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EU edges closer to transatlantic free trade agreement

EU edges closer to transatlantic free trade agreement


Despite making strong electoral gains in the May 2014 elections to the European Parliament, populist parties have failed to translate these successes into vice-chair and rapporteur positions on the body’s influential Committee on International Trade (INTA). The failure to form a cohesive political group has left MEPs from fringe parties isolated and outflanked by mainstream centrist parties on INTA which is charged with passing the Transatlantic Trade and Investment Partnership (TTIP) – a proposed free trade deal between the EU and US – through the European Parliament.

Fringe populist parties fail to secure key positions

Fringe parties with members on INTA have previously stated their intention to derail progress on the TTIP. The French National Front, Italy’s Northern League and the Freedom Party of Austria have members on INTA opposed to the TTIP, yet their efforts to stymie legislative progress on this free trade deal are likely to be unsuccessful.

The lack of rapporteurs representing populist fringe parties will reduce their ability to form proposals for resolutions or legislative amendments that INTA members will vote on. Their objections are more likely to be traded as barbs in the media rather than in filibustering amendments that could chip away at and dilute the provisions of this potentially wide-reaching trade agreement.

After the May elections, one MEP from the Socialists and Democrats chairs INTA, while the European People’s Party has two vice-chairs and the European Conservative and Reformists have one. All of these political groups – with caveats – back the TTIP, as does the Alliance of Liberals and Democrats for Europe (ALDE). The TTIP also featured prominently in the recently published political guidelines of the incoming President of the European Commission, Jean-Claude Juncker, who has called for a speedy completion of a balanced free trade agreement between the EU and US.

Political appetite to clinch a deal remains

The EU and US completed the sixth round of TTIP negotiations in Brussels on 18 July 2014, identifying areas of convergence and further trade barriers that can be eliminated to help build a transatlantic single market. Indicating the opportunities for business that this deal would present, research conducted in September 2013 indicated that a transatlantic free trade agreement  would increase the size of the EU economy by €120 billion (US$162 billion) (or 0.5% of GDP) and the US by €95 billion (US$128 billion) (or 0.4% of GDP).

The negotiating parties aim to conclude negotiations by the end of 2014, with a deal rubber-stamped and agreed by both the European Parliament and European Council. Multinationals with transatlantic operations are likely in the short term to continue to lobby both INTA members and European national governments to ensure that the political will to achieve this trade deal does not dissipate.

On the other side of the Atlantic, midterm elections in November 2014 are likely to prove critical in easing the passage of the TTIP in the US. Senior Democrats have opposed fast-tracking free trade deals through the Senate. If – as currently seems likely – the Republicans gain control of the upper chamber in November, the prospects for the TTIP will be improved, with the potential for the Republicans to work across party lines with the White House to push a deal through.

Significant external opposition to the TTIP

There remains a strong appetite among national governments across the EU and US to conclude the TTIP, however, several stumbling blocks remain in the way of progress. Heads of state and government across the EU and US face the challenge of assuaging the concerns of a wide range of civil society actors, including, digital rights activists, environmental NGOs and labour unions. Contentious issues that may hold up the TTIP include transparency and data privacy issues, investor-state dispute settlements (ISDS), agricultural subsidies and European safety, health and social standards.

Despite the potential economic benefits of realising the TTIP, quick progress to concluding this free trade agreement is expected to be difficult. Fringe European parties are likely in the short term to take to the media to generate negative perceptions of the negotiations. However, with widely divergent ideological stances, it remains highly doubtful whether they can act as an effective political force and disrupt legislative procedure inside the European Parliament. Many of their members have poor records of participating in the more mundane aspects of parliamentary process, which is unlikely to translate into them having a key role in determining the future complexion of European trade policy. Opposition to the TTIP is therefore most likely to be forthcoming from a range of external actors rather than from key members of INTA. 

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