TTIP…free trade or US domination?

In the general silence of the media, the EU and the USA are negotiating a key free trade agreement, the TTIP (Transatlantic Trade and Investment Partnership).

What is it exactly? That’s the main problem. We do not know much about it and, especially as EU citizens; we would like to know more. The EU often boasts about transparency, but here there seems to be little of it. Bruxelles has set up a website, but if we dig a bit into it, we do not find much information. Since July 2013 ten negotiation rounds have taken place; however, we know little about them. The media have barely covered the rounds, and the EU cannot expect millions of citizens to be familiar with its website. In addition, its content sounds vague. Let us take an example from the Tenth Round, and related to agriculture, which is of concern to EU (and of course US) farmers and their powerful lobbies:

The two sides had in depth discussions on the EU proposed wine text, the U.S. proposed spirits text, and other non-tariff issues. [See http://trade.ec.europa.eu/doclib/docs/2015/july/tradoc_153667.pdf, p.2].

This is all very interesting, but where is the ‘wine text’? What do we know of the ‘spirits text’? The EU website is incredibly poor in details; yet these negotiations have an impact on everyone’s life and jobs, and not only in Europe and the USA. Unfortunately, transparency is in short supply…

Interestingly, the EU and the USA are already big trade partners. Their exchanges amount to a third of the overall world trade. Tariff barriers between the Atlantic’s two sides are also low: on average, they are under 3%. Certainly, there are many non-tariff barriers (e.g. bureaucratic ‘red tape’, which is still a problem within the EU), but on the whole the rationale of the TTIP seems to be beyond purely commercial matters. Is there a more concealed purpose?

Yes, there is. To put it bluntly, the TTIP is an instrument by which the US can keep Europe as a ‘junior partner’ in industry, finance, and world politics in general; the way NATO has usually worked so far. There is a major power asymmetry between a great power, the USA, and a loose collection of weak states like the EU. In principle, a free trade area can bring benefits to all sides, provided they are on an equal footing. This is not happening in the NATO and will hardly happen in free trade zone.

Different studies have highlighted both benefits and disadvantages in terms of EU GDP and job creation. Yet little has been said on the TTIP’s political meaning (one rather isolated counter example: http://www.medelu.org/Alerte-Partenariat-transatlantique). The US sees it as a way to keep Europe tied in the (so far, economic) confrontation with China, which is rising to Number One position in the world economy. China has given birth to several new institutions, from the Silk Road Economic Belt to the Asian Infrastructure Investment Bank, and of course provides economic substance to the BRICS project. Washington has felt cornered and is now pushing for alternative projects. While in East Asia, Africa, and South America China’s presence is strong, Europe is the only continent where the USA can exercise some hegemony. In addition, including the EU is a way to detach it from Russia and the BRICS themselves. Wouldn’t a closer partnership between the EU and Russia make more sense? Wouldn’t the EU be better off by pursuing deeper relations with the BRICS? After all, history and geography would suggest stronger link between Europe, India, and China, which was at the other end of the ‘Old’ Silk Road.

On the EU’s side, the TTIP can be seen as a way to obtain some economic advantages and remain protected by the USA. Germany and Nordic countries might be tempted to think that they will gain, particularly in their niche high-tech industries. This is wrong, because they have little international leverage in political terms. Innovation requires strong state support, as the Silicon Valley’s history demonstrates. Some studies even show that Germany and Northern Europe would have bigger losses than Europe’s South (see http://ase.tufts.edu/gdae/Pubs/rp/Queries6_TTIP_Capaldo.pdf); has Angela Merkel reflected on this?

As to Germany, last days’ unpleasant events might have opened a Pandora box. The Volkswagen scandal is a bombshell, and will certainly affect US-EU negotiations. American drivers feel betrayed by what was branded as a particularly environment-friendly company (see http://www.theguardian.com/business/2015/sep/25/volkswagen-scandal-us-reputation-emissions), and the reputation of ‘made in Germany’ (which is arguably the jewel in the crown of ‘made in Europe’) is already horribly tarnished. The USA now has a strong blackmail power and Volkswagen’s woes have met some irony in Southern Europe (particularly in Greece of course!), whose countries have recurrently been accused of cheating and not respecting rules. Isn’t it a bit ironical that Tsipras won general elections in the worst week in years for Germany? Now Berlin should stop claiming the moral high ground and start working for Europe as a whole – if it is not too late. Scholars and practitioners have clearly demonstrated that US technology has long benefitted from a ‘small’ but effective state, which sets clear guidelines and rules; who will though support European technology? Where is a European state?

Furthermore, Europe differs from the USA in the way state and society (or, in a broader sense, community and individual) relate to each other. The TTIP risks further weakening what remains of any European social model. Although negotiations focus on specific types of services and industries, a knock-on effect on living standards might be inevitable, and weaker, smaller states will find it more difficult to defend European-style health services, education, and culture. The EU should think more than once before making a choice which might have lasting and painful effects. Eurasian, Asian, and African citizens are observing. They might not need Europe, while Europe, in many ways, needs them.