They were the biggest protests in Germany since the Iraq War. On a drizzly Saturday in September, over 300,000 people marched in seven major cities, including Hamburg, Munich and Berlin. They were activists of every stripe and color, but also many ordinary Germans, all united in their fight against the proposed trade accord between Europe and the United States. Unease about the Transatlantic Trade and Investment Partnership (TTIP) runs deep. Some 45 percent of Germans tell pollsters they want negotiations stopped, far more than in most other European countries. Shortly after the demo, Economics Minister Sigmar Gabriel pronounced TTIP “de-facto failed.”
The deal’s supporters, which include the German government and much of the business community, can’t believe their eyes. How can the world’s most trade-dependent major economy, where tens of millions of jobs depend on globalized markets for German products, lead the opposition to creating the world’s largest free-trade area? If the U.S. and Europe, the most economically intertwined blocks in the global economy, can’t agree on free trade, who can?
The answer is a lesson on the power of NGOs, and the ineptitude of politicians and business leaders. In the battle over public opinion, one side mobilized its armies, while the other withdrew without resistance. In a climate of skepticism about the benefits of globalization and free trade – with rising economic nationalism on both the left and the right – it was a lop-sided fight from the start.
The protests in September featured effigies of Barack Obama and accusations that America 'controls' Germany,
That’s not to say that the deal didn’t have hotly contested issues, as trade negotiations always do. There was hard negotiating about which sectors would be included in the deal and which exempted from competition. The French want to protect their movies and music, the Germans love their book price fixing, and the Americans hope to keep their “Buy American” public procurement rules. There was controversy about environmental and safety standards, and about expanding the power of arbitration bodies in settling trade disputes.
But the German activists managed to frame the entire deal as evil from the start. Beginning around 2013, “TTIP kills” appeared on countless Facebook posts and protest signs. The “chlorine chicken” became the movement’s mascot, as a stand-in for allegedly lower food safety standards in the United States. The haggling that necessarily goes on behind closed doors – and the negotiators’ quaint idea that they could hammer out a deal and only then go public – was quickly weaponized as “clandestine” by the NGOs. Each of these messages resonated with many Germans and quickly went viral, setting the tone for the debate.
The establishment never knew what hit it. From the start, the debate was heavily dominated by TTIP opponents. They were ever-present at public events, on television talk shows and in media reports. Google TTIP in Germany and the top results are paid ads by opponents. According to a study by economist Matthias Bauer at the ECIPE think tank, over 90 percent of all German Facebook and Twitter posts originate from the two main anti-TTIP campaigns. One of these NGOs, Berlin-based Campact, spends a large part of its €7 million annual budget on its anti-TTIP campaign. Little is known about the identity of its biggest donors, but Campact also sends checks to anti-trade groups in Austria, Sweden and the United States. A good deal of the international opposition seems to have been organized and financed by German NGOs.
As the campaign went into full gear, the pro-TTIP establishment was asleep at the wheel. German business leaders blame Berlin, and Gabriel in particular, for not doing more to support the pact. True enough, both Gabriel and his boss Angela Merkel said the agreement was crucial for the German economy, but never stepped to the plate when they were needed. “This summer at the latest, when anti-TTIP voices reached a crescendo, the chancellery should have gone into crisis mode,” says Roland Schatz, CEO of Swiss-based advisory group Media Tenor.
But German business leaders also have themselves to blame. Daimler CEO Dieter Zetsche was one of the few top executives to come out strongly in public to support the deal. Most German CEOs, however, stayed on the sidelines, and never explained to their country why it should favor TTIP. Richard Gaul, former BMW communications chief, explains their reticence, “They didn’t want to be visible taking a stand. ‘I don’t want people demonstrating in front of my headquarters,’ is how they think.” Most German CEOs, he says, thought they could delegate the fight to functionaries and lobbyists. That’s not how battles for public opinion are won today, and it was a huge and costly blunder.
Big industry is the Goliath to the NGO’s David, so how come it was such a lopsided fight? The old clichés about NGOs may no longer be so true. Successful NGOs bring in many millions of euros in donations to fund a single issue, and all that money gets spent on campaigns. Yet even the biggest multinational spends only a tiny sliver of its budget and manpower on an issue like TTIP. Many of today’s hyper-professional NGOs are no less effective at political lobbying as industry. What’s more, a revolving door between the NGO sector and government often allows them to work from the inside. The German environment ministry, where many former NGO workers have found jobs, mobilized against its own chancellor and economics ministry by funding an anti-TTIP group.
There is another reason German businesses are on the defensive. Thomas Petersen, an expert on public opinion at the Allensbach Institute, says that anti-trade arguments fall on very fertile ground. “We see it in our opinion polling going back all the way to the late 1940s,” Petersen says. “Despite all their economic success and prosperity, Germans never really made peace with the market economy and remain skeptical of markets and trade.” Petersen also sees an undercurrent of skepticism towards the United States that played into the opponents’ hands. The protests in September featured effigies of Barack Obama and accusations that America “controls” Germany, including Angela Merkel. It didn’t help that the NSA phone-tapping scandal erupted just as the anti-TTIP campaign was gathering force.
With the winds of public opinion (urged onward by the activists) blowing so strongly against trade – and with pro-trade voices so weak and disorganized – the fallout could be tremendous for Germany’s trade-dependent economy. A similar trade pact just concluded between the EU and Canada may be the last successful agreement in a very long time. The likelihood of a free-trade deal between Britain and the remaining EU members is dwindling by the day. Not everyone, of course, thinks that would be a loss. But those who still believe in the benefits of globalization need to speak out a lot louder, and quickly.
This article is from the Fall 2016 issue of Handelsblatt Global Edition Magazine. Stefan Theil is the magazine’s managing editor.