On July 4, 1962, U.S. president John F. Kennedy declared “that the United States will be ready for a Declaration of Interdependence, that we will be prepared to discuss with a united Europe the ways and means of forming a concrete Atlantic partnership, a mutually beneficial partnership between the new union now emerging in Europe and the old American Union.” As negotiations for the Transatlantic Trade and Investment Partnership (TTIP) get underway, those words seem prescient. The TTIP has the potential to fulfill Kennedy’s vision.
This week, President Obama is traveling through Europe after attending a G-8 summit. The meeting’s agenda focused heavily on ways to restart economic growth—with trade as a central pillar of United States and European strategy. During the summit, the president announced the formal launch of transatlantic trade negotiations, the centerpiece of a fundamental rethink of the U.S.-European relationship that will prioritize economic ties.
The political ingredients for the TTIP are in place: a need for deficit-neutral economic stimulus to get the economy moving again, the support of a business community desperate to open new markets for exports and foreign investments, the approval of a labor community that recognizes that the United States and Europe have some of the world’s highest protections for workers, and a transatlantic relationship in need of a dynamic boost to confront the challenge posed by a new form of state capitalism best represented by China.
As an opening salvo to the launch of formal negotiations, the Bertelsmann Foundation and the Atlantic Council conducted a survey of key trade actors in the public, private and civil-society sectors to gauge their expectations of the approaching talks. We found broad support for the pact and a widespread belief that negotiations will be successful. Eighty-eight percent of those surveyed believe the United States and Europe will successfully come to an agreement. Fifty-five percent believe that an agreement can come into force by the end of 2016, approximating the timetable laid out by the U.S. administration and the European Commission.
But the study also contains a hint of warning for negotiators. Stakeholders are wary about the scope of a TTIP accord. Fifty-five percent believe the outcome will be only a moderate agreement, while 37 percent believe that it will be comprehensive, similar to the ambitious agreement envisaged by the United States and European leadership. The stakeholders note, correctly, that some of the most contentious issues, including policies on GMOs and convergence in the transatlantic regulatory-policy-making processes, are also among the most important at hand.
Some areas are already looking to be difficult. Politicians in some corners of France and the European Parliament are reluctant to include defense markets, government-procurement processes, and the protection of European cultural and linguistic exemptions for movies, music and other media. Initial statements from Congress, meanwhile, indicate that opening Europe to U.S. agriculture—especially the genetically modified foods that Europe has been hesitant to allow—must be an integral part of any treaty that they would accept.
In Washington, TTIP approval will require expedited pursuit of trade-promotion authority from Congress so that the administration can avoid a painstaking postnegotiation amendment process. More immediately, success will also require the administration to be actively engaged at the White House and cabinet levels. As TTIP negotiations move forward, leaders with both the requisite expertise in technical trade negotiation and the political acumen to navigate the halls of Congress and the European institutions in Brussels will be needed.
Negotiators should seek an agreement that is simultaneously ambitious and achievable. Agricultural issues and other traditional transatlantic disputes will remain important, but negotiators should focus on future-oriented growth sectors instead, since they represent vastly more important facets of the transatlantic economy. In fact, the traditional areas of dispute represent only around 2 percent of total transatlantic trade volume, according to the European Commission. Why should that stop progress on the remaining 98 percent?
The historical resonance of launching TTIP negotiations this summer could not be greater. This June coincides with the 50th anniversary of John F. Kennedy’s legendary 1963 Berlin speech, in which he expressed solidarity between Americans and Berliners as a powerful symbol of a universal aspiration for freedom.
Obama’s trip to the Europe and the launch of the TTIP are powerful signs of his administration’s second-term reprioritization of Europe. The trip also demonstrates that its well-publicized “pivot” to Asia does not mean America is abandoning its oldest and closest allies.
Aart De Geus is chairman and CEO of the Bertelsmann Foundation. Frederick Kempe is president and CEO of the Atlantic Council.This piece first appeared on The National Interest.