Trade Off

SPD Quells Revolt Over U.S. Transatlantic Trade Pact

tipp no dpa
Demonstrations against TTIP in Berlin last week in front of the Reichstag.
  • Why it matters

    Why it matters

    The junior party in Chancellor Angela Merkel’s ruling coalition has the power to veto Europe’s proposed trade agreement with the United States.

  • Facts

    Facts

    • The SPD left wing fears German environmental, labor and consumer protections could be undermined through the pact.
    • SPD leader Sigmar Gabriel convinced his party to back the deal, promising it would not undermine existing laws.
    • The CDU, winner in the last German election, largely supports the trade treaty for its job-creation benefits.
  • Audio

    Audio

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Germany’s Social Democratic Party, a partner in the ruling coalition with conservative Chancellor Angela Merkel, held a contentious meeting over the weekend on the proposed transatlantic trade treaty with the United States which some had feared would undermine European health and safety laws.

At a raucous meeting over the Transatlantic Trade and Investment Partnership, during which the SPD’s left wing threatened to scuttle the pact, the party’s leader, Sigmar Gabriel, hammered out a compromise that appeased both sides — for now.

“The decision is a success for the SPD,” said Ralf Stegner, a leader of the party’s left-wing and strong critic of TTIP and Mr. Gabriel, who is vice chancellor and Germany’s economics minister.

“We drew a clear red line,” Mr. Stegner told Handelsblatt.

Mr. Gabriel, who has favored a more moderate approach and is seen as pro-TTIP, was also pleased. Each of the 28 countries in the European Union must approve the agreement with the United States in order for it to proceed.

“We are very happy and thankful” that top SPD decision makers decided to continue with the trade talks, Mr. Gabriel said. Backers of the proposed trade agreement, which would eliminate customs duties and simplify export and import of goods across the Atlantic, say the agreement will create millions of new jobs.

The left wing of the SPD, led by Mr. Stegner, had initally threatened to suspend TTIP negotiations. Critics are wary of a clause in TTIP that would empower arbiters, not national courts, to decide differences in trade disputes. Critics have also charged that TTIP negotiations have been opaque and done outside the public eye, which participants dispute.  Some have also charged that European labor and consumer rights would be watered down, which backers deny.

On Saturday, party leaders voted to continue trade talks with the United States by a huge majority – a move supported by Mr. Gabriel.

Mr. Stegner, the regional SPD leader in the northern state of Schleswig-Holstein and his followers came on board after the party agreed to reject any treaty weakening German workers’ rights, consumer protection, social and environmental standards.

The restrictions were backed by the German Federation of Trade Unions and the German Economics Ministry.

“There shouldn’t be any special laws between democratic states. It’s good that we have stated this,” Mr. Stegner said.

The SPD’s left wing also pushed through a demand that the Bundestag and the upper chamber, the Bundesrat – as well as the European Parliament — be required to approve the treaty. SPD members said there was a very lively discussion surrounding TTIP. Mr. Gabriel cornered left wing members to work out the details.

The party agreed to reject any treaty limiting workers’ rights and consumer protection laws as well as one that would weaken social and environmental standards.

Chancellor Angela Merkel of the Christian Democratic Union lobbied for the TTIP treaty during a separate video address to the nation.

The world’s two largest economic zones could “only profit from one another if  they reduce trade restrictions – whether they are customs barriers or non-tariff barriers to trade,” she said in her address. “We are clear in our position that we will not accept reductions in either consumer or environmental protection with this treaty.”

With its support of TTIP, the CDU is promoting itself as the party of jobs and prosperity. It noted that a TTIP agreement would mean “roughly €545 in extra income annually” in the average family’s pocket and would create as many as 200,000 jobs in Germany.

Ordinary citizens, not just in Germany, are not so sure.

There has been a lot of negative publicity about genetically modified crops being imported to Europe from the United States and scare talk about Europeans having to eat chickens processed with chlorine and meat with hormones. The CDU maintains that such products would not be imported.

Anti-TTIP activists remain skeptical. At the end of last week, the European organization “Stop TTIP” announced that it would take legal action against the European Union for its decision to not let the group of 240 organizations be heard at E.U. meetings.

“We will not stop our protests just because the E.U. Commission wants to gain time via a baseless and politically motivated rejection,” the group said.

Last week the E.U. Commission rejected a citizens’ initiative opposing TTIP and also a E.U. trade treaty with Canada. In 2012 the Commission created a new legal path that allows E.U. citizens to get their concerns on the Commission’s agenda if a petition is signed by 1 million E.U. citizens from at least one-quarter of the 28 E.U. countries. With that in hand, the appropriate authorities within the Commission could be required to deal with the topic.

Thomas Ludwig has been reporting for Handelsblatt as its European correspondent in Brussels for four years. Klaus Stratmann has been reporting from Berlin since 2005. He specializes in energy policy coverage and previously worked for Handelsblatt in Düsseldorf. Daniel Delhaes is a reporter. To contact the authors: ludwig@handelsblatt.com  stratmann@handelsblatt.com delhaes@handelsblatt.com 

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