TTIP Turbulence

The Free-Trade Chancellor

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Germany is an export-heavy economy.
  • Why it matters

    Why it matters

    Time is running out for the European Union and the United States to reach a trade agreement, as U.S. presidential elections draw near.

  • Facts

    Facts

    • The TTIP negotiations have been underway for more than two years.
    • Supporters cite a successful trade agreement with South Korea as a positive model.
    • Critics see the agreement as a threat to workers’ rights, as well as Europe’s high environmental, health and food safety standards.
  • Audio

    Audio

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For Angela Merkel, the goal is clear. Europe and the United States of America must agree “to the essentials” of a free trade agreement “by the end of the year, if possible,” the chancellor told members of her party’s parliamentary group on Monday. “We need to speed up our negotiations.”

Although currently preoccupied with the dispute within her party and in Europe over the seemingly unending influx of refugees and migrants, Ms. Merkel  said the Transatlantic Trade and Investment Partnership, or TTIP,  remains important to her.

The negotiations over the free trade agreement with the United States have been underway for more than two years. Its purpose is not only to eliminate tariffs, but also to reduce regulatory barriers and expedite joint product and service standards. The agreement is intended to facilitate interaction between companies and create international standards Asian competitors would also be forced to comply with one day.

At issue is a “new benchmark for free trade agreements,” Ms. Merkel said, noting the goal is to grow together “into a common economic zone” in the medium term. But this goal, she added, has provoked fear and protests over these negotiations.

The chancellor spent almost half an hour promoting the agreement during the meeting. She cited the results of an agreement with South Korea showing a 50-percent increase in exports.

The United States is Germany’s most important trading partner. An agreement should bring growth, but it could also fail because of its “ambitious timetable,” as U.S. Ambassador Anthony Gardner recently told the U.S. Congress. The 2016 U.S. presidential election campaign will begin to heat up in about nine months, and President Barack Obama will be out of the White House by January 2017 at the latest.

At the meeting,  CDU parliamentary leader Volker Kauder said the deal “needs to be wrapped up.”

Chancellor Merkel expressly welcomed the European Commission's new proposals for a governmental investment court instead of private arbitration panels.

It isn’t a matter of lowering standards, but of recognizing each other’s standards, Ms. Merkel said. “Our standards are not subject to negotiation,” she noted, adding that countries could continue to enact their laws without fear of companies hauling them before international arbitration panels.

Critics believe the protection of workers’ rights is in jeopardy, as well as Europe’s high environmental, health and food safety standards. They also warn that lawmakers threaten to lose the right to regulate for the benefit of society, and are demanding greater transparency.

Opponents are planning a major demonstration in Berlin on October 10 under the motto: “Stop TTIP.”

“We have to make it even clearer what the agreement means,” Ms. Merkel told the parliamentarians. It would not change film subsidies or the law governing fixed book prices, she said, nor would it challenge public services, restrict workers’ rights or weaken food standards.

On Sunday, however, Ms. Merkel faced a less friendly audience at the national conference of the Ver.di services union, which opposes the free trade agreement and failed to convince attendees of its benefits.

While Ms. Merkel welcomes the European Commission’s new proposals for a governmental investment court instead of private arbitration panels, the left wing of the center-left Social Democratic Party remains skeptical. “Too many questions remain unanswered,” said Hilde Mattheis, leader of SPD’s left wing, adding: “Approval (of the proposal) by the Social Democrats is not a given.”

Klaus Müller, head of the Federal Association of Consumer Organizations, approves the new E.U. proposals. “The European Commission is making a serious effort to find a solution,” he told Handelsblatt, noting that it was good to hear that independent arbitrators would be appointed and that it would be possible to file appeals.

Mr. Gardner, the U.S. ambassador, also welcomed the E.U. proposals, calling them “good.”

The European Union and the United States will enter an 11th round of negotiations in Miami on October 19.

“The truly intense phase of the negotiations has yet to come,” Ms. Merkel said. “In the end, we want a good, fair and ambitious agreement, one that has many winners.”

 

Daniel Delhaes reports on politics, transport and airlines from Handelsblatt’s Berlin office. Thomas Ludwig is a Handelsblatt correspondent in Brussels. To contact the authors: ludwig@handelsblatt.com; delhaes@handelsblatt.com

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