Exporting to the USA: TTIP, the European View
In 2013, the European Commission, the US Government and powerful lobbies from large corporations began negotiating the Transatlantic Trade and Investment Partnership (TTIP).
The aim of this new treaty is to grease the wheels of trade between the two blocks which make up 60% of world GDP and is a market of some 800 million consumers. On occasion of Barack Obama’s visit to Europe in April of this year, negotiators claim that significant progress was made. These advances included progress in regulatory processes, SMEs, customs and the waiving of import duties. In this latter field, it was agreed that, sooner or later, 97% of tariffs would be liberalised without touching the remaining 3% which cover sensitive items such as agriculture.
Farm produce remains one of the more complex sticking points in these negotiations. It is not only, or even mainly, about tariffs, but is rather a matter of food safety and that of protected geographical denominations. The US is adamant about not accepting European demands in these points. The next round of talks will take place this summer when negotiators will try to hammer out as many agreements as they can.
In addition to the technical difficulties the negotiators from the US and EU have to deal with, they are faced with increasing opposition from many sectors of society. Many international organisations have branded these talks as secretive, lacking in transparency and loaded with questionable social practices, damaging environmental policies and cultural invasion.
The US administration admits that, despite increasing public debate, polls suggest that the majority of US citizens are in favour of free trade. However, the Bertelsmann Foundation highlights the fact that today only 17% of Germans favour the treaty compared to 55% in 2014.
The latest study on the image of the US in the world by the North-American Pew Research Center also identifies Germany as the European country in which most people reject the US. 45% of Germans claimed to be “unfavourable” whilst only 27% of French and Spaniards felt this way.
In a debate in London recently, Rem Korteweg, an investigator with the Centre for European Reform in Brussels, warned that adoption of the TTIP could make the EU “more vulnerable, more fragmented, and increase the risk of anti-American feelings and opposition to free trade”.
The leaking of documents by Greenpeace showing that the US was demanding considerable concessions from the EU in the fields of health and environment have further muddied the waters.
We are, as can be seen, in a very complex situation. Unless considerable headway can be made and differences ironed out in the next few months, the treaty will not be signed before Obama leaves the White House and the possibilities of returning to the negotiating table in the near future do not look very promising.
Please read our previous article on the American View.
Exporting to Europe: The TTIP, the US Point of View.
Barack Obama hopes to be able to sign the Transatlantic Trade and Investment Partnership (TTIP) before the end of his term as president of the US. He wishes to leave this as his legacy together with that of the Trans-Pacific Treaty which still has to be ratified. But this target will probably be missed as time is running out. On one hand, Europeans are digging their feet in. Opposition has increased considerably following the leaking of working documents by Greenpeace. On the other, neither of the leading candidates from the Republican and Democrat parties look upon the agreement favourably.
Debate on the treaty in the US has been overshadowed by the primaries to chose the candidates in the forthcoming presidential elections. Press coverage of the, highly secretive, negotiations has been negligible leaving the citizens of the US unable to discuss the pros and cons of the treaty before taking up their own positions. Candidates from both parties declared their opposition to the TPT (signed with 11 Pacific-rim countries) from the outset and the TTIP with the Europeans has tended to be included in the same (negative) bundle
On the Republican side, the future candidate, Donald Trump, has vocalised his adamant opposition the Free-Trade Treaties signed by the US in general: NAFTA; TPT and the TTIP which is still on the negotiating table. The basis for his argument is that these treaties (especially the TPT) is destroying American jobs as firms move manufacture offshore to pay less tax and employ cheap labour. The Republicans also argue that the treaties require far too many concessions with respect to environmental legislation, labour protection laws, copyrights, etc. and are, in general “bad for the US”.
The two leading Democrat candidates, Hillary Clinton and Bernie Sanders, have also expressed their opposition. The basis of Hillary Clinton’s hostility is that all Free Trade Treaties lower US wages. Bernie Sander’s aversion also includes the view that these treaties are written by and for the benefit of large corporations.
Within the Republican Party, Donald Trump’s opposition to the treaties that are currently being ratified in Congress (TPT) or still being negotiated (TTIP) are not universally accepted. For example, Paul Ryan (Speaker of the House of Representatives) favours the treaties saying: “if the US doesn’t grab it’s chances, others will”.
Whilst the candidates continue with their in-fighting, the Obama administration forges ahead with its plans to persuade the Europeans of the advantages of the treaty and the mutual benefits that will ensue from its approval. The US Department of Commerce presents TTIP as an ambitious agreement of trade and investment that will deliver important benefits to companies and workers as lowering trade barriers will offer great opportunities for American firms to compete in the world. The TTIP will provide new opportunities for American firms who already export some 20% of their products and services to Europe.