Vladimir Putin Hates the TTIP
Which is exactly why Europe and America need to get it done.
President Barack Obama recently spent some quality time with leaders of Asian nations at the Asia-Pacific Economic Cooperation (APEC) summit in Beijing and again at the G20 Leaders summit, where he continued honing trade and diplomatic ties, and made another push for the long-delayed Trans-Pacific Partnership trade pact. He also held several tense sideline meetings with Russian President Vladimir Putin without any discernable reduction in the gridlock over Ukraine.
Flying under the international radar is one of the most potentially important agreements ever negotiated across the broad Atlantic: the Transatlantic Trade and Investment Partnership (TTIP), also known as the Transatlantic Free Trade Agreement (TAFTA). It is a big basket of agreed-upon rules and regulations that would make the United States and much of Europe a free trade zone, perhaps increasing overall trade by as much as 50 percent, according to the European Commission and the White House.
Guess what? Putin hates it.
It’s not hard to figure out why: it would more tightly bind Europe to the United States, thus hurting Russian leverage. The TTIP is a sensible agreement on economic grounds, broadly speaking. But it also holds enormous real value in the geopolitical sphere. The increased linkages between the United States and our European allies and partners will stand in direct opposition to Putin’s key strategy of driving a wedge between the United States and the EU as the central members of the transatlantic community.
But let’s back up: what are the key elements in the transatlantic relationship?
First are values and demographics. The ideas we cherish — democracy, liberty, freedom of speech, freedom of religion, freedom of assembly, the right to peaceful protest, gender and racial equality — came largely from Europe. The Enlightenment provided much of the basic DNA of our nation’s intellectual heritage, not to mention many waves of immigrants. To this day, numerous fundamental connections between the United States and Europe persist in our approaches to the civil rights, our judicial bodies, and the structures of our basic political systems. And by the way, it is worth remembering that Russia stood largely outside the process of the Enlightenment, with notable cultural distinctions resulting between Western European and Russian traditions.
Second is geography. For the United States, one of Europe’s key values is its strategic position on the edge of the Eurasian landmass. In my time as the NATO Supreme Allied Commander for global operations, people in the United States would occasionally chide me for supporting bases in Europe that were, in their view, "the outmoded bastions of the Cold War." But as we have seen over the past decade, these bases are anything but obsolete. Again and again, we have used bases in Europe for operations in Africa, the Levant, and Central Asia. Europe’s geographic position between the United States and many of our security interests and allies to the south and west of Europe remains critical.
Thirdly, the NATO alliance remains central to our military operations overseas. Afghanistan, Libya, the Balkans, Iraq, Syria, piracy, and cyber security are all areas in which our NATO allies have stood shoulder to shoulder with us. We will never find another pool of ready partners with the numbers, military capability, and willingness to deploy that we have in Europe. The Europeans spend $300 billion a year on defense, and have millions of men and women — virtually all of them volunteers — in their standing armies and reserves.
While Washington would prefer that European nations spent the full 2 percent of GDP on defense that they have pledged, the fact remains that they collectively constitute a highly capable force under the aegis of NATO. That fundamental security plank in the transatlantic bridge is not going anywhere, and the recent resurgence of the Russian Federation, with its invasion of Ukraine and annexation of Crimea, have only amplified the NATO’s standing as the gold standard of security membership.
Fourth is the economy, which brings us to the TTIP. Some $4.2 trillion of trade flows across the Atlantic between the United States and Europe. It is the largest trading relationship in the $60 trillion global economy, dwarfing any other trade relationship for the United States. Yet this commerce continues to operate today without the benefit of a free trade zone which would break down regulatory barriers and — according to the U.S. trade representative — add to the 13 million jobs already dependent on trade. The TTIP is a promising idea, and a draft agreement could be finalized by the end of the year.
Naturally, there are challenges. There is nervousness on both sides of the Atlantic about various elements of the potential agreement — in particular, worries from Europe about the competitiveness of the continent’s agriculture sector; the impact on energy production and the rise of fracking; protection of intellectual property; and the level of protection afforded to cultural assets. All of these outstanding areas of concern have received considerable attention from the negotiators, and that there is guarded optimism they will be resolved according to conversations with senior negotiators.
There will also be obstacles to ratification. In Europe, the European Parliament will need to approve it, and there are questions being raised about the need for national parliaments to be involved. In the United States, the Senate will have to ratify the treaty. And we would still need to address the status of Canada and Mexico who currently enjoy a free trade zone via the North American Free Trade Agreement with the United States, and presumably would be interested in TTIP inclusion. Likewise, in Europe: four nations outside of the EU would likewise be interested (Norway, Iceland, Switzerland, and tiny Liechtenstein).
So how does all this affect the geopolitics of the region — especially Russia’s fraught relationship with the United States, NATO, and the EU?
In addition to the economic benefits that would flow to both sides, there is clear geopolitical value. An economically energized Atlantic community with a shared free trade zone is far more likely to stand firm against Russian pressures (with natural gas closures, for example) designed to break up transatlantic solidarity. A European economy that enjoys a bounce from the benefits of free trade creates a stronger military partner for the United States, and provides more resources for defense spending. The agreement could help improve the Atlantic community’s ability to share energy resources like liquefied natural gas through free trade.
Indeed, a negotiated and eventually ratified TTIP would be a powerful signal to Putin’s Russia that Europe and the United States stand together in all dimensions — values, politics, security, and trade. And if Putin hates it, TTIP probably makes sense.