TTIP divides a continent as EU negotiators cross the Atlantic
The Guardian | 8 December 2014
TTIP divides a continent as EU negotiators cross the Atlantic
A fear of multinationals and distrust of European governments is fuelling a growing antipathy towards the transatlantic free trade pact
Ian Traynor in Brussels
Rarely has a trade agreement invited such hyperbole and paranoia. The Transatlantic Trade and Investment Partnership (TTIP) – or proposed free trade pact between the US and the European Union – has triggered apocalyptic prophecies: the death of French culture; an invasion of transatlantic toxic chickens into Germany; and Britain’s cherished NHS will become a stripped-down Medicare clone.
From the point of view of free-trade cheerleaders, EU carmakers will more than double their sales, Europe will be seized by a jobs and growth bonanza and city halls from Chicago to Seattle will beg European firms to build their roads and schools. The world’s biggest trading nations will have no choice but to play by the west’s rules in the new world created by TTIP.
Such are some of the claims made for TTIP which is now stoking a propaganda war on a scale never seen before in the arcane world of tariffs and non-tariff trade negotiations.
“It’s the most contested acronym in Europe,” said Cecilia Malmström of Sweden, the EU trade commissioner about to take charge of the European side of the negotiations. She stepped into the fray on Sunday, her first trip to Washington since taking up her post in November.
TTIP dominates her intray. Eighteen months after the launch and seven rounds of talks, everything remains up in the air. The Americans are worried. Those in Brussels running the negotiations sound crestfallen. The opposition in Europe to a transatlantic free trade area believes it has the momentum, buoyed by scare stories regularly amplified by the European media. A petition against the trade pact surpassed the 1m mark this week. It will be handed to Jean-Claude Juncker, the European commission chief, in Brussels on Tuesday, as a present on his 60th birthday.
“There is mistrust,” Matthew Barzun, the US ambassador in London, told the Guardian. A key EU official put it another way: “[TTIP is] more sensitive politically in Europe than in the US.”
Over the past 18 months, both sides have been setting out their shopping lists. The hard talks will take place between February and July 2015 as the contours of a deal become clearer.
“The real negotiations haven’t really started yet,” said Malmström. “But the real point with TTIP is to have an ambitious agreement. There’s no point just doing the low-hanging fruit.”
The Americans want to conclude the pact within a year while Barack Obama is still in the White House. The Europeans would also like this, but appear less stressed about the deadline. “We’re not in a hurry. I’m here for five years,” said Malmström. “But if we get the skeletons done under Obama, that will be fantastic.”
The easy bit, say those involved in the talks, will be the removal of tariffs and duties on goods whichonly amount to 3% of their aggregate value. Eighty percent of the perceived benefits would come from a breakthrough on non-tariff barriers, which could usher in the harmonisation of transatlantic standards and regulations on everything from food labelling and drugs-testing to the manufacture of cars or electrical components.
The Europeans want access to financial services in the US, Washington is resisting. Brussels also insists on equal access to public procurement tendering and contracts in the US. And it wants to protect European foodstuffs through the protective system that decides what can be called champagne or camembert, Parma ham, or scotch whisky.
“Geographical indicators are very important to the EU. The US has different ideas,” said Malmström.
“The Americans are a little bit surprised we think their foods are inferior. They don’t understand why we feel so superior,” said Marietje Schaake, a Dutch liberal MEP on the parliament’s trade committee.
In an attempt to counter what US ambassador Barzun describes as “myths” and “scaremongering” in Europe about aspects of the proposed pact, both sides emphasise there is nothing in the talks that could facilitate the privatisation of public services such as the NHS.Audio-visual services have also been excluded to appease French fears of Hollywood and Silicon Valley decimating the French film and television industries. American hormone-fed beef, GM foods, or chlorine-washed chickens will not be allowed in Europe, the European commission maintains, for as long as they are proscribed in the EU.
And yet senior commission officials admit they are fighting a losing battle against a tide of hostile and “emotional” public opinion that has taken them by surprise and that they are ill-equipped to counter. “I need to try to understand the scepticism, the fears,” said Malmstroem.
Resistance is most acute in Germany, as well as in Austria and France. The European slump and currency crisis of the last five years has sapped confidence in governing elites, sown fear of globalisation, and a mistrust of the corporate world and marauding, tax-avoiding multinationals. The Snowden and NSA mass surveillance scandals have eroded faith in the Americans and strained transatlantic relations, especially in Germany, where the Americans were found to be tapping Chancellor Angela Merkel’s mobile phone. Around 200 questions have been tabled in the German parliament on aspects of TTIP, reflecting how MPs have been besieged by their constituents.
Germany is by far Europe’s biggest exporter and has most to gain from a transatlantic free trade area. EU car exports to the US, for example, could soar by 150% if a satisfactory deal is struck, say negotiators. Germany is Europe’s biggest carmaker.But another reason for German ambivalence is complacency, that Berlin is happy with the way things are, that it is not worth the risk of a popular backlash. Merkel is widely seen as risk-averse, a keen student of opinion polls and not known to get too far ahead of public opinion in her policy-making.
The biggest issue in the talks and the focus of the growing opposition to the pact is a touchstone for all these inchoate fears – investor protection, or the system known as investor-state dispute settlement (ISDS), which allows companies to bypass national courts and sue governments for damages on lost investments in extra-territorial arbitration panels.
For the critics, this amounts to a surrender of national political sovereignty to the deep-pocketed multinationals, with business, not government, setting the rules of international trade.
This apprehension is not necessarily rational, but it is very potent. The ISDS system has existed for almost half a century, and there are 9,000 such agreements operating globally, 1,400 of them in the EU. Although Germany has practised the system since 1969, Germany remains the biggest opponent of writing ISDS in to the trade pact, perhaps because Vattenfall, the Swedish energy giant, is suing Berlin for billions in damages following Merkel’s decision to abandon nuclear power.
“At the end of the day there’s a risk this agreement is going into troubled waters because of ISDS,” said Bernd Lange, the German social democrat who chairs the European parliament’s trade committee.
Reflecting the German position, Juncker has said he wants no ISDS mechanism in the trade agreement. Malmström is known to favour a “reformed” version of ISDS. The EU’s biggest trade pact to date – an agreement with Canada concluded in August – includes ISDS, setting a precedent for the US deal.
Malmström was humiliatedlast month when Juncker’s staff contradicted her position and Juncker took authority for ISDS out of her remit, handing it instead to Frans Timmermans, the new commission’s powerful number two.
Given the widespread and growing opposition, Malmström has quickly concluded that perhaps the only way to tackle the scepticism is to moderate the secrecy surrounding the negotiations and launch a new campaign of glasnost.
After a year of rejecting demands, the commission has published her negotiating mandate from the EU’s 28 governments. Her negotiating proposals, though not the outcome of the specific talks chapters, are now to be made public, and MEPs are to be given access to restricted documents. Lange complains that only 13 of 751 MEPs are currently allowed to see sensitive paperwork. Malmström said all MEPs will soon have access. However, there will be limits to Malmstroem’s transparency. “In a negotiation, you have to let the negotiators negotiate,” said one senior official.
Taking office this week as the new president of the European Council, chairing summits and mediating between national leaders, Donald Tusk, Poland’s former prime minister, singled out TTIP as one of his main priorities for the year ahead. The Europeans argue that with the world trade agreement talks stuck, the TTIP offers a chance to break the deadlock and fasten down high standards of consumer, environmental, and legal safety that China and the emerging economies will be forced to emulate.
“This is the mother of all agreements. It’s a huge market and the EU needs growth desperately,” said Malmström. “Europe’s role in the world is waning. Growth will come from outside. And this will set global standards for the rest of the world.”
The pact will prove an uphill struggle in a jaundiced Europe fed up with its political and business elites.
