TTIP-ING POINT

Raising False Hopes on Free Trade

HANOVER, GERMANY - APRIL 23: Protesters rallying against the TTIP and CETA free trade agreements march on the eve of a visit by U.S. President Barack Obama on April 23, 2016 in Hanover, Germany. Many in Germany are wary of the agreements and claim that both TTIP, a free trade agreement being negotiated between the European Union and the United States, and CETA, a similar agreement between the E.U. and Canada, will have far-reaching negative impacts in Europe that include labor, economic, environmental and legal aspects. (Photo by Sascha Schuermann/Getty Images)
Protesters rallying against the TTIP in Hanover, Germany.
  • Why it matters

    Why it matters

    The federal economics ministry said “fundamental differences of opinion” stand in the way of the Transatlantic Trade and Investment Partnership, or TTIP.

  • Facts

    Facts

    • The chancellor has spread false hopes regarding the timetable for TTIP, the author argues.
    • In the United States, both the Republican and Democratic candidates for president oppose the pact.
    • No industrial country benefits from open markets as much as the exporting republic of Germany.
  • Audio

    Audio

  • Pdf

In more than a decade as German chancellor, Angela Merkel has justifiably earned a reputation as a problem-solver. She minimized the consequences of the global financial crisis as much as possible, kept Greece from going bankrupt and prevented the euro zone from falling apart.

But increasingly, Ms. Merkel seems to be losing this capability. The fight against the international terrorism has been just as fruitless as attempts to normalize diplomatic relations with Russia.

No industrial country benefits from open markets as much as the exporting republic of Germany.

The difference between wishful thinking and reality is most evident in her handling of the refugee crisis in Europe and negotiations for a trans-Atlantic free trade agreement.

The way things stand now, much will still have to happen for migration to be deemed manageable. This includes not only integrating more than 1 million refugees in Germany, but also protecting Europe’s external borders, which have become the Continent’s Achilles heel. In this context, Ms. Merkel’s “We can do it!” sounds like a pious fantasy.

The chancellor also spread false hopes regarding the European-American trade agreement. Ms. Merkel repeatedly cited the possibility of successfully concluding the talks this year, before U.S. President Barack Obama is replaced by one of two candidates who oppose the pact.

In fact, the timetable is utterly unrealistic, because the negotiating parties have not drawn significantly closer in their positions.

An interim report by the federal economics ministry said “fundamental differences of opinion” predominate, for example regarding investment protection or public procurement.

The unmistakable message of the governmental paper is that a minor miracle would have to occur for these obstacles to be overcome in the coming months.

But a failure of the TTIP negotiations would be bad news for the German economy. No industrial country benefits from open markets as much as the exporting republic of Germany.

Of course, the success of the trade agreement doesn’t lie entirely in the hands of the chancellor. But she does have the power to foster a realistic assessment of the trans-Atlantic trade talks. Hope doesn’t create jobs.

From the famous Social Democrat Kurt Schumacher, who lead the center-left party from 1946 to 1952, comes an apt maxim: “Politics start by staring reality in the face.”

Chancellor Merkel should once again make this insight the basis for her policies.

 

To contact the author: afhueppe@handelsblatt.com

 

Sven Afhüppe is Handelsblatt’s editor in chief. To contact him: afhueppe@handelsblatt.com.

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