Regulaton & Policy
Trans-Atlantic Trade and Investment Partnership – Negotiations Hitting The Rocks?

The TTIP (Trans-Atlantic Trade and Investment Partnership) talks have failed, according to the German Economics Minister last week. Sigmar Gabriel, who is also Germany’s vice chancellor, said that the free trade deal forged between the EU and Canada was fairer for both sides. During a question-and-answer session in Berlin he said that “the negotiations with the United States have de facto failed, even though nobody is really admitting it”.

There have been 14 rounds of talks, and out of the 27 “chapters” or areas of interest that are being discussed, agreement has not been reached on a single one. Now it may be that all 27 are very close to agreement, but that seems unlikely. Christian Wigand, a spokesman for the European Commission, which is leading the TTIP negotiations, said that the institution had no comment or reaction at this time. But EU chief negotiator Ignacio Garcia Bercero said that news of TTIP’s demise was “greatly exaggerated”.

Now the Trade Minister of France, Matthias Fekl, says that “France is demanding the pure, simple and definitive halt of these negotiations”. He says that there is no political backing any longer in France to the deal.

Now this may all be clever tactics by Europe to persuade the US to back down in the negotiations, but it does not look good to TTIP, with the forces arrayed against seemingly getting stronger and more numerous. The aim was to complete it before the end November, during the US Presidency of Barack Obama. But that looks less and less likely. Then both of his most likely potential successors, Donald Trump and Hilary Clinton, have said that they are against it, as have various politicians and many pressure groups on both sides of the deal.

The mood generally seems to be turning against free trade, openness and internationalism, and moving inexorably towards protectionism, national interest and even nationalism. While no-one claims that globalisation has been good for everyone, or that international trade had been “fair” to all parties, the alternative could have severe economic repercussions.

Public procurement in Europe is reflecting this as well. While the Commission does still try to push for open procurement and encourages international cross-border bidding (for example, through promoting e-tendering and the European Single Procurement Document), many countries and contracting authorities are putting more energy into looking at how public expenditure can support local and national employment, business, innovation and so on.

They are all “good causes”, but tend to be essentially domestic in focus, not international. As we said way back in 2014 when the new procurement directives were published: “The drive to consider ‘social value’ in bids, the ability to use shorter time limits or even not to advertise contracts, will all make it easier for buyers to favour ‘local’ bids”.

Now many will say “and a good thing too” and support that approach. That is indeed why so many citizens don’t like the sound of TTIP. It is obvious why I might like to see a local firm winning work form my local council or hospital. It takes a lot of pretty complex intellectual explanation – which I might not even believe – to explain why it is better for the Italian, US or Japanese firm to win the work if indeed even if they appear to be the “best” choice to do it on pure value-for-money terms.

If free and open trade is going to win this battle, its proponents need to get much better at explaining why it is the right thing to do. At the moment, they seem to be losing the argument.