TTIP Talks

A Certain Chemistry

Clariant's Günter von Au, Sahra Wagenknecht and Rainier van Roessel discuss TTIP. Source:  Vogt.
Clariant's Günter von Au, Sahra Wagenknecht and Rainier van Roessel discuss TTIP.
  • Why it matters

    Why it matters

    Germany’s chemical sector sees huge benefits from a free-trade agreement with the United States.

  • Facts

    Facts

    • The chemical business is Germany’s third-largest industry.
    • German chemical companies paid an estimated €140 million in duties on exports to the United States in 2013.
    • Industry representatives argue that fears that TTIP will lead to laxer standards.
  • Audio

    Audio

  • Pdf

All eyes were on Sahra Wagenknecht, the deputy leader of the Left Party, as she talked about the proposed trans-Atlantic free-trade treaty, which is causing a storm in Germany.

The debate over the Transatlantic Trade and Investment Partnership, or TTIP, is divided between those who see it as an essential way to keep Germany a major player on the world stage and those who see it as a way to erode fundamental European rights and protections.

Ms. Wagenknecht made it clear to the audience which side she is on.  “I believe this treaty is very dangerous, if implemented in its current form,” she said.

Andrew Denison, director of Transatlantic Networks, a think tank in Königswinter, near Bonn, promptly shot back that this way of thinking had little to do with facts, but with “a typically German rejection of American business practices.”

The two speakers joined other experts and business leaders at the annual Handelsblatt  chemicals conference in Düsseldorf on Tuesday.

The view from executives speaking at the event was that Germany’s third-largest industry supports a free-trade agreement with the United States. The move, they argued, would result in an harmonization of standards and the elimination of duties and trade barriers to further boost trade.

The United States remains the German chemical industry’s most important growth market.

“People are always talking about China, but the United States is the real shooting star in the wake of the financial crisis,” Matthias Wolfgruber, chief executive of specialty chemical maker Altana, said at the conference.

In addition to investing heavily in the United States, the German chemical industry exports products worth about about €15 billion, or $16.1 billion.

“We need the joint free market,” said Rudolf Staudigl, chief executive of Wacker Chemie. “We can put the duties we save to far better use in developing new products.”

“Germany cannot create all the rules in the world on its own. To do that, it needs a strategic alliance with the United States.”

Andrew Denison, director, Transatlantic Networks

German chemical companies paid an estimated €140 million in duties to the U.S. Treasury in 2013. According to the VCI industry association, the German chemical industry would  benefit from the treaty with production alone increasing by €2 billion.

But as much as industry wants free trade with the United States, environmentalists and consumer advocates remain critical of the plans. Many are concerned that Europe’s relatively high safety standards for chemicals could be softened to benefit U.S. companies.

The various positions on TTIP discussed at the conference appeared not nearly as far apart as one would assume with a politician from the far left on the panel.

Ms. Wagenknecht said she understands why the elimination of duties and the harmonization of technical standards between the United States and Europe are desirable, but warned that they can’t come at the cost of giving up Europe’s significantly stricter approval system for chemicals.

Rainier van Roessel, a member of the management board of Cologne-based Lanxess, a specialty chemicals group, stressed that the chemical industry had no intention of softening its standards. “Our industry has invested significantly in high standards, and we intend to preserve them, ” he said, but noted he also sees sufficient room to align with the U.S. system.

Other experts at the conference also stressed the commonalities between the two economic powers.

“TTIP is a great opportunity for the United States and Europe to create a role model for others,” said Willem Huisman, head of German operations for the US-based Dow Chemical Company. Only by joining forces, he explained, can the two markets establish and assert strong standards in environmental and occupational safety worldwide.

Or, as the American Andrew Denison put it: “Germany cannot create all the rules in the world on its own. To do that, it needs a strategic alliance with the United States.”

 

Bert Fröndhoff and Maike Telgheder are correspondents for Handelsblatt. To contact: frondhoff@handelsblatt.com and telgheder@handelsblatt.com

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