German Chancellor Angela Merkel has long been a booster of a proposed mega trade deal between the United States and European Union. But recently she poured cold water on the Transatlantic Trade and Investment Partnership, or TTIP.
"On the one hand we must see our job as developing an ambitious agreement," Merkel said on Wednesday at an electronics industry conference. "On the other hand we must not ratchet up expectations too high."
Later, at an event hosted by her political party, the Christian Democratic Union, the woman who presides over Europe's largest economy said the US and EU should conclude the TTIP as soon as possible. "We have to make progress quickly," she said.
The chancellor's mixed messages — urging haste while scaling back ambitions — illustrate how the TTIP is in danger of becoming a zombie pact, dead even as negotiators go through the motions of finalizing it, experts said.
The US Trade Representative is aiming to conclude TTIP negotiations before the end of the year, a spokesman said. But disputes over issues like the names of cheeses, digital privacy, and genetically modified food make it unlikely that negotiators could ink a deal before President Barack Obama's term ends in January.
"There is absolutely no way that they will be able to get through negotiations before Obama leaves the White House," said John Hilary, executive director of War on Want, a London-based anti-poverty group that is campaigning against TTIP.
"With every month that passes, they realize they were chasing rainbows to get it done quickly, and it becomes a massive political millstone around the neck of politicians in the US and Germany."
Even if trade representatives reach a deal in the next six months, criticism from Democratic and Republican presidential candidates in the US and widespread popular opposition to the deal in Europe suggests new leaders next year might either kill it or reopen talks, admitted Ed Gerwin, a TTIP supporter and senior fellow for trade at the Progressive Policy Institute.
"It's an uphill battle to complete TTIP before the end of the year," Gerwin said. "No matter who is the president, there will be a pause. If Mr. Trump is president, I would imagine it would be more than a pause."
American and European negotiators are in the weeds. Currently, the two sides can't agree on how to identify cheeses, Politico reported recently. European diplomats want to bar American cheesemakers from using names that refer to specific European locales, like Gouda, Parmesan or Asiago. Americans think Gouda produced in Wisconsin shouldn't require a new name that might turn off consumers.
The two sides are also bogged down in questions of privacy and data protection. Europe mandates that citizens can demand that tech companies erase their identities from the Internet under the 'right to be forgotten' whereas no such rules exist in the US. American tech companies like Facebook want to transfer data for storage to the US, whereas EU officials wants that data kept in Europe, said Lori Wallach, director of Public Citizen's Global Trade Watch.
Unlike with the Trans-Pacific Partnership that the US and the 11 other nations signed in February — and which could come up for a vote in Congress in November in the lame duck session after the presidential election — the US has not been able to steamroll Europe into accepting a deal, said Wallach. American corporations want to sell genetically modified food, for example, in Europe without the stigma of a label. But Europe won't budge.
"The TTP had Japan," Wallach said. "But the US is the 800-pound gorilla. There was nothing like a partnership of equals. In contrast, with the EU, it's really a negotiation between equals. These are partners who are like 'We really aren't going to stop labeling GMOs.'"
European negotiators aren't yielding because they know their constituents are suspicious of the TTIP gutting their laws.
Last month, German broadcaster ARD commissioned a poll that found that 70 percent of Germans felt the TTIP would be mostly disadvantageous, an increase from 55 percent in the previous year. British Labor Leader Jeremy Corbyn has vowed to scrap the trade deal if he becomes prime minister before it takes effect. French President François Hollande has said he could not support TTIP in its current form.
Many Germans don't see why they need to rewrite global trade rules. The country is already an exporting powerhouse. "The movement against TTIP in Germany is massive," said Hilary. "There has been more public debate and media coverage in Germany than any other country in Europe. It's quite a wealthy county. They have a lot to lose."
Opposition is growing in the US, too. On Monday, 450 environmental organizations wrote a public letter to Congress that claimed the TTIP would allow foreign oil companies to sue the US government in extrajudicial tribunals composed of corporate representatives.
The tribunals could potentially allow around 750 European energy companies to expand offshore drilling, dig more coal, and embark on other exploration despite American regulators' objections, or penalize those regulators for upholding US law if their decisions result in corporate losses. TransCanada, for instance, announced a $15 billion lawsuit against the US government early this year under a similar condition in the 1994 North American Free Trade Agreement, or NAFTA, for rejecting the Keystone pipeline.
"It is absolutely not consistent with our goals to limit warming to 1.5 degrees Celsius that was established in Paris" at an April UN conference, the director of the Sierra Club's trade program, Ilana Solomon, said.
Extrajudicial tribunals have been around for years — as the TransCanada case suggests – and they haven't yielded the corporate lawlessness that critics have predicted, said Gerwin.
He said the US and Europe needed to come to some kind of agreement for trade because both were experiencing slow job growth. Allowing more digital trade would certainly grow jobs, especially among small American businesses that Gerwin said could take advantage of the Internet if not for European barriers to their business.
"Small companies can investigate potential clients, they can figure out rules, they can do business without in many instances leaving the US. That is huge. A small business couldn't do that 30 years ago," he said. "That's why it's important to have provisions in these agreements that make sure commercial data can flow back and forth and countries can't impose these silly rules on digital trade, like 'If you want to sell into our country you need to put your servers in our country.'"
But it's precisely that logic that could lead American companies to sink the TTIP by pulling their support for it, Wallach countered.
"On both sides, there is a fairly undue amount of corporate influence," she said. "But on the US side, it's so overwhelming that there is dynamic where, if the companies cannot get what they want, which is almost exclusively deregulating stuff imposed by the EU, which has higher standards, then US corporations aren't interested."
Image via Wikimedia Commons.