TTIPPING POINT Battle for Free Trade

2015 will be a pivotal year for the planned trade treaty between the European Union and United States.
Some worry Nürnberger sausages could come from Texas.

A five-page report last year from Germany’s Social Democratic Party, one of the governing parties, reads as if free trade would allow social dumping and unsafe food being imported from the United States into Europe.

At a critical time for the Transatlantic Trade and Investment Partnership, also known as TTIP, the party statement expresses the fears of a growing number of people in Germany.

Producers see their brands under threat from U.S. manufacturers, some of which falsely name their goods after European brands, such as Gruyère cheese, Feta Cheese and Parmesan, without producing in the region.

Under European law, for instance, the famous Nürnberger sausage can only be called “Nürnberger Rostbratwurst”  when actually produced in the German town of Nürnberg.

“We think the regional origin and its label is vital for us,” said Hermann Bühlbecker, who owns Lambertz that make famous gingerbread and cakes from Aachen, Nürnberg and Dresden and also exports its products to the United States. Such protection, he added, is also in the interest of American customers who are willing to pay for original products.

And as junior partner in Germany’s governing coalition, their opposition could ultimately scuttle the trade alliance, industry leaders worry.

Germany’s center-left party, SPD, has an important role in deciding the future of the planned trade treaty between the United States and European Union. Many party members have serious reservations and see themselves as the mouthpiece for free-trade skeptics. And as junior partner in Germany’s governing coalition, the party's opposition could ultimately scuttle the trade alliance, industry leaders worry.

Public fears about TTIP have been fanned by misinformation, said Anton Börner, the president of BGA, a German industry wholesale and export trade group.

Some people believe “European culture is close to being sold down the river,” Mr. Börner told Handelsblatt. “(But) neither labor laws nor the social standards of E.U. member states are being called into question by TTIP – nor are regulations regarding food safety and consumer protection on the table.”

The BGA president believes the free-trade treaty will especially help small and mid-sized companies in Germany.

“Easier access to American markets would make it possible for many of these firms to gain a footing in the United States for the first time,” Mr. Börner said. “They would benefit the most from adjustments to different norms and quality standards.”

The Association of German Chambers of Industry and Commerce supports TTIP for the same reasons.

So far, appeals from business leaders are having little effect, and critics in the SPD are once again speaking out against the treaty.

Carsten Sieling, spokesman for the left wing of the Social Democrats in Germany’s parliament, recently rejected provisions for an arbitration court to decide trade issues between the United States and European Union.

Without the SPD, there would certainly be no “yes” vote coming from Germany.

Proponents of TTIP argue that such maneuvers are unnecessarily throwing sand in the gears – and that there is no time to waste. The plan up to now was for trade treaty negotiations to take a decisive step forward in 2015. Observers say that it is now questionable.

The Social Democrats intend to take a definitive position this year. Before that, a controversial, inner-party debate must be conducted.

Party leader and Economics Minister Sigmar Gabriel has promised that party members will be given a chance to let their voices be heard on TTIP – at another meeting of the party steering committee, probably this summer, or at the party congress scheduled for the end of 2015.

Mr. Gabriel considers the trade partnership more of an opportunity than a risk. He argues that with TTIP, Europe and the United States might have their last chance to influence rules governing world trade. Successful treaty negotiations would also conform to the industry-friendly policy that Mr. Gabriel has decreed for his party.

If Mr. Gabriel wants to convince his party members this year, he still has a lot of work to do. A top-level party colleague says a majority of the party is “clearly not in favor of the treaty.” A joint roundtable discussion in February between the party and its parliamentary group is intended to shore up support for the trade agreement.

Even though the European Commission is negotiating the trans-Atlantic partnership, national parliaments could ultimately have the last word. And without the Social Democrats, there would certainly be no “yes” vote coming from Germany.

 

Klaus Stratmann moved from Handelsblatt in Düsseldorf to the Berlin office in 2005 to focus mainly on covering energy policies. To contact the author: stratmann@handelsblatt.com.

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