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Trade liberalisation and overall relationship

16 - Relations with the US on trade and investment

Grade: B+
Unity 3/5
Resources 4/5
Outcome 7/10
Total 14/20
Scorecard 2012: B- (11/20)
Scorecard 2013: B+ (15/20)
Scorecard 2014: A (18/20)

TTIP negotiations continued but progress was slower than expected and the treaty faces strong political headwinds.

The launch of TTIP negotiations in 2013 set an ambitious goal for transatlantic cooperation.In 2014, TTIP negotiations focused on standardisation of regulation and promoting investment, and talks appeared to be slower and more difficult than expected.

Political opposition to TTIP increased in 2014. In opinion polls in Europe, majorities tend to support a trade deal in general but oppose specific compromises that would be part of such a deal, including common regulatory standards for cars or food (the “chlorinated chicken” problem) and investor state dispute settlement mechanisms (ISDS). Public concern remains high in Austria and France and, to a lesser degree, in Germany, the Netherlands, and the UK. The necessary secrecy of the negotiations has allowed opposition to grow without an effective rebuttal. Economic stagnation strengthens populist parties that run against globalisation, even though a breakthrough on trade is crucial to increasing demand for Europe’s exports. The governments of Germany, Ireland, Italy, the Netherlands, Poland, Portugal, Sweden, and the UK have worked harder than others to promote this view in the interest of keeping the talks on track.

In the US, President Obama has dragged his feet in pushing for Trade Promotion Authority, which many believe is a necessary pre-condition for concluding negotiations. In his State of the Union address in January 2014, he mentioned it only in passing and it was put on the back burner for the rest of the year, partly because it was unpopular with his party’s base in a mid-term election year. The fate of TTIP is also linked to the Trans-Pacific Partnership (TPP), which is further advanced than TTIP but is also stuck. If TPP fails, TTIP will be harder to ratify. The victory of the generally more pro-trade Republican Party in the mid-term elections may help trade policy.

Ultimately, the challenge to TTIP is the same on both sides of the Atlantic – at a time of economic difficulty, mainstream politicians have found it difficult to make the case for globalisation.