Transatlantic Trade And Investment Partnership: European Opposition To The TTIP Trade Pact Worries US

Whenever he goes on Twitter, David O’Sullivan can see opposition to the Transatlantic Trade and Investment Partnership growing. The European Union’s ambassador in Washington lamented to a group of lobbyists recently that a single tweet about the Europe-U.S. trade deal generally yields “one or two retweets, favorites from some people.” At the same time, he said, “I get about 10 people telling me, ‘You traitor to the European people; you're selling us out.’”

Twitter is hardly a harmonious place anyway, but the vitriol expressed there against the TTIP is a sign that the bitter debates about trade that have torn at American politics for the last 20 years have arrived in Europe. The Transatlantic Trade and Investment Partnership, the 3-year-old effort between the United States and the 28-nation European Union aims to ease barriers to commerce across an ocean that carries some of the world’s most valuable goods and services. So far, it has instead become an unmet challenge for European politicians and businesses, and a worrisome development for the White House.

Since the U.S. reached the North American Free Trade Agreement with Mexico and Canada in 1994, trade agreements have been a tough sell to the public, running up against charges that they foster the export of more jobs than goods, despite academic opinion that the case for free trade is strong. Not so in Europe, which quietly entered a series of trade deals with other countries, including Mexico, even as it expanded its own membership to the east.

Now, Europeans are having what U.S. Trade Representative Michael Froman calls Europe’s “NAFTA moment.” Froman, who wants to finish the TTIP before President Barack Obama leaves office in 2017, has privately and publicly urged European countries to get ahead of the critics. “This is really the first trade agreement that has become a public controversy in Europe, and I think the member states are still wrestling with the challenge they face in educating their publics,” Froman told Bloomberg News.

Robert Zoellick, a former U.S. trade representative and president of the World Bank, said the best the United States can hope for now is a plan to tackle the TTIP negotiation in earnest after the next U.S. president is elected in 2016. Zoellick said the Obama administration “certainly won’t get TTIP done.”

The agreement, if it came to fruition, would govern -- and perhaps stimulate -- an economic relationship without peer. The two-way trade in goods alone between the United States and the European Union hit $694 billion last year, and was but one facet of commerce that involves direct investment, exchange of services and short-term capital flows into every manner of stock and bond.

Resistance to TTIP has flummoxed European leaders such as O’Sullivan to the point that they can’t get over the ferocity of the opposition, let alone mount an effective counterargument.

Nowhere has the tide of opposition been stronger than in Germany, the EU’s largest economy, and export powerhouse. In September 2014, the proposed pact with the United States registered as something of an unknown, with 41 percent of Germans having no clear opinion on it, according to IfD Allensbach, a research group.

But the firm views of those who had heard of TTIP -- 60 percent -- hinted at the unfolding dynamic. A year later, when roughly a quarter million people gathered in Berlin to protest, opinion researchers were finding a solid majority against the agreement.

Feet on the street don’t necessarily doom the pact. European governments created the euro and bailed out Greece in the face of skeptical publics. “The German demonstrators are not from the political fringe, but German politics are not run through demonstrations,” said John Kornblum, a former U.S. ambassador to Germany.

Still, survey data and demonstrations fail to capture how TTIP criticism has become part and parcel of German pop culture -- even though the agreement doesn’t exist yet. Monsanto, the agribusiness giant, is regularly pilloried for allegedly plying Europeans with genetically monstrous creations. The pact, which can’t change European law unless Europeans agree to, would presumably hollow out privacy laws. Fracking, the controversial drilling process that’s led to an energy bonanza in the United States, would come to Europe with no debate, the critics allege.

The TTIP, said Pascal Lamy, a former European commissioner for trade, is “off to a bad start” because its supporters have misread their critics on the street. Opposition to trade deals has long come from industries and workers who wanted protection from foreign competition but the European public today frets about the impact on health, safety and the environment. Telling voters that exports support jobs won’t move the needle, he said.

“The promoters of TTIP didn’t realize they were not talking about the same thing as in the past,” Lamy said.

The German business lobby, notably the Federation of German Industry, which represents the commanding heights of the country’s economy such as Siemens, Daimler, Deutsche Bank and BASF, has responded by making the intellectual case that free trade is good for ordinary Germans. The federation’s head, Ulrich Grillo, tried a populist tack by riding a bike pulling a pro-TTIP sign through downtown Berlin.

To free-trading Americans who have watched the debate in the United States for the past two decades, European leaders’ response has either missed the point or has had no political impact.

German business and political leaders have embraced a “formula for gridlock” by marshaling streams of statistics on why free trade is good, missing the entire point of TTIP opponents, said Jackson Janes, director of the American Institute for Contemporary German Studies. The public “feels left out of the process and suspicious of EU decision-makers,” Janes said.

Fred Irwin, the longtime head of the American Chamber of Commerce and a former senior executive at Citigroup, said German and other European companies have to enter the fray by appealing directly to the public -- and especially their own employees -- in favor of TTIP. It’s a lesson that major American companies learned when they lobbied hard to pass trade deals with China, central America and other countries.

“Individual firms must speak out more on TTIP with their staff,” Irwin said. “German firms are not used to do this on issues which they feel are in the governmental sphere.”