What’s the problem with TTIP?
The panel discussion moderated by Elvire Fabry, Senior Research Fellow at the Jacques Delors Institute, focused on the application of the Transatlantic Trade and Investment Partnership (TTIP) and the different issues at stake from an economic and legal perspective. The first speaker, Pascal Lamy, former Director General of the WTO and President Emeritus at the Jacques Delors Institute, emphasised that TTIP is a new approach to reducing obstacles to trade opening; its purpose is to protect consumers with different standards, certifications, and requirements in order to administer a certain level of precaution. From his point of view, previous agreements such as the Comprehensive Economic and Trade Agreement (CETA, the EU-Canada so-called free-trade agreement) differ from TTIP. TTIP, he maintained, addresses new issues that increase the sensitivity of public opinion.
Pierre Defraigne, Executive Director Madariaga – College of Europe Foundation stressed three objections to TTIP. The first is that it is false to pretend that TTIP will contribute to solving the problem of job growth in Europe. He believes that there are more effective fields of policy that can be explored in order to solve this issue and that there is a need to strengthen governance in the eurozone. Furthermore, if the conditions of full employment of resources and effective competition are not fulfilled, the impact of trade liberalization will be lower. He underlined that if competition is not what it should be, productivity gains are captured by monopolistic structures. And this is precisely the characteristics of the new sectors which will be liberalised through TTIP.
He then underlined the disadvantages of Europe in comparison with the USA. in terms of size and market power. In his opinion,TTIP will aggravate inequalities between the two countries and European countries should not aggravate the situation through deals with oligopolistic firms located in the USA. His second point concerned the systemic character of TTIP. He recommended that we strengthen the multilateral system concerning financial, monetary, trade, and climate aspects. Finally, he focused on the geopolitical perspective and underlined the importance of Europe’s responsibility to build up its own model and to develop strategic autonomy to be on the same level as the USA. Thus, it would establish a balance in the economic, financial, technological, and military sectors between the two powers.
Sorin Moisă, Member of the European Parliament and INTA Committee member noted that what we need is a significant project of economic integration of the western world. However, this project can only make sense if there is a significant step forward between the EU and the USA, and also between western and developing countries. He underlined the importance of building a strong cooperation between the USA and Europe but also with the developing countries that are growing economically, militarily, and technologically at the expense of European countries. He emphasised the importance of the TTIP negotiations as an honest conversation with the USA to see what can be built in common in terms market and institutions.
Richard Baldwin, Professor of International Economics at The Graduate Institute of International and Development Studies, Geneva, laid out the foundations of TTIP. He emphasised an important change in trade relations. In the 1970s and the 1980s,goods crossed borders; today, we have a lot of factories crossing borders. There are international product networks in which economies are being integrated at a much deeper and more intimate level than ever before. This explains why we need discipline regarding intellectual property rights, services, and investments. As result, we have regional trade agreements all around the world as well as bilateral investment treaties.
According to Baldwin, TTIP is an evolution related to the expansion of trade and the need for multilateral treaties to regulate these transactions. He stated that globalisation is steering the people with a much finer degree of resolution and much less certainty. This globalisation is more sudden, more individual, and more uncontrollable. And, as a consequence, people feel uncertainty. However, he underlined that the cause of our insecurity is not TTIP but rather a mixture of technology, international competition, and international globalisation that cannot be stopped.
The final speaker, Joost Pauwelyn, Professor of International Law at The Graduate Institute of International and Development Studies, Geneva, focused on the application of the Investor-State Dispute Settlement (ISDS) within TTIP. He stressed that the substantive obligations subject to ISDS, written in eight pages and containing four limited obligations, are not controversial in terms of content but in terms of their enforcement. He expressed doubts about the efficiency of such a legal system as he believes that national courts and arbitration tribunals can solve any TTIP-related problems without the application of the ISDS. by Ana Andrijević