Fear of TTIP, globalisation, or a middle class downgrade?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Protests against the 'Trojan Horse' of TTIP. [greensefa/Flickr]

Beyond the technical questions of regulation and trade barriers, TTIP taps into middle class concerns about the nature of globalisation and demographic change, writes Elvire Fabry.

Elvire Fabry is a senior research fellow at the Jacques Delors Institute.

The scheme for a Transantlatic Trade and Investment Partnership involves a highly innovative approach to trade through regulatory cooperation, which of course  raises legitimate concerns. But any public debate on TTIP taking its cue from the negotiations’ more sensitive aspects rapidly veers towards a tendency to call international trade into question on a far broader scale, and this betrays a deeper malaise in the European and American middle classes with regard to the globalisation process.

The challenge facing trade negotiations in the 21st century is not going to hinge on bringing customs tariffs down so much as on cutting the high cost entailed by regulatory differences. In addressing this issue, the Europeans and the Americans are seeking to put in place a pioneering mechanism that will help them to promote their standards throughout the world. The European Commission is making a significant “didactic” effort to explain the goal and modalities behind the regulatory cooperation, as well as its limitations: it can only be implemented at an equivalent precautionary level. The trouble is that this effort is not really being relayed by the national governments and so it is having difficulty reassuring the public.  While the percentage of those in favour of TTIP in France remains stable around the 50% mark, support in Germany is continuing to drop, a recent survey putting it as low as 17%.

But the erosion of support for TTIP in a country as traditionally favourable to the opening up of trade as Germany, and to a lesser extent in the other member states, raises all the more questions as the feeling is echoed on the other side of the Atlantic. This, however, is not in direct relation to the as yet largely undebated TTIP so much as in connection with the future ratification of the TPP (Trans-Pacific Partnership) agreement signed with eleven countries in the Pacific area. Throughout the primaries, the presidential candidates have been lining up behind Donald Trump’s and Bernie Sanders’ criticism of all trade agreements. Hillary Clinton, who backed the TTP talks in her capacity as Secretary of State, is now critical towards it. And again, while the Republican Party has a history of being more favourable to trade, Trump is actually the candidate attracting the largest number of voters who question these trade agreements.

Barack Obama’s trip to Hanover, Germany,  in advocacy of  TTIP in the runup to the thirteenth round of negotiations which started in New York on 25 April, reveals the concerns that this change of opinion on either side of the Atlantic is raising. Yet the issue at stake here is probably far broader than merely TTIP itself. What it reveals is a malaise on the part of the Western middle classes that emerged from the industrial revolutions and from the opening up of trade fostered in the second half of the 20th century. These classes are not going to emerge again; the social ladder does not work so well anymore, and now they also have a clearer perception of the relative downgrade that the explosion of a global middle class may easily mean for them in the coming decades. It has been estimated that the worldwide middle class is likely to comprise 3 billion extra people – 2 billion in Asia and 1 billion split between Africa and Latin America – by 2030.

The debate over TTIP today deserves more than purely technical information or an assessment of the offensive and defensive interests on either side of the Atlantic. It is a deeply political issue and it concerns the choice of a strategy for getting engaged in an increasingly interdependent world, which needs to take into account the major trends and spread of demography, the consumer appetite of the new middle classes in the emerging economies, growth dynamics, disruptive factors, and at the end of the day, the balance of power. This broader debate cannot be postponed until the final agreement stands poised for ratification.

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