Fear of TTIP, glob­al­i­sa­tion or a mid­dle class down­grade?

Financial Mirror (Cyprus) - - FRONT PAGE -

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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