The TTIP endorses the rationale of Europe’s double failure
Pierre Defraigne, Executive Director of the Centre Madariaga-Collège d'Europe, Honorary Director of the European Commission,
for the Belgian daily La Libre Belgique
While new trade agreements continue to be signed, such as the free trade agreement between Australia and China, the Transatlantic Trade and Investment Agreement (TTIP) has been stalled since 2012. Its provisions and lack of transparency have never caused so much debate and reaction in public opinion than today.
On June 29, the members of the Committee on International Trade of the European Parliament paved the way for a plenary vote on the draft of the Parliament’s recommendations for the TTIP negotiators, and reintroduced the June plenary session amendments that had been referred back to the Committee on International Trade for consideration. Once again, the European Parliament is meeting the greatest difficulty in sustaining cohesion, and finding a half-way point between TTIP opposents and the proponents. Among the key points of disagreement, we note resolution of the disputes between investors and governments (ISDS), which would allow US transnational corporations to contest European laws in arbitration tribunals, if they feel their profits have been impacted.
In an opinion column published by the Belgian daily La Libre Belgique1, Pierre Defraigne, Executive Director of the Centre Madariago-Collège d’Europe, once again gives his viewpoint on an agreement he considers first and foremost as the sanctification of the vulnerability of Europe, which will only get minimal gains compared to the outlays that will have to be made. He also reminds us that the EU “has not yet reached adulthood as a geopolitical player: It has no common vision or means of action”. Faced to this strategic void, the European Union ultimately risks to squash not only its social and environmental blueprint, but its agricultural model as well.
momagri Editorial Board
The Transatlantic Trade and Investment Partnership (TTIP) endorses the rationale of Europe’s double failure: The collapse of economic growth due to the Eurozone stagnation and the failure regarding security due to the European strategic vacuum. Will the European Parliament be able to escape the grip of the Berlin alliance to stop the TTIP course by rejecting the arbitration clause favoring multinational corporations? On June 29 in Brussels at the Parliament’s INTA Committe––the international trade committee in charge of the EU common trade policy and its foreign economic affairs––this critical debate will oppose a coalition of beliefs to an intergovernmental rationale that has led Europe into a double stalemate.
First stalemate: The Eurozone deadlock. For the past eight years, the Eurozone has been stagnating at a growth level that generates high unemployment and rising disparities. The IMF indicates that the rising income gap leads to global demand contraction, with the rich consuming comparatively less than the poor. There you have the first vicious circle!
The trap of sovereign debt in Euros is another one. It closed on several nations around the Eurozone, which were forced into fiscal austerity to meet public funding requirements, and to lower wages to shore up their competitiveness and cut trade deficits. By doing so, debtor countries are also contributing to maintain a deflationary pressure in the Eurozone, and Europe is therefore subjected to a double deflationary spiral.
In addition, the various growth trajectories within the Eurozone threathen its unity. In order to meet economic growth, the European Union (EU) focuses on national policies for the competitiveness of supply, which is needed but not enough. Inhibited by over indebtedness, inequalities and differences, global demand is missing. Yet, economic growth progresses on two levels: supply and demand. Without pooling the debt and without a federal budget, stagnation will continue in the Eurozone.
Second stalemate: the EU strategic void. The EU has not yet reached alduthood as a geopolitical player: It has no common vision and no means of action. On the one hand, its foreign policy is nothing but an ad hoc diplomatic cooperation between major nations, and is paralyzed by a veto. On the other hand, the EU does not control its defense; its forces are scattered in NATO and currently subjected to a lethal budget cutback. Which are the consequences for any EU engagement in a changing world? It is against Russia that Europe best admits its inadequacy.
Vested interests and multiple errors
There, Europe has let America make two mistakes: The 1990s Big Bang, which transformed a bled dry national economy into a plutocracy in the hands of oligarchs, and the encirclement of post-Soviet Russia by NATO missiles, suggesting that it was Russia and not the USSR which was a threat for America and for Europe. The devilish Poutine came out of this cauldron. In front of him, Europe became dispersed: Germany played to its trade interests; France to its arms sales, and Central and Eastern European nations (CEECs) gave in to their understandable ancestral fears.
Europe should have built its energy unity to negotiate with its Russian supplier from a position of strength; It should have bolstered its defense within NATO to reassure the new member states, and implicate America without being subject to its superiority. It did nothing of the kind. Regarding Ukraine, it even negotiated an extensive free trade agreement––certainly a good idea––but not withholding an entry into the EU––a fateful mistake. The Ukrainian crisis stems from there: Poutine’s adventurism, the Western world vexations and the blunder of the EU paralyzed by a veto in its common foreign and security policy (CFSP). And now Europe believes there is nothing else to do but call America to the rescue. And pay the price.
“Uncle Sam” in a position of strength
As a result, we get to the expedential TTIP that seeks economic growth where it cannot be, and buys American protection at the outrageous price of the European model. With the TTIP, Europe meets the challenge, acting by the unanimity of its heads of states and governments who were petrified by the Ukraine crisis and feared Obama’s disinterest––due to his Asian axis––of seeming to apply for a transatlantic trade agreement all to America’s benefit.
On the one hand, US multinational corporations are clearly proving their technological leadership et getting the key to standardization in Europe through the double channel of the arbitration clause and the regulation cooperation entity; on the other hand, the TTIP–– described as an economic NATO by Hillary Clinton––supplements China’s system of strategic containment with the TransPacific Partnership (TPP). In return, Europe must be placated by a small increase in economic growth with uncertain consequences on employment, but its technology gap will be ascertained, and its social and environmental model put under pressure in the internal transatlantic market. Overall, the TTIP will severely restrain Europe’s democratic ability and its strategic autonomy. That is the true issue in the TTIP discussions.
Europe and its shortcomings
The TTIP is the price that the EU must pay for its shortcomings in matters of Eurozone governance and specific strategic ability. With the TTIP, and without seeking an alternative, the EU is resigned to double its stratetic reliance on America through NATO, and its energy, technology and financial reliance through the TTIP. But above all, the TTIP drives Europe into a bloc rationale against China.
We must break from the US multinationals’ hold on the European model and from Washington’s strategic aventurism. By saying no to the bilateral arbitration clause, the European Parliament’s INTA Committee would put a stop to the TTIP. This parliamentary victory over the intergovernmental rationale enacted by Germany as key Eurozone creditor would achieve a major step forward for a European “demos” in Strasbourg.
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