EU Commission faces a TTIP obstacle course

EU Commission faces a TTIP obstacle course
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The 6th round of negotiations for the Transatlantic Trade and Investment Partnership (TTIP) – an ambitious free trade deal between the EU and US – were held in Brussels last week. However, opposition from multiple sides challenges the European Commission.

Though there were no “massive breakthroughs” in the latest round of TTIP negotiations, the Atlantic envoys managed to create some solid groundwork for future talks. The EU’s chief negotiator Ignacio Garcia Bercero stated that they were already finalizing consolidated texts on SMEs and trade facilitation. Considering the agreement is projected to create billions of dollars in growth on both sides of the pond, this should be great news.

But like almost all free trade agreements, TTIP has been the focus of a lot of heated debate. Workers in protected industries and those who fear that regulatory standards will fall have been strongly outspoken. Many Europeans have been especially concerned about the investor-state settlement dispute (ISDS) mechanism, as well as issues of data privacy. Since this summer, their voices have grown stronger and stronger.

Indeed, rallies across the UK expressed fears that TTIP could endanger their beloved National Health Service (NHS). And the German public discourse has revolved around the idea that chloroform-bleached chicken (Chlorhühnchen) could become common practice in Germany like it is in the US if TTIP goes through. Meanwhile, a mass coalition involving 150 organizations across 18 countries has begun a citizens’ initiative to stop the talks altogether.

Of this opposition, Germany’s voice is the most critical. Considering it is the EU’s largest exporter and has the most MEPs in the European Parliament, Germany’s attitude is very important in any EU trade negotiations. According to EU law, no trade agreement can be ratified without the European Parliament’s approval, and MEPs are already viewing the ISDS mechanism and transparency as problematic.

In its defense, the EC is doing its best to calm these fears. Officials regularly remind the public that an investment dispute mechanism is commonplace in all trade agreements, and was even invented in Germany. They are adamant that genetically modified foods and chloroform chicken are off the negotiating table, and Mr. Bercero even sent a letter to the House of Commons vouching for the safety of the NHS.

To address transparency, the Commission has published its negotiating positions on many (but not all) topics, and has tried to include civil service in the process by holding stakeholder events at the beginning of each round of negotiations. It even called for consultations from individual EU citizens on how to proceed with TTIP negotiations, of which it received over 150,000.

But some issues will remain thorny without help from US colleagues, most notably financial services regulation. Seen as essential to EU stakeholders but unacceptable to American negotiators, it is set up to become a major obstacle in future talks. Both sides have remained stubborn on their negotiating positions, but the fact remains that without transatlantic cooperation on financial regulation, Europeans and MEPs will only be edgier about the trade agreement.

On another note, a recently leaked document reveals how ambitious the EC is to open US crude oil for export. While this may seem attractive in terms of decreasing energy dependence on Russia, many environmentalists will not be thrilled at the idea of contributing to increased fracking. At the same time, if the EC fails to secure energy concessions from the US, many others will be disappointed.

Overall, the Transatlantic Trade and Investment Partnership is suffering from a combination of anti-US, anti-corporation and anti-EU opposition across multiple, interwoven platforms. Nevertheless, there is still a significant political and corporate push for the agreement to be completed. The situation in Ukraine and souring relations with Russia are pulling the EU and US closer together, and a number of areas are of mutual interest.

A key factor in the process is the new European Commission President, Jean-Claude Juncker. He has consistently touted the importance of TTIP and recently said that striking a deal will be one of the five priorities of his administration. It will also be exciting to see who becomes the next Trade Commissioner after Karel de Gucht, and how well he or she will meet the challenge of keeping US negotiating partners, MEPs and the European public happy. If he or she does not, TTIP may have to wait a few extra years.

Categories: Economics, Europe

About Author

Karl Sorri

Karl has gained global experience working at the Transparency International Secretariat in Berlin, the Political/Economic Section of the U.S. Embassy in Helsinki, and as a freelance journalist. Karl holds an MA in Politics from the University of Glasgow and an MSc in International Relations from the London School of Economics.