TTIP – France and Germany Call to End Trade Talks with the US

BY ANTONIA COLIBASANU, Mauldin Economics

The Transatlantic Trade and Investment Partnership (TTIP) negotiations have failed. The TTIP is the trade agreement between the European Union (EU) and the United States. German Economic Affairs Minister Sigmar Gabriel and French Foreign Trade Minister Matthias Fekl have both called for an end to talks.

This failure confirms our prediction that the EU’s power is decaying. Moreover, this turn of events accents the division between Western and Eastern Europe.

The TTIP negotiations started in 2013. The trade deal was meant to both enhance the EU-US relationship and help the EU overcome its economic problems. The TTIP would increase economic integration.

The TTIP could have a huge impact on global trade too. Some see it as the EU’s most ambitious international trade project. But the integration of the EU itself is not complete. The sovereign debt crisis has increased anti-EU sentiment throughout the EU.

TTIP as a campaign issue

TTIP photo

Anti TTIP protes

Photo by horrapics

TTIP is now a hot topic. The German anti-TTIP camp staged a large protest on Sept. 17.

In France, National Front President Marine Le Pen has been the loudest opponent to the agreement. She called it an “atomic bomb” for the French economy. In April, she asked French President François Hollande to end the talks.

European political parties will need to discuss the TTIP in upcoming elections. Brexit taught them to listen more closely to public opinion.

And public opinion is against the TTIP. The lack of transparency in the negotiation process is a big concern. Limited protection for national producers and consumers is another. The anti-TTIP camp has claimed that the US would get more from the deal than the EU.

Critics don’t like that the talks are behind closed doors. They claim the lack of transparency is meant to hide the fact that the agreement will force the EU to give in to US rules. They have no proof. Yet they still argue that the EU Commission is not serving Europe’s interests. With Europe’s current socio-economic problems as the backdrop, protectionism is gaining ground. And this protectionism is further dividing the EU.

Politicians have changed their stance toward the EU. They are ignoring EU policies. They are challenging Brussels. All to gain a few more votes.

In any case, the talks are likely to have no results before the end of 2016. The summer months were slow. The US has elections soon. And European politicians are trying to ignore the TTIP. But that ploy won’t work.

European leaders pursue their own interests

Germany must be a leader in the EU. Its influence has been growing as the economic crisis continues. This became even clearer after the Brexit vote. Germany does not want to seem assertive, but it can no longer avoid it. It needs to keep Europe together for the sake of the German economy. So, it must lead.

France also wants to keep the EU together. It works closely with other member states on both economic and security issues. Germany and France feel responsible for the evolution of the EU.

But they must also make decisions based on their national interests. That’s why Germany, France, and Italy held a trilateral meeting prior to the post-Brexit summit with other members on Sept. 14.

 Western Europe vs. Eastern Europe

Calling for a halt on TTIP talks is supposed to signal that the EU doesn’t bend to every US whim. But most Eastern European governments in the EU support the TTIP. For them, the TTIP means enhanced transatlantic relations. And being able to sell to the US would be an economic boon. It also ensures strategic security and military relations.

Security risks are different for Western and Eastern Europe. The West is concerned with terrorism. The East sees Russia as its main security threat.

Some Eastern EU members already have partnerships with the US. The news on halting the talks likely will be disturbing for them. They understand the TTIP would not have created the economic ties needed to support strategic relations. Such treaties only facilitate relationships.

To the Eastern member states, the news highlights the disintegration of the EU. The East sees the West as no longer appreciating transatlantic ties… at least, not as much as it does. The East translates this into the potential for growing Russian influence in that region.

The TTIP negotiations were expected to last for a long time. The EU’s problems—which the TTIP was supposed to help solve—would make negotiations difficult.

Since Brexit, domestic concerns based on socio-economic problems have grown. Calls for protectionism have increased national governments’ power and weakened the EU’s.

The calls to halt the negotiations may or may not have an impact on the talks. They mean much more as an omen for the future of the EU. And the way the EU evolves will establish the relevance of the TTIP or any other international agreement that the EU signs.