Fears over falling consumer protection standards in the event of a Transatlantic Trade and Investment Partnership (TTIP) are unfounded, a recent study by a Cologne institute has said, arguing that the EU-US trade deal has the potential to offer Germany significant economic and geopolitical opportunities. EURACTIV Germany reports.
The debate around TTIP has been surrounded by many evocative images – chlorine-washed chicken, hormone-treated meat, and genetically modified food.
Many observers believe TTIP’s ratification could mean weaker and lower food standards. The IW, which has close ties to employers’ associations, hopes the study will help demystify the issue.
“There is no scientific proof that chicken disinfected with chlorine can be hazardous to health,” said IW director Michael Hüther, indicating assessments conducted by the German Federal Institute for Risk Assessment (BfR).
Instead, Hüther has an “economically practical” recommendation. He said, “Dismantle trade barriers and, instead, label products clearly and comprehensively”. In this way consumers could freely choose – with or without chlorine, he added.
The IW study focuses on TTIP’s economic potential. German goods exports to the United States amounted to almost €90 billion in 2013, over 8% of the total exported goods.
Around 600,000 jobs are either directly or indirectly dependent on such exports to the US.
According to the IW study, TTIP could help secure these jobs – mainly in the automotive, engineering and pharmaceutical sectors – in the long-term and even improve the livelihoods of consumers and businesses.
“There is still a considerable amount of potential in trade and investment in the US,” Hüther explained. Although tariffs on German goods are already low, at 3%, the high volume of trade generates around €3.5 billion in tariffs, assuming a rate of 2.8%.
G3 with China and the US instead of the “kid’s table”
The IW also said TTIP is likely to have an impact on Europe’s geopolitical future. “For Europe and Germany, the central question is whether we will join the US and China in defining the world’s destiny, or whether we will sit at the kid’s table while the G2 dominates,” said Hüther.
But the study also sees room-for-improvement in the widely criticised agreement.
The agreement is currently overshadowed by a lack of transparency in the choice of judges and the procedure, the authors wrote, adding that a court of appeal is missing as well.
The IW writes said an investment agreement is necessary, but only with high standards and a dispute settlement procedure.
Critics are “stirring up unnecessary fear”
The IW’s director Hüther is sharply critical of TTIP’s critics.
Although they are right about the lack of transparency in TTIP negotiations, he said, the European Commission has reacted by publicising many documents and releasing more information – more than has been the case for any other trade agreement.
“Unfortunately these critics of globalisation sometimes over-exaggerate and stir up unnecessary fear. Often, there is a gaping divide between claims and reality,” Hüther said.
But opposition to TTIP is not only found among anti-globalisation activists.
Over the coming weekend, the Social Democratic Party (SPD) is expected to hold a party convention. Its left wing plans to reject a motion on TTIP, with which SPD leader Sigmar Gabriel is hoping to bring his party into line. The motion includes Gabriel’s call for a critical discussion process within the party’s ranks.
“I don’t think this motion will be able to command a majority backing,” said the spokesman for the SPD’s parliamentary left-wing in the Bundestag, Carsten Seling.
Seling is calling for improvements on investment protection and transparency of negotiations, as well as the question of standards in socio-political and data protection issues.
Gabriel is open to the agreement. But he does not want to adopt a final position before negotiations have concluded. The economic affairs minister recently installed a civil society advisory council in his ministry to make the negotiation mandate more transparent.
Negotiations between the US and the EU on the Transatlantic Trade and Investment Partnership (TTIP) began in July 2013.
Since the formation of a new, more Eurosceptic Parliament, opposition to the free-market agreement has become more intense.
If the treaty is signed, it will affect almost 40% of world GDP. The transatlantic market is already the most important in the world.
If successful, the deal could save companies millions of euro and create thousands of new jobs on both sides of the Atlantic. The average European household could save €545 per year and European GDP could increase by nearly 0.5%.
Brussels and Washington want to conclude the ambitious negotiations and seal the deal by the end of 2014.
- EURACTIV Germany: W-Studie zu TTIP: "Chlorhühnchen sind ungefährlich"
- EURACTIV France: Le TTIP ne menace pas les normes alimentaires européennes, selon un institut allemand