TTIP: Opportunity or Risk?

21 October 2015

The planned Transatlantic Trade and Investment Partnership (TTIP) between the EU and the USA is highly disputed in Germany. Andreas Povel, General Manager of the American Chamber of Commerce in Germany, criticized that the debate on TTIP in Germany is very emotional and that many opponents of the trade agreement do not seem to know the facts about the negotiation mandate of the European Commission. On 19 October, Povel informed about TTIP at the Center for Financial Studies and discussed the opportunities and risks of the trade agreement.

Europe and the US are already major trading partners, Povel said. Transatlantic trade amounts for 50% of global GDP. According to Povel, the German economy would particularly benefit from the planned trade agreement because the US is the most important non-European trading partner for Germany. Reduced duties and other trade barriers could increase export opportunities for Germany and create new jobs.

Povel rejected the claim that TTIP negotiations are undemocratic and that stakeholders have no possibilities to influence the negotiation process. He stressed that the European Commission is negotiating with the mandate of the EU member states and that national governments are informed before, during and after each round of negotiations. Besides, there are stakeholder meetings with associations and the civil society during each round of negotiations.

Critics of the trade agreement also fear that a parallel system of justice could be established with the Investor-State Dispute Settlement (ISDS) mechanism and that ISDS would undermine the rule of law. Also in Povel’s opinion the instruments for investment protection could be improved (e.g. more transparent proceedings and independent judges). But, at the same time, he stressed that European companies could benefit if rules for investor protection are enshrined in the trade agreement because this would make judicial proceedings in the US easier.

According to Povel, the concern that German standards for consumer protection as well as environmental and health standards could be reduced by TTIP is unfounded. Povel argued that the negotiation mandate of the European Commission states that the level of protection attained in European countries is not part of the negotiations with the US.