Free-market evangelists say the U.S.-EU trade deal is essential to the future of transatlantic diplomacy. But dangerous economics could unravel centuries of partnership.
- By Hans KundnaniHans Kundnani is a Senior Transatlantic Fellow at the German Marshall Fund and the author of The Paradox of German Power.
In the last few years, almost everyone invested in Europe’s relationship with the United States, and vice versa, has become fixated on the free trade agreement known as TTIP. (For the uninitiated, that’s the Transatlantic Trade and Investment Partnership.) The deal, a counterpart to the now-concluded but not yet fully ratified Trans-Pacific Partnership (TPP) between the United States and 11 countries in the Asia-Pacific, aims to further integrate the European and U.S. economies, which together account for around half of the world’s GDP and nearly a third of world trade flows.
Supporters of the project in Germany, Britain, and the United States often give the impression that the West’s entire future — the very concept of the West — hangs on its success. In truth, TTIP is just as likely to cause transatlantic friction as demonstrate transatlantic unity, as illustrated by media coverage in Europe of the leak by Greenpeace of papers from the treaty negotiations. Amid the fallout from the leaks, TTIP is as likely to discredit the idea of the West as revitalize it.
Supporters of the project see it as a way to “renew and confirm” the transatlantic relationship, in the words of European Trade Commissioner Cecilia Malmström, the lead negotiator on the European side. Some, including former NATO Secretary-General Anders Fogh Rasmussen, have even referred to TTIP as an “Economic NATO”: a complement to the military alliance that guarantees the security of its members. Thus, Atlanticists — those who believe in the importance of the relationship between Europe and the United States — have largely bought the argument that TTIP is essential in order to maintain its relevance in the 21st century. Meanwhile, the treaty’s critics generally see the idea of “the West”as outdated, incoherent, or offensive.
Thus, to be pro-Western has, in recent years, increasingly come to mean favoring TTIP. It is possible, however, to be a pro-Western skeptic of TTIP — especially if one believes, as I do, that the idea of the West should be defined by the common values, not just the common interests, of Europe and the United States.
TTIP’s problems start with the hardly overwhelming case for its passage. In the early going, supporters claimed it would generate growth and jobs on both sides of the Atlantic. In 2013, the European Commission, for example, claimed that an ambitious deal could produce boost growth in Europe by €120 billion, and in the United States by €95 billion. But independent research done since then by various think tanks has concluded that the macroeconomic effects of TTIP would be lower than these claims suggested. Most serious studies, in fact, suggest it could increase the size of the European economy by between 0.1 and 0.5 percent of GDP over a 10-year period — in other words, by a modest to negligible degree.
Many of the other pro-TPP arguments do not apply to TTIP either. For example, Adam Posen has argued that TPP could strengthen the democratic and market-based development of Asian economies, but EU member states are already democracies with market economies, so the same argument does not extend to TTIP. Similarly, one cannot claim that TTIP will raise environmental or labor standards in Europe as TPP could in Asia — what Europeans fear, in fact, is that their high standards will be lowered by the treaty. One can also hardly claim that an investor-state dispute settlement (ISDS) mechanism — a system of tribunals to adjudicate on disputes between companies and states — is needed to protect U.S. companies from expropriation in Europe as one could argue in the case of Asia. (ISDS is one of the most controversial aspects of TTIP in Europe, where citizens worry that the tribunals lack transparency and force governments to make concessions to corporations.)
Moreover, while the upside of TTIP is questionable, there is a downside that should worry Atlanticists. Fears about TTIP, whether rational or irrational, are already fueling anti-Americanism in Europe — particularly in Germany, where there is a massive “Stop TTIP” movement. Critics say the so-called TTIP papers have confirmed their worst fears about genetically modified food and a lowering of consumer protection standards in Europe are likely to further strengthen opposition. In particular, the papers showed U.S. negotiators putting their European counterparts under pressure to ease restrictions on genetically modified food in exchange for a reduction in barriers to the export of European cars — hardly surprising, but alarming to Europeans who distrust GMOs. According to a new poll, 70 percent of Germans oppose TTIP.
If American and European negotiators reach the ambitious, comprehensive agreement they insist they want — which would include ISDS — this could be just the beginning of the transatlantic tensions to come. Both while the agreement is being ratified and once it kicks in, Europeans are likely to blame Americans for any lowering of consumer, health, and environmental standards, particularly in sensitive areas such as food safety. Americans, in turn, are likely to blame Europeans if they experience job losses in the automotive sector, and others, as a result of increased competition from Europe, regardless of the size of the overall boost to the economy on both sides of the Atlantic. In short, there is a real risk that TTIP will backfire and actually increase animosity between Europe and the United States.
The precedent for this is the European single currency — another endangered liberal project. It was meant to bring Europeans closer together by integrating their economies more deeply — just as TTIP is meant to bring Europe and the United States closer together by integrating their economies more deeply. But instead it has driven them apart.
Given the risk that it may prove impossible to pass TTIP, it is a mistake for its supporters to suggest it is essential to the future of the West. As the economic case for TTIP has failed to convince people, its supporters have increasingly sought to make a “strategic” case for it by invoking the concept of the West in this way. Although it is true that the transatlantic relationship needs to be reinvented, and that Europe and the United States must deepen their ties, a trade agreement is the wrong vehicle for this project.
The danger of forcing TTIP to carry this weight stems from the fact that it redefines the concept of the West in terms of the economic interests of the EU and the United States. At a time when power is shifting from west to east, Europe and the United States will increasingly need to cooperate with other like-minded states, especially “global swing states” like Brazil and India. In this context, the West cannot stand for the particular, exclusive economic interests of Europe and the United States. Rather, it must stand for universal, inclusive values — above all, democracy – and not simply be measured by prosperity.
Those who try to make a strategic case for TTIP often insist it is about values because it will allow the West to “set the rules for the 21st century.” It is not clear that other countries — those in Asia, for example — will really follow the rules set by Europe and the United States in TTIP (as opposed to the different rules in TPP). But even if they do, it will be only in limited areas like phytosanitary standards. This is surely not so much “revitalizing” the West, as trivializing it. The biggest threats to the West in the 21st century come from authoritarian and revisionist powers. It is difficult to see how TTIP will be of much help in responding to those threats (though TPP may be).
Supporters of TTIP should take a step back and think more carefully about the West, as both a geographic and a moral concept. In order to reach out to rising powers that are not part of the West in a geographic sense, Americans and Europeans need to emphasize the moral definition of the alliance and de-emphasize its geographic definition. But this is the exact opposite of what those who invoke the West in order to make the case for TTIP are doing. By identifying the West with the economic interests of Europe and the United States, they are as likely to discredit it as “revitalize” it.
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