The Stop TTIP alliance recently handed over 3.28 million signatures to President of the European Parliament Martin Schulz.
Almost half were from Germany. Rarely has there been such vocal criticism of an international treaty, and rarely has there been so much solidarity among the groups opposing it.
While the free exchange of goods and services is something we should welcome, it cannot be made into a tin god. The unobstructed exchange of goods isn’t always the best way to reach a higher path of growth.
There are good reasons to argue that temporary trade restrictions can actually promote the modernization and industrialization of an economy. Economic history shows that this was how many of today’s leading industrialized nations, such as the United States, Great Britain and Germany, prepared their path to global prominence. China’s rapid rise to become a major economic power also wasn’t the result of rapid liberalization of its goods and capital market.
If the Transatlantic Trade and Investment Partnership, or TTIP, is signed in 2016 as planned, the German economy will likely be the biggest winner in Europe. As the European export nation par excellence, the United States recently became its most important trading partner.
But it is unclear how significant these benefits will be. Tariffs between the U.S. and the E.U. are already relatively low, and a further reduction would hardly exert any measurable impact on growth. Economic impulses would result primarily from the dismantling or harmonization of norms, technical standards and rules to protect workers, consumers and the environment.
“This makes it more difficult to assess and judge the beneficial effects of TTIP,” the German Council of Economic Experts wrote recently, and rightfully so.