The Left must not derail an EU-US free trade agreement
Britain can scarcely afford to allow the European Left to derail an agreement with the United States that could bring such a wealth of benefits to those who need it most
This week marks the start of negotiations between the European Union and United States to reach agreement on the largest bilateral trade deal in history. When concluded, the EU-US Transatlantic Trade and Investment Partnership (TTIP) will see the removal of artificial trade barriers between two markets accounting for 30 percent of world trade and 20 percent of global foreign direct investment.
The Prime Minister and the British government are enthusiastic supporters of the TTIP, which would undoubtedly strengthen prospects for economic growth, boost employment and remove artificial trade barriers between us and our closest internationally ally.
When it comes to advocating on behalf of a deal, the facts and figures speak for themselves.
Twenty-six million people are currently unemployed across the European Union. Youth unemployment in Italy stands at 42 percent, rising to 58 percent in Greece. While the UK economy is starting to show green shoots of recovery, the economies of nine of the seventeen eurozone countries remain firmly in recession with negative growth outlooks predicted for the rest of 2013.
A Free Trade Agreement with the United States would not be a panacea for all of Europe's economic woes but it would go a considerable distance towards strengthening links with the world's largest economy.
A study compiled for the London-headquartered Centre for Economic Policy Research (CEPR) estimated that the benefits of the TTIP could amount to as much as €119 billion a year - equal to around £470 (€545) for a family of four each year. The CEPR further estimates that 80 percent of the financial benefits derived from the agreement would be delivered in terms of the elimination of bureaucracy– a factor which could only but reinforce the efforts the government is making to cut ‘red tape’ on a domestic level.
Amidst such poor economic circumstances and faced with overwhelming evidence about the benefits the TTIP could bring, it is astonishing to note that a coalition of Labour-aligned forces on an EU-level resorting to wrecking tactics to block its progress.
In an eleventh hour intervention shortly before negotiations were about to begin, French President François Hollande issued a statement calling for the suspension of the talks until the US provided further, unspecified “clarifications” with regards to its position on Edward Snowden’s as yet unproven PRISM surveillance allegations.
Even prior to Snowden’s allegations, the socialist government in Paris expressed its willingness to exercise its veto against any agreement that does not provide for the protection of "exception culturelle” – namely, the country’s declining film and music industry.
In the European Parliament, opposition to the agreement amongst Leftist parties is also growing.
Hannes Swoboda MEP, the leader of the Socialists and Democrats Group has been particularly bellicose in his use of language: “This means America is not bound by agreements,” he said when commenting on Snowden’s allegations, adding that, “if partners become targets, we may want to review our position on TTIP.”
In common with the cherry-picking approach to the agreement advocated by the French government, Swoboda has pledged that his group will seek to exclude the audio-visual sector from the agreement and introduce socialist measures related to labour standards and social affairs. If successfully adopted, such measures risk undermining the true principle of free trade and reciprocity, giving rise to a situation where the TTIP is little more than a finely-negotiated white elephant.
The Green Group, which has never been a fan of trans-Atlantic cooperation, has already called for the European Union to “cancel” existing deals regarding the sharing of air passenger records and SWIFT bank transfer payments. To renege on existing deals with the United States would be the clearest possible signal the European Union could give that it is more serious about pursuing petty vendettas against Washington DC than rebooting its own struggling economy.
Against a backdrop of growing hostility and distrust towards the United States, it is more important than ever that the British Conservatives and our allies across the European Union bang the drum for free trade and market liberalisation.
For the UK - Europe's largest and most dynamic services economy - the benefits of TTIP are crystal clear. Aside from the general savings it would deliver to consumers and the boost it would deliver to manufacturers, the TTIP would help to resolve outstanding controversies surrounding intellectual property concerns and strengthen our fast-growing pharmaceutical and bio-sciences sectors.
While Labour’s allies in Europe pontificate, prevaricate and pour scorn on the need to cooperate more closely with the US on trade and seek to mire the agreement in red-tape, thousands of British jobs and billions of pounds of investment hang in the balance.
We can’t afford to let the European Left let Europe get this wrong.
Daniel Hamilton is a Partner at Bell Pottinger LLP. He writes in a personal capacity.
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