The “strategic” case for TTIP

As opposition to the Transatlantic Trade and Investment Partnership (TTIP) has increased, and as research has shown that the economic benefits are likely to be smaller than originally suggested, supporters of the deal have increasingly fallen back on the “strategic” case for an ambitious agreement with the United States – especially in the context of the debate since the annexation of Crimea in 2014 about a “return of geopolitics”. Supporters have argued that TTIP will revitalise the West and shift the focus of the alliance from security to trade and investment – thus, some have even spoken of it as an “economic NATO”. However, few have explained this “strategic” case at any length or in any detail. In particular, it is not clear what objectives it is meant to achieve or how it is meant to achieve them.

Supporters of the deal have increasingly fallen back on the “strategic” case for an ambitious agreement with the United States.

There are three elements of the “strategic” case for TTIP that I have heard supporters of the project make. The first is the simple argument that it would produce economic growth, which is itself “strategic”. It is true, of course, that economic power is the basis for other forms of power in international relations – military power, soft power, and so on. But this argument collapses into the more straightforward economic case for TTIP, which is now less convincing than it initially seemed. In 2013, for example, Trade Commissioner Karel De Gucht declared that an ambitious deal could produce “a growth boost for Europe in the region of €120 billion” that would translate into “millions of new jobs for our workers”. But most serious research on TTIP now concludes that the macroeconomic effect on the European Union as a whole would be more modest. Other ways of trying to create growth, therefore, could be better “strategy” in this sense.

The second element of the “strategic” case for TTIP is that it would send a “signal” to the rest of the world about transatlantic unity and resolve – in particular, to rising non-Western powers such as China. As one supporter of TTIP put it in a recent workshop at ECFR, “holding hands is a powerful thing!” At the moment, however, TTIP seems to be creating transatlantic friction rather than demonstrating transatlantic unity – particularly in Germany, where opposition to TTIP overlaps with anti-Americanism and anger about US policy on issues such as surveillance by the NSA and perceived US aggression towards Russia. As the negotiations continue, and especially if the EU is forced to make concessions, resentment about the US in Europe and in Germany in particular could increase further.

The third element of the “strategic” case for TTIP is the idea that it would be a way for the West to set the norms and standards of the twenty-first century. But even if TTIP is successful and is able to do this, it will only do so on standards and norms on trade and investment. In other words, it would only help in maintaining the existing trade order – which is only one part of the liberal international order. TTIP would not help the West deal with security challenges such as Chinese or Russian revisionism. It is also far from clear how exactly it could strengthen values such democracy, human rights, and the rule of the law, as supporters often claim it would. Nor would it even prevent Western economies from becoming more economically dependent on authoritarian states such as China. 

There could be a negative rather than positive strategic argument for TTIP: if Europe does not complete TTIP, it will be left behind.

To me, TTIP seems like a gamble. If the EU and the US can reach an ambitious deal, it could indeed send a powerful signal about the resilience of the West. But, both during the negotiations and beyond, it could also cause conflict between Europeans and Americans, just as “a single currency that was meant to bring Europeans together is instead driving them apart”, as Gideon Rachman put it in 2011. Even if a comprehensive deal is reached, it is not at all clear that it will give European economies the adrenaline shot that its supporters believe it would. But even if TTIP does enable the West to set norms, it will only be on trade and investment. This strikes me as not so much revitalising the West as reducing it to phytosanitary standards.

However, there is perhaps another, more limited version of the “strategic” case for TTIP that makes more sense, as my colleagues Sebastian Dullien, Adriana Garcia, and Josef Janning argue in a new policy brief. TTIP is taking place in a broader context of regional trade deals such as the Trans-Pacific Partnership (TPP), which includes twelve countries in the Asia-Pacific region (but so far excludes China). US officials have spent the last several years trying to persuade Europeans that the US is not pivoting away from Europe. But some now suggest that if TPP is completed and TTIP is not, the US will indeed be turning away from Europe. In other words, there could be a negative rather than positive strategic argument for TTIP: if Europe does not complete TTIP, it will be left behind. So even if some of the rhetoric that has been used is a bit over-the-top, there may yet be a “strategic” case for TTIP.