Transatlantic Trade and Investment Partnership (TTIP) and Comprehensive Economic and Trade Agreement (CETA) Must Not Fail

By Hans-Jürgen Völz

On the occasion of the Stop TTIP demonstration with 250,000 protestors in Berlin on October 10, 2015, President Mario Ohoven of the Association of Small and Medium Enterprises (BVMW), Germany, declared: “TTIP and CETA must not fail. That would be a devastating signal for the future of Europe. It is absurd to say that TTIP and CETA will ruin the globalization winner Germany, as claimed by the organizers of the demonstration. For an export nation, such as Germany, free trade is and remains indispensable.”

From the perspective of the German small- and medium-sized companies (SMEs), both agreements provide significant growth opportunities and contribute to high standards in global trade. According to the European Commission and in contrast to popular belief, EU protection laws in the areas of human life and health, animal health and welfare, the environment and labor standards as well as consumer safety will be upheld in the TTIP trade agreement.

Additionally, both agreements provide Germany with significant growth opportunities and contribute to high standards in global trade, as 9 out of 10 German businesses are SMEs. Whoever denies this reality deliberately ignores facts, such as the positive export trend brought by the free trade agreement between the EU and South Korea ratified in 2011. The first half of 2015 has seen a 50% increase in German exports to South Korea in comparison to the export level before the agreement was reached. In general, SMEs will profit to a larger extent from intensified trade relations than big businesses since they can concentrate on research and development rather than costly bureaucratic procedures. Not only SMEs but also consumers will benefit from North Atlantic trade agreements for TTIP and CETA will likely increase the variety of products and services while at the same time reducing prices.

The most controversial passage of TTIP is the Investors-State Dispute Settlement procedures (ISDS). In its current form, ISDS procedures are superfluous because the judicial systems on both sides of the Atlantic are entirely independent and trustworthy. The good news is that the traditional ISDS is no longer a part of the EU negotiators’ position, partially due to the long-term lobbying of the BVMW. Instead, an independent bilateral court of arbitration is likely to be installed.

Our aim must be an SME-friendly, fair TTIP.

HJVDr. Hans-Jürgen Völz is Chief Economist of the Association of Small and Medium Enterprises (BVMW).