Transatlantic free trade in the balance | Business| Economy and finance news from a German perspective | DW | 11.11.2014
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Transatlantic free trade in the balance

The planned EU free trade agreements with the US and Canada have been clouded by months of uncertainty. Now a compromise appears to be in the making following a visit by the EU trade commissioner to Berlin.

New EU Trade Commissioner Cecilia Malmstrom hit the ground running as she traveled to Berlin for talks with Economy Minister Sigmar Gabriel. That may have something to do with the loud opposition in Europe's largest economy to the two free trade agreements with Canada (CETA) and the US (TTIP).

And that's certainly what the Swedish politician, who came to the job after four years as home affairs commissioner, seemed to imply after the meeting. But Gabriel's sense of irony was unmistakeable when he said he was pleased that the commissioner had chosen the "nicest topic" to start with.

Investment protection

In late September, Gabriel was still telling Germany's parliament he was against the two trade deals' controversial safeguards for investors. His Social Democrats backed his position at their party convention.

Now Gabriel is offering a compromise. He says he does not believe that "a complete abandonment of investment protection is a real option," but "some points could be improved."

Ultimately, he says, Germany could not break ranks, and must instead take the European context into account. And while the European Commission has received around 150,000 objections to the deal, it's far from clear it will be swayed by them.

Malmstrom emphasized the CETA agreement with Canada was a done deal. But she hinted there was a certain amount of leeway for adjustments that could address these objections. Minor clarifications still could be added to a forthcoming legal examination of the text, she said.

But overall CETA was "a very good deal," Malmstrom said. Critics should not lose sight of the "big picture" of Europe's economic crisis, she said, arguing the agreement was important for growth and jobs.

European standards will be upheld

Malmstrom promised a "new approach" and greater transparency to reduce people's concerns that Europe's high standards would not be weakened, especially in the area of social protections. Free trade would not mean compromises in environmental and consumer protection, she said.

Sigmar Gabriel (Photo: Rainer Jensen/dpa)

Sigmar Gabriel says the deal will add 20 billion euros to the EU economy

Gabriel also praised the agreements. Ultimately, he said, they would set worldwide standards. There would be no reduction in protections, no change to German or European law. He said he understood the concerns that had been expressed about transparency and investor-state arbitration, but there was a common interest in addressing these so that the talks would be a success.

A mixed bag

There was even uncertainty as to the question of whether the agreements are so-called mixed agreements, which would have to be submitted to the 28 national parliaments. The outgoing European Commission had rejected these, repeating tirelessly that it had been given a mandate to negotiate the deal for the EU as a whole. This was a sore point with Germany - and now Brussels seems to have given in to Berlin.

Cecilia Malmstrom (Photo: THIERRY CHARLIER/AFP/Getty Images)

Cecilia Malmstrom says that CETA could be tweaked to allay concerns

Malmstrom said TTIP was now a mixed agreement, and the status of CETA was currently being examined because the negotiations were largely complete. The German parliament could therefore have the last word on TTIP - and perhaps also CETA.

A few hours before the meeting, it was announced that TTIP opponents had filed a lawsuit against the European Commission before the European Court of Justice. The "Stop TTIP Coalition" objects to the Commission's decision not to hold a European citizens' initiative, a form of public discussion that would have further held up TTIP.

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