GERMANY-US

Economics Minister Snubs Merkel on TTIP

zypries, RC11DFC7C750
TTIP? What TTIP? Picture source: Reuters.

With Germany in full election mode, Chancellor Angela Merkel’s coalition government is struggling to present a united front in Washington. Indeed, Berlin is sending mixed messages to the Trump administration on one of the most difficult issues in US-German relations – trade.

During her visit to the US in March, Chancellor Angela Merkel personally lobbied President Donald Trump to resume negotiations for the Transatlantic Trade and Investment Partnership, or TTIP. She made clear to Mr. Trump that bilateral trade deals were not possible with single EU member states. If Washington wanted a deal, it would have to negotiate with Brussels.

But Economics Minister Brigitte Zypries is singing a different tune during her trip to Washington this week. Instead of reinforcing the chancellor’s message, she is contradicting it. Ms. Zypries sees no reason to pursue TTIP at the current time given the Trump administration’s protectionist stance.

“It is not likely the US will resume negotiations over TTIP,” Ms. Zypries told Handelsblatt. “We will not make the topic a focus of our discussions. There are more pressing issues with the United States.”

“As long as the US doesn't have a clear trade strategy, it makes no sense to restart such an ambitious undertaking.”

Bernd Lange, Trade Committee Chairman, European Parliament

The tug of war between the economics ministry and the chancellor’s office is as much about election year politics as it is about trade policy. Ms. Zypries is a center-left Social Democrat and Ms. Merkel leads Germany’s conservatives.

The chancellor, for her part, is embracing the anti-Trump mantle and plans to campaign unequivocally in favor of free trade. Though her center-right Christian Democratic Union, or CDU, will not officially adopt its campaign platform until July, the party has already staked out a clear line on economic policy. At a CDU meeting this week, party bigwigs from Germany’s 16 states, the federal government and the European Union called for the “resumption of negotiations” with the United States over TTIP.

The Social Democrats, on the other hand, have always been more reluctant to offer full-throated support for complex, comprehensive trade agreements like TTIP. Indeed, US protectionism is not the culprit in the collapse of the trade talks. TTIP faltered largely due to grassroots opposition in Germany, where activists were concerned the deal would hollow out labor, environmental and consumer standards and weaken the regulatory powers of parliament. The SPD’s left-wing base generally shares these views, which has put the party’s more trade friendly leadership in a bind.

While Ms. Merkel has held out hope that the deal can be revived, Foreign Minister Sigmar Gabriel, a leading Social Democrat, declared the talks dead months ago. And the head of the European Parliament’s trade committee, Bernd Lange, said Washington needs to clarify its position on TTIP before talks can resume. While President Trump campaigned aggressively against the Trans-Pacific Partnership and quickly withdrew from that deal upon taking office, he has largely been silent on transatlantic trade talks.

“As long as the US doesn’t have a clear trade strategy, it makes no sense to restart such an ambitious undertaking,” Mr. Lange, also a Social Democrat, told Handelsblatt.

Ms. Zypries is pushing back against the Trump administration's proposed laptop ban for inbound flights from Europe.

Given the opposition among her party’s base, Ms. Zypries has little political incentive to campaign aggressively for TTIP in Washington this week. That does not mean that Ms. Zypries has any sympathy for Trump-style protectionism. In fact, she has campaigned aggressively for the interests of German companies in the United States since Mr. Trump took office.

Though Ms. Zypries is not sticking up for TTIP, which enjoys broad support among German companies, she is pushing back against the Trump administration’s proposed laptop ban for inbound flights from Europe. “A laptop ban would prevent mobile work on flights and would mean millions in damage for our companies,” Ms. Zypries said.

The economics ministry estimates that European companies face up to €160 million ($177 million) in damages from the mooted laptop ban. According to the German Business Travel Association, 720,000 business travelers fly to the United States every year. The economics ministry estimates that they work about three hours per flight at a value of €75 per hour.

Washington has already banned laptops and tablets as carry-ons on flights from several Muslim-majority countries out of concern about terrorist attacks and has been considering doing the same for inbound European flights. Ms. Zypries, however, doubts that such a measure would do more to strengthen security than the checks that are already in place before boarding.

“I have no indications that such a ban is more sensible than carrying out security controls before departure,” Ms. Zypries said. A laptop ban would also put German companies at a comparative disadvantage to companies that fly out of other regions of the world, she said.

Dana Heide is a political correspondent for Handelsblatt in Berlin, focusing on the economics ministry. Till Hoppe reports on politics for Handelsblatt, with a focus on defense, domestic policy and cyber issues. Moritz Koch has been Handelsblatt’s Washington correspondent since 2013. To contact the authors: d.heide@vhb.de, koch@handelsblatt.com, hoppe@handelsblatt.com

We hope you enjoyed this free article.

Subscribe today and get full access to market-moving news in Europe's leading economy.