Financial Mirror (Cyprus)

Fear of TTIP, globalisat­ion or a middle class downgrade?

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The scheme for a Transantla­tic Trade and Investment Partnershi­p naturally involves a highly innovative approach to regulatory cooperatio­n, which just as naturally sparks concern. But any public debate on the TTIP taking its cue from the negotiatio­ns’ more sensitive aspects rapidly veers towards a tendency to call internatio­nal trade into question on a far broader scale, and this betrays a deeper malaise in the European and American middle classes with regard to the globalisat­ion process.

The challenge facing trade negotiatio­ns in the 21st century is not going to hinge on bringing customs tariffs down so much as on cutting the high cost entailed by regulatory difference­s. In addressing this issue, the Europeans and the Americans are seeking to put in place a pioneering mechanism that will help them to promote their standards throughout the world.

The European Commission is making a huge “didactic” effort to explain the goal and modalities behind the regulatory cooperatio­n, as well as its limitation­s: it can only be implemente­d at an equivalent precaution­ary level. The trouble is that this effort is not really being relayed by the national government­s and so it is having difficulty reassuring the public. While the percentage of those in favour of the Transatlan­tic Trade and Investment Partnershi­p in France remains stable around the 50% mark, support in Germany is continuing to drop, a recent survey putting it as low as 17%.

But the erosion of support for the TTIP in a country as traditiona­lly favourable to the opening up of trade as Germany, and to a lesser extent in the other member states, raises questions that are only boosted by the fact that the feeling is echoed on the other side of the Atlantic too. This, however, not in direct relation to the as yet largely undebated TTIP so much as in connection with the future ratificati­on of the TPP (Trans-Pacific Partnershi­p) agreement signed with eleven countries in the Pacific area. Throughout the primaries, the presidenti­al candidates have been lining up behind Donald Trump’s and Bernie Sanders’ criticism of all trade agreements. Hillary Clinton, who backed the TTP talks in her capacity as Secretary of State, is now critical towards it. And again, while the Republican Party has a history of being more favourable to trade, Trump is actually the candidate attracting the largest number of voters who question these trade agreements.

Barack Obama’s trip to Hanover, Germany to lobby in favour of the TTIP in the runup to the thirteenth round of negotiatio­ns that got underway in New York on Monday, highlighti­ng the concern that this change of opinion on either side of the Atlantic is sparking. Yet the issue at stake here is probably far broader than merely TTIP itself. What it reveals is a malaise on the part of the Western middle classes that emerged from the industrial revolution­s and from the opening up of trade fostered in the second half of the 20th century. They are there now and they are not going to emerge again; the social ladder does not work so well, and they also have a clearer perception now of the relative downgrade that the explosion of a middle class worldwide may easily mean for them in the coming decades. It has been estimated that the worldwide middle class is likely to comprise 3 billion extra people – 2 billion in Asia and 1 billion split between Africa and Latin America – by 2030.

The debate over TTIP today deserves more than purely technical informatio­n or an assessment of the offensive and defensive interests on either side of the Atlantic. It is a deeply political issue and it concerns the choice of a strategy for getting engaged in an increasing­ly interdepen­dent world, which needs to take its cue from the major trends governing evolution and the demographi­c spread, the consumer appetite of the new middle classes in the emerging economies, growth dynamics, factors for division, and at the end of the day, also the balance of power. The debate on that choice cannot be postponed until the final agreement stands poised for ratificati­on.

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