United States & TTIP

Opinion: The pitfalls of pushing for TTIP in 2017

Iana Dreyer on why pursuing TTIP this year is not in the EU’s best interest.

It seems almost unbelievable. But it is true: the EU is still exploring whether it can revive transatlantic TTIP talks which were put on hold in late 2016 after three difficult years.


The German government has expressed the wish to revive TTIP talks when possible, but also top leaders in Brussels such as Jyrki Katainen and Federica Mogherini. The EU’s chief TTIP negotiator Ignacio Garcia Bercero is in Washington this week (20 March 2017) to sound out what is happening there.


There are three reasons why, for the EU, pursuing TTIP in 2017 and as long as Donald Trump is in power is most probably not a good idea.


Debasing TTIP’s objectives


Throughout the TTIP negotiations between 2013 and 2016 EU leaders have been defending the ambitious trade agreement on the grounds that it is a means to defend open markets, and set global rules for a liberal trading order, and close ranks in the face of such unpleasant state-capitalists as China and Russia. As was shown during the G20 meeting in Baden Baden on 18/19 March 2017: the current US administration is not interested in anything like that.


In the EU, TTIP is controversial enough. Debasing its political value won’t make it more palatable to critics, and might alienate constituents who backed TTIP in the first place.


The EU won’t get anything anyway


The EU’s top market access priorities in the United States include automotive and public procurement, and market access for its services, financial and others.


Is anyone still believing the US will be ready to open up its markets to EU providers under Donald Trump?


Policy professionals are still debating whether the policy is protectionist, nationalist or mercantilist. Yours truly likes to call the Navarro-Trump brand of it ‘paranoid mercantilism’.


Even if the most hardline versions of possible US protectionism aired by the Navarro types do not come to pass, such as slapping high import tariffs on Mexico or China – and they won’t – Europeans should be aware that there is an underlying Congress-backed, quasi bi partisan anti-openness consensus in many areas of policy of EU concern: public procurement is one of them, protecting the car industry is another. A more pro-US tax policy that includes a border adjustment tax could also be a third one.


Should the EU be begging for a TTIP and better market access in those areas the EU will only get humiliation and acrimony. Demands will only be nastier on the EU on easing is biotech regulations, liberalising its own services markets, and opening up beef markets, to mention the most important areas. That won’t fly in Europe, especially if these demands are made in the cowboy style seen so far.


Also one wonders whether EU leaders continue to be serious about enhancing regulatory cooperation with, say, an Environmental Protection Agency that is currently being downsized and hijacked by climate sceptics?


Let them come when they are ready


There are many reasons why TTIP has been an obsession in the EU and only an after-thought in the US under the Obama administration. One is the divergence of growth patterns between Europe and Asia. US business was not so much behind TTIP but rather behing the now defunct Transpacific Partnersh because the EU was perceived as a stagnant market. Which it is.


Signs are, though, that Eurozone growth is back on track. That momentum must be sustained, maintained and nurtured.


Once the US and especially Wall Street will have woken up from the mirage the massive cronyism that is emerging there, US firms might end up looking to the EU as an attractive proposition.


With Brexit and hostile political winds East and West, better for the EU now to focus on strengthening itself, deepen its domestic market, and for member states to continue their reforms. These reforms start paying off, with brisk growth in countries like Spain. In France, recent minimalist labour market and tax reforms are bearing fruit as France is no longer hemorrageing jobs in industry and the labour market is gradually improving. That should be an impetus for Paris to go further.


The onus of reform is not only on Italy and France. It will also be on complacent Germany. The Trump administration has a point: Germany must rebalance its domestic economy. That means investing in infrastructure and opening up the services sector.


The focus in the EU should also to get CETA properly ratified, as well as deals in the wait with Singapore and Vietnam. And to finalise these FTA negotiations with Japan – this year.


Should that happen, and a new European reform dynamic set in after the various national elections this year in France, Italy and Germany, you’ll see, the US might well come back knocking on European doors. If not, too bad. That might not be good for Europe. But having begged for TTIP in 2017 wouldn’t have helped the EU either.


Iana Dreyer is Founder & Editor of Borderlex.





Opinions expressed are the personal views of their author.

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