Discussing TTIP's role in relation to EU integration, growth, transnational corporations, China's containment, the developing world, and the multilateral trade process with Reinhard Bütikofer.
This blog post first appeared on the Greens/EFA blog on TTIP on 7/4/2015.
Q1. In recent months, the communications around TTIP from the Commission and our political leaders has shifted from content and concrete benefits of the potential agreement to its wider geopolitical importance. Why do you think this is?
I always wondered, I must say, why the geopolitical dimension of TTIP was not getting more attention in Europe. After all, this perspective provided the arguments that finally convinced President Obama to decide in favour of opening the TTIP negotiations back in 2013. And former Trade Commissioner De Gucht, when he visited the US, did not hesitate to interpret TTIP as an economic containment strategy against China. So finally this discussion has surfaced in Europe also.
I suppose the overall political environment, which is characterised by the simultaneous emergence of several difficult geopolitical challenges to the EU, has prepared the ground. Is this spurious or a distraction? By no means. If, for instance, a transatlantic agreement could effectively help in promoting higher environmental and labour standards globally, wouldn't that be a worthy cause? I believe it would. But then, is TTIP going to be the kind of agreement that would deliver on such an expectation?
When President Obama argued in his last State of the Union address, how much better it is if "we" set globally-relevant standards and not China, India or others, I would say he has half a point. If "we", the environmentally and socially conscious segments of our societies in the US and in Europe could influence the standard-levels that our economies are going to promote, that would be good. But if "we" is the big corporations that promote their selfish interests at the expense of our societies, then invoking the "we" is delusional and would lead to a monumental deception; Monsanto and Big Tobacco or, to generalise, corporations are not people. Obama's argument makes sense only if we manage to put the people's interest first.
Q2. The main geopolitical argument for concluding a comprehensive deal is the idea that Europe is in decline both economically and politically, and that TTIP will be the panacea. At the same time, the EU remains one the world's largest economies, and our trade with the US already amounts to billions everyday. Is TTIP’s importance over-stated?
I'm not a disciple of European declinism. Europe has great inherent strengths, but we must mobilise them. That will only be possible by mobilising the people. Promoting a trade agreement against widespread popular interest, against outspoken public criticism and using secrecy as a tool to try get it by is certainly not going to be a successful strategy in mobilising the people, or if it is, it will be to mobilise them against the project.
Apart from that I do believe the seminal importance of TTIP is being overstated. And this has mostly been the effect of corporate interests like the US agricultural industry, that have been frustrated for so long in their ambition to force down Europeans' throats what they consider "good food for an American family" that they now want to saddle the TTIP course and ride on that horse victoriously over the finish line. In order to isolate themselves from adequate scrutiny and criticism, they're trying to overstate the relevancy of TTIP, hoping that anyone who would then continue with their criticism could be branded enemies of economic progress.
Don't get me wrong, I would see economic benefit in a transatlantic agreement once we managed to get rid of all the corporate lobbyists' Christmas tree agenda including their ISDS power-grab. At any rate, TTIP is not going to produce a winning growth strategy for Europe that has otherwise alluded our Union because of the prevailing austerity orientation.
Q3. Pierre Defraigne, former Head of Cabinet and Deputy Director-General at DG Trade has warned that TTIP could undermine the process of EU integration opening up “the possibility of a U.S. “divide and conquer” strategy in the heart of the legislative process of integration.” (1) While the Bertelmann’s study (2) also notes that intra-EU trade could decrease by up to 40% as a result of the deal. Could TTIP undo integration efforts here in Europe?
I think that would be overstating the case. Of course value chains are not static. But that is a reality regardless of TTIP. If we don't actively work on a cohesive industrial policy for the EU, the existing divisions will be exacerbated with or without enhanced US trade. They could also be deepened by China, the new kid on the block, which is already the second largest extra-European investor within the Union after the US.
Q4. On China, Defraigne has stated “TTIP does not provide the right answer either to EU growth or to China’s fair inclusion in the world economy” (3) but would instead further fragment the global economy and increase the risk of trade block confrontation. Are we at risk of doing more damage than good with other global players?
We must take Defraigne's points seriously. If TTIP becomes a building block for a West against the Rest or the West against China strategy, that would be stupid, futile and self-defeating. But on standardisation, for instance, I would assume that European industry even though they encounter problems increasingly with China within the ISO framework, would be smart enough not to ignore their own interests and therefore not to fall under the spell of the USTR's approach, that would want to force our side to fall in line with "US domiciled" standard development organisations (SDO).
Q5. Many proponents have claimed that TTIP will be good for developing nations, yet figures suggest that developing nations, including those in conflict regions in North Africa, could be hardest hit. (drop in real income per capita between 2.8 and 4.0%.). At the same time, such countries have also been locked out of the negotiation process. Is this another case of the “West knows best” for such nations?
When I first raised this issue in a conversation at USTR's office in May 2013, before TTIP even started, my questions were met with exasperation: "It's difficult enough already as it is". But at least in some cases the US now seems to be sharing more information with interested third parties than the EU is. I heard from sources in Turkey, and they do have a keen interest in the outcome of TTIP, that they get more information about the negotiations from Washington DC than from Brussels. If the EU negotiators want to uphold even the pretension of integrating TTIP negotiations in whatever way or form with a multilateral trade perspective they would certainly have to listen to our partners from the South, to take their concerns into account and to inform them about the process.
Q6. Commissioner Malmström has said that the EU remains committed to multilateral trade talks, like the Doha Round, yet TTIP is effectively bypassing this process. Does the proliferation of big bilateral deals like TTIP help or hinder the multilateral process?
Look, WTO's Doha Round was stalled before TTIP took off. And it would be unfair to seek the culprits for blockages in developing an adequate multilateral trade regime just in Washington or some of the European capitals. Other nations, in particular, some of the emerging economies are also playing hardball and it is not necessarily a given that the business interests that they defend are more justified than the business interests that our negotiators follow. It is also noteworthy that China, for instance, is promoting an Asian free trade concept that would, if I get it right, corroborate its own evolving Asia for Asians strategy, which is not really a synonym for multilateralism. I would still be in favour of holding on to the old Green ideal of a multilaterally agreed fair global trade order and it should certainly be one of our demands vis-a-vis TTIP and that this orientation is not getting lost completely.
Q7. Greens in the European Parliament are concerned that TTIP favours the activities of transnational corporate power, at the expense of ordinary people and the planet. In your view, can the current TTIP agenda address the global issues we face? In an ideal world, how would you reimagine a TTIP deal that would be good for all citizens and the planet?
Nice of you to remind me of the criticism that we are voicing in the European Parliament. So what can I say? I share the criticism. And in an ideal world we would not be negotiating TTIP. Just look at my previous answer. But this is not an ideal world and we have to deal with the issues at hand and it is still a long way towards convincing enough of our citizens of the dangerous ideas in the present TTIP negotiations so that they will join forces with us in preventing those dangers from becoming trade law.
(1) Choosing between Europe and the TTIP, Pierre Defraigne, College of Europe: http://ttip2015.eu/files/content/docs/28-nov-2013%20defraigne-choosing%20between%20ttip%20and%20europe.pdf
(2) TTIP study, Bertelmann Foundation: http://ttip2015.eu/blog-detail/blog/diversion%20of%20trade.html
(3) Departing from TTIP and going plurilateral Pierre Defraigne, College of Europe: http://ttip2015.eu/files/content/docs/Full%20documents/Departing_from_TTIP_and_going_plurilateral.pdf