A nation of exporters is increasingly wary of liberalising trade
By L.R.S.
FEW countries have done as well out of international trade as Germany. Last week the Ifo Institute, an economics think-tank, said Germany’s current-account surplus was set to hit an all-time high of $310 billion this year. A strong export industry and a currency weakened by the travails of its southern neighbours make Germany’s economic position hard to challenge. Yet on September 17th between 100,000 and 250,000 Germans will take to the streets in cities across the country to protest against the Transatlantic Trade and Investment Partnership (TTIP), a free trade deal currently being negotiated between the European Union and America. They will also protest against CETA, a similar deal between the EU and Canada. In a poll conducted by the European Commission in May, 59% of Germans opposed TTIP, compared to the EU average of 34%. Only the Austrians were less keen. Why is a nation of exporters so wary of liberalising trade?
One big factor is a growing resistance to change. Unlike their peers in other European countries, Germans consider their country to be in good economic shape. A big change to the status quo, such as a new trade agreement, strikes them as a threat to existing privileges rather than an opportunity to improve their lot. When asked about their reasons for opposing the TTIP, Germans overwhelmingly say that it will curtail consumer rights, compromise data and environmental protection and worsen labour conditions. They fear that the creation of new supranational arbitration courts to settle trade disputes may empower large global corporations at the expense of consumers and smaller firms. Many are suspicious of what they consider a secretive and elitist style of negotiation.
Not all these concerns can be ignored. Negotiators have already revised plans for trade arbitration to reassure critics. But most arguments have little basis in fact. Greater trade would improve choice and reduce prices for Germans. Harmonising standards would benefit small companies. And rather than make things worse for workers, the deal is likely to create more jobs. Yet politicians have been slow to make these points. At the same time, organisations critical of trade deals such as Attac, an anti-globalisation group, played uppopular concerns. Scare stories about mass imports of chlorine-drenched chickens or the destruction of independent bookshops have spread in mass emails and internet memes. Many such groups are arranging transport to take protesters to demonstrations tomorrow.
German scepticism has already dealt a blow to TTIP negotiations. It could be mortal. Sigmar Gabriel, the country’s vice-chancellor and economics minister, and a long-time proponent of TTIP, admitted last month that negotiations had “de facto failed”. In any case, no deal is possible before Americans vote for a new president in November. Given both candidates’ lack of enthusiasm for new trade deals, it may never happen at all. In Germany, opposition to TTIP may morph into a more widespread resistance to trade and open markets, for which there is still just about a majority. In trying to secure their prosperity, Germans may be undermining the very thing that has ensured their success.
