TTIP highlights France and Sweden’s similarities

TTIP highlights France and Sweden’s similarities

Sweden and France’s societies seem remarkably different, but these countries have political similarities and shared interests in TTIP negotiations.

On September 29th, Swedish Liberal People’s Party politician Cecilia Malmström was confirmed as the nominee for the position of chief trade commissioner overseeing the free trade negotiations between the US and the EU, also known as TTIP.

The 41-year old faced a battle for influence mere days into her trade nomination.

Despite her stated openness to the idea of negotiating transparency measures that could help make investor dispute settlement palatable to European MEPs, she surprised observers at the press conference during her nomination when she categorically rejected the inclusion of such future measures.

Some observers worried Malmström was setting herself up for conflict with Juncker, and especially his head of transition, Martin Selmayr, but her nomination to the chief trade position in the European Union was seen as a sign Juncker’s Commission will stay the course of pursuing a liberal, largely pro-free trade agenda in Brussels. By October 2nd, Malmström had backtracked on the statement, which she said was inserted into a final draft of her speech.

Malmström’s nomination came at the same time as the 7th round of TTIP negotiations, which ended on October 3 and saw high levels of interest in the confirmation of Ms. Malmström, who replaces outgoing trade commissioner Karel de Gucht.

After the nomination of Jean-Claude Juncker to the presidency of the European Commission, it was clear he would address the concerns of his fiercest critics, including first and foremost the United Kingdom.

Juncker’s appointment of Malmström and British MP Jonathan Hill to financial regulatory positions were seemingly concessions to an increasingly conservative consensus in the EU, but also to the concerns of nation states. It was this conservative consensus which led MEPs to question not just the relatively inexperienced Federica Mogherini just weeks earlier, but also France’s pick for economics commissioner, Pierre Moscovici.

The concerns of nation states are clearly paramount in the free trade process, which is why studying the makeup of the new Commission, and understanding its strategies, is helpful.

If TTIP negotiations are to end successfully, and before U.S. presidential elections in 2016 as projected, they will need to be ratified by the European Council and all 28 member states between now and then.

No change in course for France?

The current fragility in the government of French President François Hollande, recently somewhat buoyed by the failed challenge to his presidential power in the form of a Senate vote for Hollande’s second-in-command, orchestrated by Nicolas Sarkozy (whose candidate lost), is indicative of problems to come.

The challenge represented by former president and UMP politician Nicolas Sarkozy, coupled with the perception among the opposition that the current government is weak in the face of the emergent Front National, will not disappear overnight.

Second, France’s cultural industries, which depend so heavily on public support, are heavily in opposition to a free trade deal, even as some lobbyists in the agricultural and telecommunications industries have rallied in support for trade liberalization.

Third, France is convinced investor-state dispute settlement is not the way to go, unless significant transparency measures are implemented.

France’s minister of foreign trade, Nicole Bricq, argued in February that state-to-state arbitration, rather than investor-state dispute settlement (ISDS) measures, would be sufficient to ensure investors are protected under TTIP. State-to-state arbitration, which comprises commonplace customary legal measures, excludes the final option of investors pursuing lawsuits against states for ill treatment.

With the French economy stagnating in 2014, and projections for growth just under 1% in the coming year, the French are concerned about the effects of a new fiscally conservative or austerity-based consensus. Despite the government’s claims it is doing all it can to pursue a more fiscally cautious line, France effectively fears being left out of shaping the TTIP process.

However, it is also one of the most important voices in the European Union, next to Germany, which is arguably also critical of the free trade negotiations as they stand.

Sweden’s new face in the European Union

With a population of 9.5 million, Sweden in some ways represents the voices of the European Union’s smaller member countries, both in population and in relative influence. Sweden and France are similar, however, in significant ways: Although projected economic growth in 2015 in Sweden is 2.4%, the Swedish social democratic model and the two countries’ compatible foreign policies and shared history mean there is much in common.

The surprising victory for the social democratic, left, and green parties in elections in early September, in which Stefan Löfven defeated the incumbent centre-right Moderate Party, led to the formation of a minority coalition on October 3rd.

Some future scenarios could play out:

  1. France is likely to negotiate concessions on its future budget, postponing the more severe austerity measures that would make it compliant with EU budget deficit targets until 2017. Still, the French government agreed to an historically high €21 billion public spending cut on October 1st. France and Germany’s socialists, however, will have more reason to work together, and find common ground on TTIP.
  2. Sweden will struggle to push through a budget by December because of the requirement of working with both a liberal-moderate and far-right opposition which opposes further spending on immigration and welfare. However, if Sweden emerges with a new budget, it may reset its course, creating a possible chasm with the European conservative consensus.
  3. Finally, governments are likely to focus on further transparency measures in line with national proposals and international directives (UNCITRAL), rather than removing ISDS from a final deal. The success of the deal seems to weigh on the inclusion of ISDS, without which the United States would surely refuse to sign a deal.

Although it is difficult to predict Sweden’s future position on free trade, especially given the rise of Sweden’s far right, it is likely the new government will pursue a more critical agenda, reversing some of the former administration’s austerity measures and addressing longer-standing social issues in Sweden.

Categories: Europe, Politics

About Author

Amelie Meyer-Robinson

Amelie has worked at the German Committee on Foreign Affairs, the OSCE and the G8 Research Group at the University of Toronto. She is a graduate of the London School of Economics and the University of Toronto - Trinity College.