Maximizing TTIP Legitimacy
The expiration of the Trade Promotion Authority in the US in 2007 has empowered the US Congress in matters of trade talks. While this may prove a headache for President Obama, it ensures greater parliamentary scrutiny over TTIP. Both sides wish to conclude negotiations within a short period but a balance between important issues such as parliamentary scrutiny, transparency, and efficiency needs to be struck in order to ensure the legitimacy of the process.
It is no coincidence that the official launch of negotiations of a Transatlantic Trade and Investment Partnership (TTIP) falls into the aftermath of the global financial crisis and the eurozone debt crisis. The decade-old project gained momentum in 2011, in a context of slowing economic growth, rising unemployment and controversial debt-reduction measures on both sides of the Atlantic. According to the European Commission, the "TTIP would be the cheapest stimulus package imaginable." Such new ways to stimulate the economy are welcome.
But for both sides of the Atlantic to be able to capitalize on TTIP economically, the agreement needs sufficient political legitimacy. Negotiating TTIP requires dealing with two trade-offs. The first concerns parliamentary scrutiny and efficiency. In the US, an increasingly polarized US Congress let the Trade Promotion Authority – so-called fast-track – mechanism expire in 2007. It thereby regained its right to an article-by-article vote on trade agreements. Yet President Obama seems convinced and confident that he will be able to reinstall fast track.
EU Commissioner Karel de Gucht praises the EU for having a "permanent fast track" - given that the European Parliament has only gained the right to ratify trade agreements with a simple yes-or-no vote through the Treaty of Lisbon in 2009. Before that, the EU had an even faster procedure where merely the Council's consent was required to approve the final agreement and input-oriented legitimacy through the European Parliament was minimal. Momentous action such as the rejection of the Anti-Counterfeiting Trade Agreement in 2012 would not have been possible pre-Lisbon. Reinstating Trade Promotion Authority in the US would mean a level-playing field and increase the chances of finalizing TTIP within its highly optimistic negotiation timeframe. Yet it must be acknowledged that this would require a considerable sacrifice on the part of the US Congress. It would also send a negative signal for the importance of parliamentary legitimacy in 21st century trade policy.
Legitimacy goes hand in hand with transparency. When negotiating trade agreements, a similar trade-off exists between ensuring transparency and efficiency. It is a laudable first step that the European Commission has decided to publish some initial TTIP position papers. Heightened sensitivity concerning data protection issues following the NSA affair requires these steps toward more openness. The EU and the US must satisfy stakeholders' information needs. Where this wasn't the case in the past, trade agreements (e.g., the draft of the EU-India free trade agreement) have found their way onto WikiLeaks.
Adopting a more medium-term view, it is of equal importance that TTIP provides for output-oriented legitimacy. It does not suffice to simply enhance growth; job-creating growth that helps to alleviate unemployment on both sides of the Atlantic is what is needed. In this respect, the expected positive impact of TTIP on small and medium enterprises, as discussed in a recent atlantic-community.org Think Tank Round-up, is crucial because their role as important employment providers is well known. Moreover, consumers' concerns about food safety standards should not be over-ridden if civil society protests are to be avoided.
If the TTIP is negotiated without triggering internal as well as external opposition, it will strengthen transatlantic relations, EU actorness, as well as global trade. It can help the US and the EU regain economic ground and provide an incentive for the free trade champion UK not to leave the EU. Its novelty lies certainly in the fact that it involves the two biggest economies and demonstrates a, to date, unknown degree of depth. Having the EU and the US agree to such an agreement, would send a strong signal in favor of liberalizing global trade – in this way, the second-best bilateral option can be seen as furthering the multilateral goal. But this applies only if TTIP remains open and not exclusive, otherwise negative spill-over effects on countries such as Canada, Mexico and Turkey with which close trade relations exist, are to be expected. Therefore both the TTIP negotiation process as well as the negotiation outcomes must be inclusive and legitimate.
Katharina Ehrhart is a postgraduate student at Sciences Po Paris and the University of Bath. Her main research focus is EU economic governance, notably eurozone-crisis related change.
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