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07/12/2016

Montaigne Institute warns the EU against abandoning TTIP

Trade & Society

Montaigne Institute warns the EU against abandoning TTIP

Pro-TTIP campaigners argue the deal would secure Europe's power to decide on future international standards.

[Global Justice Now/Flickr]

The liberal French think tank has told the EU it stands to lose more than just trade access if it fails to conclude TTIP, saying Europe’s place in the new geopolitical order is at stake. EurActiv France reports.

The Transatlantic Trade and Investment Partnership (TTIP), which is currently all but dead in the water, must not be allowed to disappear from the EU’s political agenda, the Montaigne Institute argued in a memo entitled Why to persevere with the transatlantic treaty.

In it, the think tank highlighted some of the issues underlying the trade alliance with the United States. “In this period of geopolitical instability, it would be extremely bad to send a message of failure and a lack of unity in the West,” said Iana Dreyer, one of the authors of the memo.

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According to the study, the trade deal’s geopolitical angle is often forgotten. Yet “a failure of the negotiations would contribute to the West’s economic decline and strain the unity of Europe, as well as of the Euro-American alliance” the text said.

“The Russians look at TTIP and they would be very happy to see it fail,” said Dreyer.

Political delay

But there is serious doubt over the future of TTIP. The conclusion of negotiations between the two partners, already severely delayed, has now been officially put back to after 2016.

“The electoral period that is beginning in the United States and in several important EU countries, notably France and Germany, is not favourable for the coninuation of negotiations,” the memo said.

EU leaders are likely to agree with this observation during trade discussions at this week’s European Council summit (20-21 October) in Brussels.

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“For the first time, the Council conclusions will not mention any commitment to concluding the TTIP negotiations before the end of the year,” a diplomatic source said.

“In reality, TTIP is already behind us,” the source added. “Nobody thinks the treaty can be concluded before the end of the [Obama] administration. We will have to see what we can do with the next one.”

Optimistic calendar

For the Montaigne Institute, the duration of the negotiations so far has been reasonable. “We are trying to explain that it is perfectly normal not to have finished the whole negotiation process within just two and a half years,” Dreyer said. “It takes time to negotiate such an ambitious agreement.”

As an example, the negotiations on the Trans-Pacific Partnership (TPP) between the United States and 12 Pacific countries (including Australia, New Zealand, Chili and Mexico) took seven years to complete. Together, the signatories to this trade deal, the biggest ever negotiated, represent 40% of global GDP, “and it is certainy the first trade agreement of this scale in which the EU is not involved,” said Dreyer.

International standards

Beside the question of geopolitics, TTIP is also an important tool enabling the US and the EU to keep a handle on international standards.

“The risk of no TTIP must also be stressed. Do we really want the economic and social standards of the 21st century to be set by the Asia-Pacific region under American or Chinese leadership, without Europe even having a place at the negotiating table?” the memo asked.

Treaty adoption procedure

The report also underlined the need for the EU to revise its adoption procedure for trade deals. The question of “mixed” trade deals “has become a real obstacle to the adoption of iternational agreements and runs the risk of paralysing the EU’s international action,” the report said.

Giving national and regional parliaments a say on European deals opens the door to complex discussions and tortuous ratification processes.

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The trade deal with Canada (CETA) is today in peril as a result of the EU’s adoption procedure. The Walloon parliament’s refusal to ratify threatens to sink the whole agreement, two years after negotiations were concluded.

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A revised legal procedure should clearly define which aspects of EU trade policy are an exclusive EU competence and which can be voted on at national and regional level.

“The European ratification procedure for TTIP will then have to be prepared in a more peaceful way than the current political process surrounding CETA,” the memo said.

“Once the legal question is answered, the political decision on the system of ratification will be easier to make,” said Dreyer. “I hope that the CETA episode will serve as a lesson.”

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