Review of TTIP

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When negotiations were launched on a Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union in 2013, hardly anyone predicted how controversial the project, which was of great importance to German business, would be in the wider public. The negotiations turned out to be difficult; since the election of U.S. President Donald Trump, TTIP is off the table.

Shortly before the 15th and – so far – last round of TTIP negotiations, Sigmar Gabriel, then German Minister of Economics, stated in an interview in October 2016 that the negotiations on the Transatlantic Trade and Investment Partnership had “de facto collapsed”. At the same time, European Union (EU) negotiator Ignacio Garcia Bercero saw the negotiations still in a “decisive phase” and hoped for a conclusion by the end of 2016. In fact, the TTIP negotiations have been on hold since October 2016.

Disputed Negotiating Areas  

Early on in the negotiations, considerable differences of interest between the EU and the United States became apparent. A total of 15 rounds of negotiations took place alternately in Brussels and various U.S. cities. By the end of the 13th round, 17 of the intended 27 chapters of the agreement had been completed. In the 15th and final round in October 2016, solid progress was achieved in the areas of small and medium-sized enterprises, customs and trade facilitation, and intellectual property. In many core issues, however, the negotiating partners still had a long way to go to finalize consolidated treaty texts. Among the most contentious issues were regulatory cooperation, access to public procurement, investment protection, labelling of genetically modified organisms (GMOs), geographical indicators, and market access for agricultural products.

TTIP Opponents and Advocates

No other trade agreement has caused as much opposition in Germany as TTIP. According to a Eurobarometer survey in all EU countries (2015), Germany (59 percent of the population against, 27 percent for TTIP) was one of the four EU member states in which the majority of the population was against TTIP, along with Austria (70 percent 'against', 22 percent 'for'), Luxembourg (47 percent ‘against’, 40 percent ‘for’) and Slovenia (47 percent ‘against’, 41 percent ‘for’). Not only a lack of transparency in the negotiations was criticized. Many also feared that TTIP - especially through regulatory cooperation and investment protection - could lower standards in Europe, for example in the areas of workers' rights as well as consumer, environmental and health protection.

From an economic point of view, the concern was unfounded. In a DIHK survey (2015), 85 percent of the companies surveyed considered the adaptation or mutual recognition of equivalent norms, standards and certifications to be important or particularly important. More than two thirds (70 percent) of those surveyed assessed a trade agreement with the United States positively. The Federation of German Industries (BDI) together with its member associations as well as the Association of German Chambers of Industry and Commerce (DIHK), the Confederation of German Employers' Associations (BDA), the German Confederation of Skilled Crafts (ZDH), the Federation of German Wholesale, Foreign Trade and Services (BGA), the Employers' Association for the Metal Industry and the Association of Family Entrepreneurs (ASU) were all highly committed to TTIP. The BDI was particularly active with a Pro-TTIP information and dialogue campaign and a citizens' dialogue.

Good Reasons for TTIP

In view of the difficult negotiating environment, it is not surprising that TTIP could not be negotiated under U.S. President Barack Obama as originally intended. This is regrettable because much speaks in favor of deeper transatlantic economic integration. The average tariffs of the EU and the United States are already quite low by international standards. However, both trading partners still have many peak tariffs that unnecessarily hinder trade. In addition, trade is burdened by numerous non-tariff barriers to trade which could have been reduced by closer regulatory cooperation. Improved, reciprocal market access could have made a positive contribution to economic growth and jobs on both sides of the Atlantic. Moreover, TTIP could have served as a model for subsequent agreements.

The Failure of TTIP is Regrettable!

It is therefore extremely regrettable that under the current political circumstances an ambitious agreement such as TTIP with the United States is not possible.