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Good-bye TTIP! But what now?

Henrik Böhme / sriAugust 29, 2016

Free trade negotiations between the European Union and the United States have "de facto failed," said Germany's Vice Chancellor Sigmar Gabriel. In doing so, he just wants to save his own skin, says DW's Henrik Böhme.

TTIP Protest Augsburg
Image: picture-alliance/dpa/Stefan Puchner

A broad alliance made up of church groups, NGOs and social welfare organizations has called for a mass demonstration in the German capital Berlin on September 17. The objects of their protest are the Transatlantic Trade and Investment Partnership (TTIP) - a free trade deal in the works between the EU and the US - and the Comprehensive Economic and Trade Agreement (CETA), a proposed trade agreement between Canada and the EU.

But the protest organizers can now take it easy and drop their plans. That's because TTIP is not going to become a reality, at least not in the foreseeable future.

One has to attribute the German economy minister's remarks regarding the failure of the trade talks to his party affiliation. Gabriel heads the Social Democrats (SPD), whose left wing faction in particular is stringently opposed to the trade pacts.

The politician had already made clear that he wants to see the CETA trade agreement come into force. So the minister now intends to shore up his support base within the party by burying the idea of TTIP. It's purely campaign rhetoric, clearly aimed at saving his own skin.

The valiant minister

Gabriel has always wanted to appear as the minister who fights for protecting jobs in Germany. To that end, he has recently looked the other way when it comes to a number of antitrust concerns, including the merger of the German supermarket chains Edeka and Kaisers-Tengelmann - a transaction currently being reviewed by the highest German court.

Boehme Henrik Kommentarbild App
DW's Henrik Böhme

But jobs no longer seem to be important for the economy minister of one of the leading exporters of the world, as he appeared to sound a death knell to a free trade deal with one of his country's most important trading partners.

The failure of the TTIP talks cannot be blamed solely on those fervently opposed to the deal - particularly in Germany - or on Sigmar Gabriel, who has pointed the finger at the Americans.

The German minister might even be right in his claim, given the rhetoric that is being employed in the current US presidential election campaign season.

While Donald Trump, the Republican Party presidential nominee, is an avowed opponent of free trade, his Democratic Party rival Hillary Clinton too has so far not made any pro-TTIP comments. Although Clinton is more committed to free flow of commerce, she still has to take into account the prevailing mood in the country, and particularly in her party given the kind of support enjoyed by free-trade critic Bernie Sanders.

The losers of globalization

The crux of the problem is that many Americans, regardless of whether they are followers of Sanders or Trump, view themselves as victims of globalization. And for German activists protesting against TTIP, the real issue is not the free trade deal itself, but rather to shape a more just and equitable form of globalization, which has produced both winners and losers.

Meanwhile, in many Western countries, the losers have been left to themselves, feeding support for both populism and protectionism. At the same time, some production has also returned to the industrialized nations as technological advances have allowed certain goods to be produced in these places at much cheaper prices than in low-wage countries.

This is a result of the increasing automation of industrial production processes. For instance, the sporting goods manufacturer Adidas no longer makes sneakers in Vietnam, but rather does it with the help of robots at a factory in Germany. Where does this lead?

What is the alternative?

The thought that the world is turning its back on free trade is scary, however. What would such a development mean for developing countries and emerging economies? It was Hillary Clinton who asked a member of her audience why precision machinery had to come from Germany, noting that the US had the best workers in the world.

TTIP's opponents may rejoice that the proposed agreement is dead. But what is the alternative? For Europe, which already finds itself amidst deep economic malaise, erecting new trade barriers would be the worst of all conceivable variants.

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