German Minister Again Sounds TTIP’s Death Knell

30.08.2016 -

In several interviews over the past few days, German economics minister and vice chancellor, Sigmar Gabriel, stirred up troubled waters on both sides of the Atlantic again with fresh assertions that the long negotiated Transatlantic Trade and Investment Partnership with the US (TTIP) is dead.

This is not the first time Gabriel, who faces re-election this year, has forecast that the controversial pact would fail, though the timing of the latest round was somewhat unexpected. The project has failed, the minister who also chairs the German Social Democratic Party said – without being specific – because “Europeans are not willing to bow to US demands.” Despite 14 negotiation rounds in three years, no progress has been made on any of the proposed agreement’s 27 chapters, he added.

The EU’s chief negotiato, Ignacio Garcia Bercero, nevertheless, has continuously insisted that progress is being made. In the 14th negotiating round, which ended in mid-July, he pointed to consensual positions that special provisions be made for small- and medium-sized companies. By far the most controversial proposal remains the as yet unresolved Investor-to-State Dispute Settlement (ISDS) clause, which allows companies to sue national governments for interfering with their business. That the passage foresees private arbitration courts, operating outside the state judicial system, makes it all the more controversial.

The EU has attempted to assuage European fears about ISDS with alternative proposals, but no input from the US side has been publicly recorded. While many in Europe, in particular Germany, would be happy to see the agreement see a swift death, industry is supportive.

The German unions oppose both of the respective free-trade deals with the US and Canada, claiming they fails to protect workers. Public services union Verdi and 30 other organizations plan to stage a mass demonstration in Berlin on Sept. 17 against what they see as unfair privileges for foreign investors and the potential undermining of German labor rights.

Germany’s federal mechanical engineering association VDMA, stressed on Aug. 26 in reaction to Gabriel’s remarks, that “TTIP is more important than ever for European industry.” In the aftermath of the UK’s vote to leave the EU (Brexit,) settling the agrement would be “an important signal,” said the organization’s managing director, Thilo Brodtmann.

For the US, meanwhile, Britain’s impending EU exit seems to be making a trade deal with the EU less attractive, as it excludes what is one of the bloc’s strongest economies and the world’s fifth largest. Some 25% of US exports to Europe go to the UK. At the end of September, the EU is due to decide on how to proceed with the protracted talks. Experts foresee problems if the negotiations are not concluded this year, as a new US administration will take over in January 2017 and would probably need a year to pixk up the ball again.