Why transatlantic trade deal faces stiffening wind from Europe

A sudden chorus of criticism from European leaders seems likely to doom President Barack Obama’s hopes of signing a flagship transatlantic trade deal before the end of his term of office.

The European Commission, negotiating with Washington on behalf of the 28 EU members, appears unmoved by criticism of the Transatlantic Trade and Investment Partnership (TTIP). “The ball is rolling right now and the Commission is making steady progress,” spokeswoman Margaritis Schinas told journalists this week. “The Commission stands ready to close this deal by the end of the year.”

But that seems like wishful thinking to most observers. The two sides are still far from agreement on a host of issues, and European public opinion is turning against the deal over fears that it puts corporate interests above citizens’ rights.

Now, with elections looming, politicians around the continent are having second thoughts about TTIP, and some are calling for fresh talks on a new agreement that would meet their citizens’ concerns about consumer protections.

“There is no political support in Paris” for the current negotiations, French Secretary of State for Trade Matthias Fekl said Tuesday. “We need a clear and definitive halt so as to later restart discussions on a proper basis.”

Austrian Economy Minister Reinhold Mitterlehner echoed his call Wednesday, saying “one should stop the negotiations now and start the entire process afresh.” Earlier in the week the German Economy Minister Sigmar Gabriel had declared that the talks between the European Union and the US “have de facto failed, though nobody is really admitting it.”

With elections due over the next 12 months in the United States, France, and Germany, “the power of the antiglobalization, antitrade lobby is so great that it would be very hard for any politician to make the case for TTIP,” says Xenia Wickett, head of the US and Americas program at Chatham House, a London-based think tank.

“The likelihood of TTIP moving forward in any meaningful way in the next two years is very low,” Ms. Wickett adds.

'Proxy for corporate greed'

TTIP talks launched in 2013, designed to create the biggest ever free-trade deal, covering 800 million people. Negotiators are making an ambitious bid to go beyond tariffs and harmonize rules and regulations that can complicate commerce.

That has raised hackles in Europe, where TTIP critics are warning that negotiators are willing to sacrifice social, labor, and environmental concerns in a lowering of standards that will benefit only big business.

There is a fear that “anything done to boost trade will favor corporations and private markets, treating them better than customers,” explains Laura von Daniels, an analyst at the German Institute for International and Security Affairs in Berlin.

“TTIP is a proxy for corporate greed,” says Mark Dearn, a trade campaigner with the British antipoverty group War on Want. “But society is very geared up to fight it. It has generated the biggest social movement for a generation.”

Calls for a 'new initiative'

More than 150,000 people demonstrated in Berlin against TTIP last year; another mass demonstration is planned for later this month. EU opinion pollsters have found public support for the treaty is slipping, and stands now at 53 percent.

In the United States the unpopularity of trade deals is such that neither leading presidential candidate supports the Trans Pacific Partnership (TPP), an Asia-oriented deal similar to the TTIP.

In Europe the protests have prompted some officials to propose new negotiations that would assuage their voters’ concerns about environmental standards, food safety, and consumer rights.

“We have to fix the best possible rules governing energy, health, public services and culture,” Mr. Fekl, the French trade secretary, told RMC radio Tuesday. “This is not the direction the negotiations have taken and they should end now.”

The headwinds battering the TTIP are so strong, says Ms. Von Daniels, that “I am not sure reframing the talks would be enough. There would have to be a new initiative, and maybe France and Germany could be the drivers of a new approach to trade liberalization.”

TTIP not dead yet

Whether the US would be ready to countenance such a new approach is unclear. President Obama’s top trade negotiator, Mike Froman, is due in Brussels later this month to continue TTIP talks as normal with the European Commission.

But TTIP has a timetable problem in Washington; the TPP, a finished treaty, has to go through Congress first, and it is currently stuck in the legislative process.

Whether or not the transatlantic trade deal goes into the deep freeze, however, even its fiercest opponents do not think it is dead. “TTIP will keep coming back unless we do away with the political and economic system that produced it,” which is not likely in the short term, says War on Want’s Mr. Dearn.

After next year’s elections, “it all changes,” suggests Wickett. “Governments will have four or five years, which gives time to make a case” for a deal.

“I don’t think TTIP will die,” says Jean Fouré, an expert on international economics at CEPII, a research center in Paris. “It is not impossible that with new governments in the US, Germany, and France, the discussions could start again. But what form the negotiations might take, and whether they would end in a free trade agreement, I don’t know.”