The Impossible Promise

The free trade agreement with the U.S. is not supposed to weaken consumer protection in any way, assure the EU Commission and chancellor. That would make the Transatlantic Trade and Investment Partnership impossible.

For months, Chancellor Angela Merkel has been hammering one sentence into microphones of the world again and again: “Part of the facts of the free trade agreement with the U.S. is that no standard that exists today in the European Union will be lowered.” In the best case, the message will reach every last German living room: Don’t worry!

Just how impossible the sentence appears in the meantime is revealed by the secret negotiation documents published by the environmental organization Greenpeace. But it has long been clear: In order for Merkel’s mantra to be true, two consumer protection and justice systems that could hardly be more different would need to be aligned. The most suspenseful question hanging above the TTIP is: What can even be harmonized, or to be precise, what is negotiable? If all areas of transatlantic trade would really be lying on the TTIP table and at the same time no EU standard would really be lowered, the Americans would have to completely give up their system. Because that is not going to happen, many areas would necessarily need to be excluded from the negotiations. The Europeans, too, have their red line that they are not willing to cross.

A ‘Downward Alignment’ Threatens

Consumer advocates like the Chairman of the Federation of German Consumer Organizations (Bundesverband der Deutschen Verbraucherzentralen) Klaus Müller therefore demand a “TTIP light” — an agreement that “must be limited to the doable.” Doable would be, accordingly, those areas in which none of the parties involved would need to lower their own standards to achieve agreement. The popularly cited different colors for automobile turn signals — in the U.S. they are permitted to be red, in Europe only orange — would be such an area. In the meantime, consumer organizations in the United States view the planned agreement more critically than they did just a few weeks ago. The unions that once saw the promise of better European labor protection standards are disenchanted and meanwhile support the anti-TTIP protest. Melinda St. Louis, International Campaigns Director of the NGO Global Trade Watch, speaks of a threatening “downward alignment” in which the people of both the European Union as well as the United States could lose protective standards that they have already achieved.

Much remains unclear due to the lack of transparency with the TTIP. Even proponents of the agreement, like the Federation of German Industry (Bundesverband der Deutschen Industrie), speak out for modern negotiations that are open to scrutiny. Fear grows on both sides of the Atlantic: While the Americans regulate their banks more strictly and fear the laxer EU regulations, the Europeans do not want to import meat from animals that have been treated with growth accelerants in the U.S. But where do the red lines of each side run? For consumers, the most desirable solution could be to adopt the correspondingly better standard of the other side in every area. Thus the European consumer could be protected by the stricter American standards for medicines. Scandals such as the case of the burst breast implants in France, for example, could be avoided. The U.S., on the other hand, could adopt Europe’s considerably stricter cosmetic regulations. More than 1,300 substances are forbidden here; in the U.S., only 11.

The Best Standards for All

Two economic areas in which the protection of consumers has a many-decades-long tradition — the environment and labor rights — could, in the meantime, combine their hard-won achievements — a once in a century chance. There have long been areas in which there are globally high and unified standards. In the building of airplanes, for example, consistent safety regulations apply, simply for the reason that airplanes need to take off and land worldwide. That works, by the way, without the TTIP. European and American regulatory authorities have long worked together and aligned their standards, but it is not always clear which standard is better. Europeans nearly completely reject genetically modified foods; the Americans permit them. Up to now it has not been able to be scientifically proven that genetically modified foods are directly harmful to health. It is also not definitively certain that they are harmless, however. So the question of genetic modification remains a political one. But is it therefore non-negotiable?

The EU Regulates Strictly; the U.S. Punishes Harshly

Not only the lack of scientific results, however, makes for problems. A further fundamental difficulty in the alignment of consumer or environmental standards consists of the fact that while the precautionary principle pertains in the EU, the Americans focus on aftercare. Concretely, that means that products can only be sold in the EU when it has been certified that they are not harmful to health. To that end, proper regulatory authorities test, inspect and certify. That can take a long time. The firms, however, profit in doubt by referring to corresponding regulatory limits that they abided by. Firms in the U.S. have to overcome significantly fewer hurdles for approval in advance. A product can only be forbidden if government authorities can conclusively prove that is, for example, harmful to the environment or health.

That does not mean, however, that the American system generally affords worse protection. Firms there need to take into account claims for damages running into the millions at any time. They therefore make an effort out of economic self-interest to make sure their products are safe. However, it is clear that responsibility lies with the individual consumer in the U.S. In doubt, he must pay a high cost to contend successfully for his rights. He cannot know ahead of time whether or not he will win. These two systems can hardly be combined without one side giving up its own mentality. In spite of this, European Commissioner for Trade Cecilia Malmström spoke out after the Greenpeace leak similarly to Merkel: “No EU trade agreement will ever lower our level of protection of consumers, or food safety, or of the environment.”

What Remains if Merkel Ends up Being Right?

Which areas are even negotiable? What the German-European phalanx, from Merkel to Malmström, likes to keep quiet: First and foremost, the TTIP is not supposed to improve consumer protection on both sides of the Atlantic, but instead simplify free the movement of goods and increase the profit of firms. Critics speak of the “primacy of the economy,” of a course of action that is not democratically legitimate, especially in regard to non-transparent courts of arbitration. Proponents, on the other hand, cite the economic area of the EU as a positive example. A success story for consumer protection? In Europe, too, it regularly becomes apparent: In case of doubt, alignment means compromise, in which one of the partners must lower its standards. Thus, when there were stricter rules for the sale of building materials governed in Germany than envisaged by the EU, the European Court annulled the German regulation as not admissible. The consumers, as well as the German producers who had competitive advantages with the higher standards, were ultimately left standing. Industry, too, could have an interest in hindering the TTIP, but the profitable advantages apparently predominate.

Perhaps Merkel’s statement about not lowering standards is intended to distract from the fact that it will be more difficult in the future to even be able to improve standards. Consumer organizations like Greenpeace criticize that for a long time now, a regulatory chill has already emerged. This includes understanding that the ZEU Commission is, for example, already refraining from implementing a pending tightening in the approval of chemicals — the reason for this being to not draw any more red lines that could make the TTIP any more difficult. These observations fit the Merkel-Malmström mantra well, which only places in view that no standards will be lowered. Proponents of the TTIP make no words about the fact that even the allegedly high EU standards are in great need of improvement in many areas, such as the approval of pesticides.

At the moment it appears that Merkel’s statement about not lowering standards could come true if wide areas are not even negotiated simply because they are non-negotiable. But what will then remain of the TTIP? To at least halfway appease the critics, the chancellor would need to promise much more in any case. She would have to guarantee that every standard in existence in the EU today would, in the future, not only not be lowered, but also instead be reviewed, constantly expanded and in doubt, improved. Then, the TTIP would become something that it is not: a European-American consumer protection agreement.