Cooperation is consulting the trade unions on this
issue.
TTIP must not have a negative impact on our European social model.
The government seeks to safeguard labour relations and terms of
employment in the Netherlands. The government has asked the Social and
Economic Council (SER) for advice on protecting labour standards in
TTIP.
Concerns about lower standards
There are concerns that TTIP will lead to lower European
standards. Like standards on food safety, the environment, privacy and
labour conditions. TTIP’s benefits must not be brought about at the
expense of people, animals and the environment. The Netherlands and the
EU want to see firm guarantees to this effect in the agreement. See What guarantees does the EU want to see in TTIP?
Concerns about TTIP’s impact on low- and middle-income countries
TTIP could have an adverse impact on some low- and middle-income
countries and their products. Yet TTIP’s benefits for these countries
seem to outweigh the disadvantages. Higher economic growth in the US and
the EU means, for example, more market opportunities for other
countries, including poorer ones. The agreement should also make it
easier for developing countries to export to the EU and the US.
The economic benefits of TTIP must not be enjoyed at the expense of
low- and middle-income countries. The Netherlands believes that the
agreement must offer just as many benefits to these countries, too. It
has consistently called for a focus on these countries’ interests. The
Minister for Foreign Trade and Development Cooperation has commissioned a
thorough study of TTIP’s impact on them.
Concerns that companies will be able to do as they please
Some civil society organisations are concerned that the
investment protection provided by TTIP will give companies too much
power. They fear it will limit governments’ democratic scope to make
laws and regulations. This is known as the regulatory chill effect.
Foreign investors that feel they
have been disadvantaged can, for
example, challenge a government decision.
The Netherlands and the EU want to see a chapter on investment
protection in TTIP that will prevent this from happening. That can be
achieved by setting clear rules for conflicts between governments and
investors. TTIP presents an opportunity to improve the traditional
system of investment protection. The European Commission and the
Netherlands are pressing for balanced system of investment protection
that precludes abuse.
Read more: Obama’s Push for a New Transatlantic Relationship - Carnegie Europe - Carnegie Endowment for International Peace
