TTIP&TRADE in Action – June 8, 2016

German Chancellor Angela Merkel openly stated for the first time that if Britain decides to leave the European Union, its negotiating power in Europe will be significantly weakened.

In Focus

bremain v brexit
Photo Source:  Atlantic Council
This week the Atlantic Council’s Global Business & Economics Program published “To Brexit or to Bremain? That Is The Question,” by Nauro Campos, a professor of economics and finance at Brunel University London, and Fabrizio Coricelli, a professor of economics at the Paris School of Economics. They answer two fundamental questions important for the Brexit debate: Did EU membership significantly affect UK economic performance? And if so, how?, and analyze the negative ramifications of Brexit on trade, foreign direct investment, and finance. Overall, they find that the case for Brexit is weak, and that the UK will also lose influence in European politics if they leave the European Union.

Speeches & Announcements 

Merkel Hopes Britain Will Stay “Part and Parcel” of European Union

“Having led many negotiations with countries outside the EU in the past, we would never enter the same compromises and reach the same good outcomes with states that don’t shoulder the responsibilities and costs of the common market.”

German Chancellor Angela Merkel openly stated for the first time that if Britain elects to leave the European Union, its negotiating power in Europe will be significantly weakened. The fact that Merkel is breaking her neutral stance on Brexit shows the German government’s growing concerns over the consequences of Brexit on the European Union. It also reveals her skepticism of the Brits’ chances of negotiating separate trade agreements with foreign countries after leaving the European Union. (The Guardian)

Malmström Rallies Around TiSA 
“The recent revised offers and the work done so far represent real improvement, but we certainly still need more ambition. The EU is ready to go an additional mile but everyone needs to join if we want to achieve an agreement able to shape the global economy of the 21st century.”

European Trade Commissioner Cecilia Malmström chaired a meeting on the negotiations for the Trade in Services Agreement (TiSA) with 22 fellow ministers in Paris earlier last week. The participants discussed the recently revised trade offers, specifically financial services, maritime issues, and visas. Malmström expressed optimism that a TiSA agreement could be reached by the end of this year. (European Commission



Eurogroup President Calls for Britain to Consider European Interests  
Jeroen Dijsselbloem, Dutch Finance Minister and President of the Eurogroup, stated that “The UK shouldn’t just be leaning back and making sure the interests of the City are heard; they should be leaning forward and making sure we really need to get it right.” He wants the United Kingdom to take the lead in garnering TTIP support across Europe, and worries that a Brexit will disincentivize Europeans from extending the Single Market. (The Guardian
Brexit Could Prevent Brits from Living in Spain
Spanish Prime Minister Mariano Rajoy warned that British expats could forfeit their free movement rights and free healthcare if they voted to leave the European Union. This would negatively affect the 400,000 or so British citizens working in Spain. “I have no doubt whatsoever, as I have repeatedly stated, that it would be very negative if the United Kingdom left the European Union. Negative for everybody, for the United Kingdom, for Spain, and for the European Union,” Rajoy stated. (The Guardian)

TTIP Action Partners

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Recent Analysis

TTIP Bolsters European Trade Interests
Two economics professors at Spanish universities recently published an editorial in the newspaper El País, emphasizing that if EU member states did not collaborate to pass TTIP, European trade interests will remain sidelined, especially with the United States’ recent pivot to Asia. They further stated that TTIP is needed to champion the interests of small and medium European enterprises. The authors praise the recent yet belated efforts of the European Commission to increase transparency of the negotiations and criticize the parts of the public who claim that transparency of negotiations has not improved. –Original article in Spanish  (El País
Closing the Transatlantic Economic Gap?
In their June brief, the American Institute for Contemporary German Studies (AICGS) stated that the effect of populism in the United States and Europe will have a detrimental effect on market recovery and transatlantic cooperation. Although Europe’s large output gap, frequent disinflation, and implementation lag in structural adjustments made it weaker than the US economy, Europe is embarking on a gradual recovery, thanks to an accommodating monetary policy and stronger domestic demand. However, the European Central Bank and the EU Commission’s economic forecasts both remain bleak, with uneven growth across Europe. (AICGS
The Irony in Germans’ Anti-TTIP Stance
Marcel Fratzscher, a former head of International Policy Analysis at the European Central Bank, debunked populist claims that Germany’s economy would suffer under TTIP. As one of the European nations most open to and dependent on trade, Germany would be among the main beneficiaries of TTIP, since nearly half of its jobs are directly or indirectly related to exports, and an international trade agreement would help bolster German firms’ transatlantic competitiveness. (Project Syndicate)
Possible Scenarios for TTIP Agreement 
Iana Dreyer, editor-in-chief of, a news website dedicated to EU trade and investment policy, laid out three possible scenarios regarding TTIP passage. The first is that a deal on tariffs is reached in 2016, and other provisions are discussed at a later stage. The second is to create a ‘memorandum of understanding’ on key elements of an agreement in the second half of 2016, with a pledge to finalize negotiations at a later stage, but there is no guarantee of consensus on which are the “key issues.” The third option is that neither a pledge nor concrete talks occur in the future. (Euractiv

TransPacific Partnership – News & Analysis

Secretary of Commerce Penny Pritzker Delivers Pro-TPP Keynote 
The time for all of us to act is now. We need your help because the costs of delay are too high.

At the American Association of Exporters and Importers Annual Conference, Secretary Pritzker touted the TPP as a significant opportunity to continue the progress the United States has made in export volumes, which contributed more than one-quarter of American economic growth since the economic downturn. Secretary Pritzker pointed out that if TPP implementation is delayed by just one year, the United States will see an estimated one-time national loss of $94 billion. She also stated that the public’s scapegoating of free trade as the source of economic woes neglected the realities of globalization and automation. (Commerce Department)

UPS Executive Champions TPP
“The stakes are rising, the misinformation is growing and the clock is ticking. It’s time to push TPP over the finish line.”

In a speech at the “Global Supply Chain Summit” in Washington, UPS Senior Vice President of global engineering and sustainability Mark Wallace lauded TPP as the most extensive free-trade agreement in history. He warned business leaders not to make the erroneous assumption that “the logic that free-trade advocates see in the rightness of global trade will win the day,” and called on them to be visible and vocal in promoting TPP. (UPS)
Asian Geopolitics at Stake if TPP Fails
In an editorial for The New York Times, Roger Cohen stated that failure to pass TPP would not only prevent Vietnam from fully joining a rules-based international economy, it would also signal to China that it gets carte blanche over Asia-Pacific policy. Cohen urged Congress to resist populist ranting and ratify [TPP].” (The New York Times)

The Bigger Picture – Trade in Action

Conflict Over China’s Non-Market Economy Status
A bipartisan cohort of 18 US Senators has written a letter to European Trade Commissioner Cecilia Malmström requesting that the European Union not grant China “market status.” Their rationale was that the dominance of state-owned enterprises, in addition to frequent violations of intellectual property rights, tilts the playing field against American firms in China. On the other hand, the US-China Business Council, the premier US business interest group in China, warned that preventing China from obtaining market status would diminish the United States’ trustworthiness on future trade agreements. (Politico)
Brexit Would Cripple UK Auto Industry
German strategy consultancy Roland Berger reports that Brexit poses an existential threat to the United Kingdom’s auto industry, which is already mainly supported by foreign automakers. They predict that the United Kingdom will lose a significant amount of its investment from foreign car companies. They have also calculated that even if Britain negotiates a free trade deal with the European Union, it will lose a third of the auto industry and 80,000 jobs in the two years it would take to negotiate a United Kingdom-European Union deal. (Forbes)

Upcoming Events

TPP’s Transformative Digital Trade Rules: Keynote by Deputy United States Trade Representative Ambassador Robert Holleyman – June 10, hosted by American Enterprise Institute, in Washington – More Information
Rights of Women in the European Neighbourhood – June 13, hosted by the European Parliament’s FEMM Committee, in Brussels – More Information
TTIP By End of 2016? A Transatlantic Talk with US Under Secretary of Commerce for International Trade Stefan Selig – June 14, hosted by the German Marshall Fund of the United States, in Washington –More Information
Workshop on The Future of European Company Law – June 14, hosted by the European Parliament, in Brussels – More Information
Workshop on Strategic Growth on Blue Growth in the North Sea – June 20-21, hosted by the European Commission, in The Hague – More Information
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Image: Photo Source: AFP/Getty