TTIP GRIDLOCK Germans Question Trade Pact's Future

With the latest round of TTIP negotiations ending on Friday with no breakthrough, a former German high court judge has raised constitutional objections to the E.U.-U.S. trade deal. Politicians in the country accuse the United States of undermining progress toward an agreement by refusing to make concessions.
Many Europeans oppose the trade pact and have hit the streets to protest over the past couple of years.

Amid a growing chorus of dissent against TTIP, the controversial free trade treaty between Europe and the United States, Hans-Jürgen Papier, the former head of Germany's Constitutional Court, has now raised constitutional objections to the negotiations.

“For constitutional reasons, taking a pause from TTIP is recommended,” Mr. Papier told Handelsblatt. “The public has the feeling that the far-reaching law is being made without parliament.”

Mr. Papier called on Brussels to rethink the goals, the form and the process through which the Transatlantic Trade and Investment Partnership, or TTIP, has been negotiated.

“Brussels should reconsider whether or not the E.U. has taken on too much,” Mr. Papier said.

Following the end of the 14th round of TTIP talks on Friday with no breakthrough, American and European negotiators may have no choice but to take break.

During the week, both sides presented their suggestions for harmonizing regulations in seven industrial sectors. But according to Handelsblatt's sources, little progress was made during the talks.

For constitutional reasons, taking a pause from TTIP is recommended. Hans-Jürgen Papier,, Former Head of the Constitutional Court

"We still have a lot of tough nuts to crack," a source close to the negotiations told Handelsblatt. "The crucial question is whether or not we can reduce the number of questions to just a few by the fall."

German Economics Minister Sigmar Gabriel recently warned the United States that it must accept higher environmental, consumer and labor standards if the negotiations are to succeed.

"After three years of negotiations, we have to finally get some results or at least take honest stock of where the negotiations stand," he told Handelsblatt in an interview earlier this week. Mr. Gabriel is the second most senior German government officials involved in TTIP issues after Chancellor Angela Merkel.

European Commission President Jean-Claude Juncker has said negotiators need to work out the "cornerstones" of a deal before U.S. President Barack Obama leaves office in January.

The commission has devised a three-step road map to achieve a draft agreement by that deadline. First, U.S. and E.U. experts will try to clear up technical questions over the summer.

Next, E.U. Trade Commissioner Cecilia Malmström and her U.S. counterpart Michael Froman will take up whatever issues the experts aren't able to resolve.

Finally, Mr. Obama and Mr. Juncker will personally tackle the most controversial points such as the investor-state dispute settlement courts.

Important national European leaders including Ms. Merkel and French President Francois Hollande will also be involved in this final stage.

"I hope that the negotiations can advance so far by the fall that those politically responsible on the U.S. and European sides solve the most difficult questions," Matthias Wissmann, president of the German Association of the Automotive Industry, told Handelsblatt. "What concerns me is that many Europeans appear to reject free trade. Apparently many people don't recognize the foundation of their own material prosperity anymore."

There has been strong grass roots mobilization against TTIP in Germany over an alleged lack of transparency and concerns that a deal would weaken national regulations.

The domestic opposition in Germany has become so strong that some members of the center-left Social Democrats have already written TTIP off for dead.

Former constitutional judge Hans-Jürgen Papier has called for a pause in the TTIP negotiations.

 

 

"From my perspective, TTIP is dead; it won't come up before or after the next federal elections," Achim Post, the most influential parliamentarian from Germany's largest state North-Rhine Westphalia, told the daily Frankfurter Allgemeine Zeitung.

Green Party parliamentarians, who have long been critical of the trade pact, have become even more vocal. “We keep hearing that there are only technical details that need to be resolved,” said Green Party parliamentarian Renate Künast, a former federal environment minister. “But some of the central issues don’t have any solutions.”

Ms. Künast, who currently chairs the consumer rights committee in parliament, cited as one example the lack of progress on the issue of “precaution of principle.”

Under this principle, public authorities can adopt restrictive measures to counter potential risks, especially to the environment or human health. Many have applied the principle across the European Union to justify bans on hormone-treated beef and the cultivation of genetically modified organisms, or GMOs, even in the absence of irrefutable scientific evidence of the dangers posed by these products.

Mr. Juncker and Mr. Gabriel have blamed the slow progress on the United States, which rejected a transatlantic investment court as an alternative to private investor-state dispute settlement courts.

There are concerns in Europe that multinational corporations will use private settlement courts to sue governments and weaken regulations passed by national parliaments.

Washington's unwillingness to open its public procurement process to competition from Europe has been another key sticking point. At the same time, the United States wants to open European markets to its service sector and fears surrounding the introduction of genetically modified agricultural products have led to a backlash in Europe.

Brussels is also facing a populist backlash. Britain's decision to leave the European Union has underscored the dissatisfaction with a lack of democracy at the E.U. level.

“The impact of Brexit is a clear call for more transparency,” Ms. Künast said. “Don’t cheat us.”

Another prickly issue is who in Europe ultimately decides whether TTIP will be ratified. Mr. Juncker had originally argued that a planned trade pact with Canada  was a purely European matter and national parliaments wouldn’t be consulted in ratifying a final deal.

Directly on the heels of the British referendum, however, Brussels conceded that E.U. national governments should have a say in green-lighting the planned trade pact between Canada and the European Union, and deemed the deal a “mixed agreement,” meaning that national legislatures gain the right to vote on it.

The Comprehensive Economic and Trade Agreement, or CETA, is viewed as a blueprint for TTIP, and the German government, which has long been at loggerheads with the Commission over the ratification issue, would like to see the mixed agreement principle applied to both trade pacts.

Officials in Brussels are now seeking to counter the impression that its classification of CETA as a mixed agreement would mean that the same applies to TTIP, arguing that each agreement should be examined individually.

"Unpopular content can’t be slipped past parliament,” Mr. Papier said. "That’s reprehensible in terms of democratic theory and is an arrogant and cynical way of proceeding."

The opposition to TTIP and Britain's decision to leave the European Union could ultimately move the United States to make some concessions to save the negotiations.

The clock is ticking in the United States. Skepticism is mounting about ability to push TTIP through Congress before its biggest supporter, President Barack Obama, leaves office.

Both the presumptive Republican and Democrat presidential candidates, Donald Trump and Hillary Clinton, have bluntly said no to global trade pacts like TTIP.

 

Heike Anger, Dana Heide, Till Hoppe and Moritz Koch with Handelsblatt and John Blau with Handelsblatt Global Edition collaborated on this story from Berlin, Brussels and Washington. To contact the authors: [email protected], [email protected], [email protected], [email protected] and [email protected]