Top 3 Reasons Why Germany Should Support TTIP
German TTIP proponents are certain a free trade agreement with the US would benefit their country more than virtually all other OECD nations. By converging regulatory requirements and eliminating unnecessary barriers to trade, the country would see strong job creation and economic growth, expanded access to the US automobile market, and a strengthened transatlantic alliance. TTIP is just too promising for Germany to pass up.
1) Job Creation and Economic Growth
The Bertelsmann Stiftung, a German foundation "dedicated to serving the common good" based "on the conviction that competition and civic engagement are essential for social progress," lends credence to German industrial optimism in its TTIP analysis. According to its calculations, nearly 200,000 jobs would be created in Germany alone as a result of TTIP, good enough for third-highest among OECD nations; only the United States (roughly 1.1 million jobs) and the United Kingdom (400,000 jobs) would fare better.
Unsurprisingly, these jobs would overwhelmingly benefit the country's three most industrialized Bundesländer: North Rhine-Westphalia (21,000), Baden-Württemberg (about 20,000), and Bavaria (about 19,500). With their many multinational enterprises, highly skilled work forces, and strong investment in research and development, these states "would account for about 60 percent of the total 7.5 billion euro value creation effect that could be expected in the manufacturing industry." In these states, industries such as metal production and fabrication, electronics, and machine and motor vehicle construction would pass the TTIP boon along to their employees, resulting in a virtuous economic cycle.
All told, the agreement's value creation impact comes in at an impressive 11.3 billion euros, some 61 percent of which can be attributed to manufacturing. Manufacturing would also enjoy the lion's share of job creation, some 97,368 compared with the service industry's still-impressive 62,186. For those Germans in position to benefit from the job windfall likely to be created by TTIP, the future appears rosy indeed.
2) Expanded Access to US Automobile Market
It is hardly a secret that German auto manufacturers relish talk of harmonizing safety standards and facilitating trade between the US and EU. Eliminating non-tariff barriers to trade would result in lower production costs, job creation, and greater profits for what is easily Germany's most influential industry. A fully implemented TTIP, according to the Bertelsmann Foundation's calculations, would benefit German manufacturers significantly by creating
"around 85,000 new jobs. A reduction in trade costs would also impact areas of Germany's national economy that are not directly involved in exports, including the service sector, which could gain 75,000 of the anticipated new jobs. These could include the automobile trade or repair services, for example."
The American Chamber of Commerce's German office reports similarly impressive statistics in its analysis of TTIP. According to its findings, German car manufacturers "exported close to 625,000 vehicles to the USA [in 2012], thereby generating a surplus in the balance of trade of more than 14 billion Euros." If automotive suppliers and additional commercial vehicles are added to the equation, "this surplus amounts to over 21 billion euros." These statistics are all the more impressive considering German manufacturers control just nine percent of the market.
It is with this in mind that the Chamber of Commerce advocates TTIP so strongly. While exports to the US are indeed strong, "they are significantly hindered by tariff and non-tariff barriers to trade. TTIP would change this." Simply by removing export and import duties on both sides of the Atlantic, "the German automotive industry would save one billion Euros alone". Any further harmonization of standards reached as a result of TTIP "would result in substantial cost reductions for the automotive sector."
3) Strengthening the Transatlantic Alliance
Sigmar Gabriel, former leader of the German Social Democrats and current Federal Minister for Economic Affairs and Energy, perhaps summed up his country's opposition to TTIP best when he said it "would be hard to imagine agreeing to a free trade deal with the US if the US is infringing citizens' rights and privacy." Somewhat ironically, however, a free trade deal may be just the cure for the transatlantic ills afflicting US-German relations.
Jan Techau, director of Carnegie Europe, the European branch of the American think-tank the Carnegie Endowment for International Peace, substantiated this argument in his February interview with Deutsche Welle. In "Tripping over TTIP: Obstacles overshadow EU-US trade pact," author Emily Sherwin writes
"Techau is convinced of the potential of the EU-US TTIP. ‘First of all, it would bring us closer together in terms of shared objectives and a shared fate. When you share a stake in trade questions, in questions of standardization, in questions of quotas, in questions of how you position yourself vis-à-vis other trade powers - all of a sudden you start to act together politically.'"
Frank-Walter Steinmeier, Germany's federal minister for foreign affairs, made similar remarks when speaking at the Brookings Institute in Washington, DC in February. Emphasizing that "TTIP isn't just about trade and investment and perhaps jobs," Mr. Steinmeier posited instead that the free trade agreement is "about setting standards." The US and EU "need a fair set of rules" in order to maximize the "huge opportunity to shape the rules of the next phase of globalization together." Ideally, the deal will be "a landmark for free trade worldwide and not a retreat into bilateralism."
Reflecting the Berlin's coordinated approach to TTIP negotiations, Germany's ambassador to the United States, Peter Ammon, is quoted on the embassy's official website as saying TTIP
"'can also underpin the long lasting strategic partnership between Europe and America, which will continue to be the cornerstone of the global democratic order in the future.' Ambassador Ammon has made establishing such a transatlantic free-trade zone a top priority since taking up the office of German Ambassador in Washington nearly two years ago."
The arguments included in this article are among those most often brought forth by activisits, journalists, experts, and Atlantic Community members. They do not, however, represent every praise in favor of TTIP. If you have a different opinion or feel an important point has been left out, we encourage you to share it in the comments section below. As always, a strong debate is welcome.
- EU's Litmus Test in the Western Balkans
- It's the State of our Democracy, Stupid! Why Transatlantic Relations are in Trouble
- The Reverse Trump Effect: EU Populist Movements After Trump Took Office
- Smaller and Larger Nations: Concert of Big Powers or Fair Balance of Interests?
- The Trump-Merkel Summit: After the Storm, a Vital Trans-Atlantic Agenda