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.

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