Why the Developing World Has a Problem with TTIP
Madeleine Goerg and Danielle Piatkiewicz
BRUSSELS—The Transatlantic Trade and Investment Partnership (TTIP) — the landmark economic agreement being negotiated by the United States and European Union — is ushering in an era of new trade deals and drawing unprecedented international attention. TTIP is designed to remove barriers, tackling a host of regulatory issues and very deliberately shaping the global rules on trade. But the political implications of the deal — and specifically the concerns of third parties — have been largely overlooked, to the possible detriment of other partnerships.
The ongoing TTIP negotiations are in part a reaction to global power shifts and an effort on the part of the United States and EU to reinforce the traditional transatlantic alliance. After a period that saw the emergence and growth of several major developing countries, TTIP is regarded in some quarters of the developing world as a step backwards. Perceptions of exclusion have prompted calls by developing countries for increased and sustained integration of the Global South and raised concerns about the future of the multilateral trading system, the role of the World Trade Organization (WTO), and the North’s commitment to a global development agenda. With the inclusion in TTIP of investment, competition, and public procurement — issues that emerging and developing countries are reluctant to address in trade negotiations — several developing countries have also questioned whether transatlantic partners are attempting to impose norms and regulations on which they have no input. Furthermore, the TTIP negotiations were announced only one month after the appointment of Brazilian Roberto Azevêdo, the first director-general of the WTO from an emerging country. Just as the developing world has begun to adopt the rules of the trade game, TTIP is moving the goalposts further. Concerns are particularly prevalent in Africa. The EU’s share of the African market has been steadily declining and the United States is struggling to gain a larger economic foothold on that continent. The EU’s Economic Partnership Agreements with the Economic Community of West African States (ECOWAS) and the Southern African Development Community (SADC) are in the last stages of negotiations.
And the United States is gearing up for the renegotiation of the African Growth and Opportunity Act in 2015. But if the current sense of unease about TTIP endures, African countries might be tempted to turn further toward new emerging market partners from the BRICS (Brazil, Russia, India, China, and South Africa), Turkey, the Gulf states, and Southeast Asia. Policymakers in Washington and Brussels dealing with Africa will need to respond to queries about TTIP, in particular with regards to preferential market access, rules of origin, and possible trade diversion. European and U.S. embassies in various African countries should also be equipped to answer questions and circulate local concerns back to their capitals. Internal European debates are starting to acknowledge this wider political dimension of TTIP. The European Parliament (EP) is currently debating TTIP transparency. Disseminating information on the negotiations, opening dialogue to new stakeholders, and engaging them in the negotiations are among the EP’s suggestions. Although the initiative remains largely EU-centric, it does address concerns about TTIP’s global impact. The United States’ stance remains ambiguous. The U.S. government officially recognizes that trade agreements will effectively enforce and “establish a set of high-standard rules and obligations that help keep markets open to U.S. exporters and investors and ensure a level playing field.” However, to what extent this level playing field will take shape remains unclear.
Overall, the transatlantic partners need to take more decisive steps toward allowing greater openness and transparency in the TTIP negotiations. The EU and United States are banking on the economic growth spurred by TTIP to bolster their global competitiveness and attractiveness as economic partners. This growth might, however, not come soon enough to offset the political damage that a lack of communication with third parties could cause. In Washington and Brussels, policymakers need to actively engage on these issues and provide a convincing narrative to assuage their partners’ concerns.
Madeleine Goerg is a program officer for the Wider Atlantic Program and Danielle Piatkiewicz is a program assistant for the Wider Atlantic Program of The German Marshall Fund of the United States.
The views expressed in GMF publications and commentary are the views of the author alone.