A protectionist US president and increased European suspicion of a Trump-led America undermine the prospects of a planned transatlantic free trade agreement between the European Union and the United States, according to EU analysts and politicians.
Trump has argued that international trade deals hurt US workers and the country’s competitiveness, but it is not clear to what extent Trump the president will resemble Trump the campaigner.
“If the world’s biggest economy follows a protectionist course, its effects will be felt around the world. We can only hope that his words are not followed by corresponding deeds,” said Thilo Brodtmann, head of Germany’s VDMA engineering association.
EU and US officials have for more than three years been negotiating the Transatlantic Trade and Investment Partnership (TTIP), with Brussels and Washington recognising it will not now be completed under Barack Obama’s term as earlier envisaged.
Negotiators on both sides of the Atlantic have clearly given up on the idea of concluding TTIP talks this year, despite progress achieved on the technical aspects of the negotiations.
“TTIP is history,” Bernd Lange, chair of the European Parliament’s Committee on International Trade, told online magazine vorwaerts.de when asked about the impact of Trump’s win on the negotiations.
Germany, where exporters have done well from globalisation and free trade, was more cautious. Asked at a news conference if TTIP was dead, Chancellor Angela Merkel’s spokesman Steffen Seibert said: “No.”
EU trade chief Cecilia Malmström said it was too early to assess the impact of Trump’s victory, but a break was inevitable whoever had won.
“How long will that break be? Impossible to say … There’s a lot of uncertainty,” she said.
Anthony Gardner, US ambassador to the EU, told Reuters TTIP remained important for economic and strategic reasons, recognising that the challenge was to convince more people that free trade is an opportunity, not a risk.
Malmström has previously said both sides should make as much progress as possible so that the work can be quickly picked up under the next president.
The European Commission and member states agreed on Friday (23 September) that it is “unlikely” to conclude the negotiations over the Transatlantic Trade and Investment Partnership (TTIP) with the US before the end of Barack Obama’s presidency.
However, it seems unlikely that trade will be high on Trump’s list of priorities or that TTIP will be top of his trade agenda.
Trump has instead talked about getting tough with China, withdrawing from the unfinalised 12-nation Trans-Pacific Partnership (TPP) and renegotiating or scrapping the North American Free Trade Agreement.
European Commission Vice President Jyrki Katainen noted that Trump had at least not singled out TTIP for criticism.
Katainen and Malmström presented yesterday (9 November) new draft legislation, amending the EU’s anti-dumping and anti-subsidy rules.
The European Commission is pushing for EU leaders to back stricter trade defence instruments against countries such as China at their summit in Brussels today (20 October).
Hosuk-Lee Makiyama, director of trade think-tank ECIPE, said US presidents typically took some time to forge trade policy and in the case of Obama and George W. Bush only really pushed trade policy deep into their second terms.
“TTIP is probably one of the last agenda items and I don’t think we will see a trade policy until year two or year three,” he said.
Trump will likely appoint a trade representative in March or April. His choice could be key, with possible appointees ranging from the protectionist Dan DiMicco, former CEO of steelmaker Nucor Corp, to libertarian PayPal founder Peter Thiel.
A further problem TTIP has faced is opposition from trade unions and environmental and other protest groups, particularly in Europe, who say TTIP undermines democracy by giving multinationals the power to dictate public policy.
Thousands of protesters marched through Brussels on Tuesday (20 September) to demand the European Union abandon planned transatlantic free trade deals they say will worsen labour conditions and allow big business to challenge governments.
Critics would have an added argument in their fight against TTIP, able to paint the deal as one with a bogeyman president.
“Opposition to TTIP is strong, particularly in the light of the results of the election last night,” Jeffrey Franks, director of the IMF’s Europe office, told a trade conference.
Speaking to EurActiv.com yesterday after the news of Trump’s victory, French centre-right MEP Philippe Juvin, an ally of former President Nicolas Sarkozy, said that for TTIP the game was over since several weeks anyway.
“Ourselves Republicans we were very critical, especially on the asymmetric opening of procurement markets between the US and Europe. So to resume negotiations from scratch is an idea that does not seem at all silly”, he said.
Juvin sought to play down fears about future EU-US relations, saying the United States and Europe have traded together for a very long time and it’s not because TTIP in its current form was not going to be adopted that they would suddenly stop doing it.
Asked if this means that TTIP should be restarted, he said that the Republicans’ position had been that TTIP needs to be reviewed.
“As it is, we consider it absolutely unacceptable. And if others have the same analysis – be they called Trump or other things – that comforts us,” he said.
“We do not want a transatlantic treaty that puts asymmetrical obligations. If Trump decides to end the negotiation that is anyway gone astray, it will not change much anyway, since in any case we would have renegotiated it,” Juvin concluded.
The Republicans hope to win the French presidential election at the run-off on 7 May 2017.