Europe’s strategic choice delayed: on results of the US president’s visit to Germany

“Buy American” – such was the headline of almost all mass media comments on US President Barack Obama’s visit to Germany as the visit coincided with the Hannover Messe and Obama was one of those who opened this world’s biggest industrial fair.

In the UK, Obama’s message was Europe’s unity in the face of the British EU referendum, in Germany, he advertised the Transatlantic Trade and Investment Partnership (TTIP), a project to create a transatlantic free trade zone. In Germany, lots of people are against this project: in Oct 2015, a protest action in Berlin gathered as many as 200,000 German citizens. A similar demonstration was organized in Hannover on the eve of Obama’s visit. According to the Bertelsmann Foundation’s survey, each third German is against TTIP.

The TTIP talks have been underway for three years already. On Apr 25, 2016, New York hosted their 13th round. But this process is not moving as quickly as it was supposed to. The text of the agreement is to be ready by July 2016 and to be signed by Sept 2016 – by the start of the presidential campaign in the United States.

Initially, TTIP was supposed to become one of Obama’s strategic victories and a huge trump for his Democrat successor during the Nov 2016 presidential race. But in Hannover Obama just expressed hope that the talks would be successful and that the agreement would be signed by the end of 2016 and would be ratified by the time he will resign.

During her joint press conference with Obama, German Chancellor Angela Merkel openly supported TTIP even though it is very unpopular in her country. By doing this she has shown once again that she is the Americans’ most reliable partner in Europe and that she is not afraid of her voters’ criticism. Obama rewarded her for this by saying to Bild that he was proud of being Merkel’s friend. He complimented her for her stamina during the last year’s migration crisis. "She is giving voice, I think, to the kinds of principles that bring people together rather than divide them, and I'm very proud of her for that, and I'm proud of the German people for that," Obama said during the press conference and added that Merkel was on the right side of history – history that he believes to belong to his country. On the other hand, Obama warned that time for TTIP was ticking. So, in Germany the US president counterposed the transience of time and the eternity of history. Such was the paradox of his rhetoric in Hannover.

TTIP has caused a split in the German society: one camp is praising the Americans, while the other scorns them. Obama tried to influence the latter. Now that the Germans are much less stressed than they were during the migration crisis, they took his words quite calmly. So, in Hannover the US president avoided the scandal he faced in London.

Merkel received him at Schloss Herrenhausen, the summer residency of Hannover kings. Hannover has no kings any more but the off-springs of the Hannover dynasty are now ruling the United Kingdom. There was something symbolic in the fact that in London Obama first welcomed Queen Elizabeth II and then moved to Hannover to speak in the palace once owned by her ancestors. Exactly this type of symbolism the Americans need to demonstrate the unity of Europe under their aegis.

On Sunday evening, Obama and Merkel met with 29 US and German top managers. The German side was represented by Lufthansa, BASF, Siemens, Thyssen-Krupp, Bosch and Bayer, the American side by Motorola, Boeing, Microsoft, Merck and Lockheed Martin. So, we can see that in their TTIP talks Obama and Merkel rely mostly on transnational companies.

Germany’s welfare is based on its exports, particularly, on the exports to the United States. Most of the Germans regard the Americans as the guarantors of their security and are grateful to them for their support after the WWII. But still lots of people in Germany are against TTIP as to them this agreement is just a conspiracy of transnational monopolies and banks. Most of the German monopolies and banks have long become transnational due to US funds. So, they can well be used as a locomotive for the TTIP process.

The Americans are doing their best to lure the Germans into TTIP. In 2015, they outran the Frenchmen as the key buyers of German goods. In 2015 alone, their trade with Germany grew by 20% to 173bn EUR, wherein German exports made up 114bn EUR. So, we see that trade with the United States is a huge source of income for the Germans. Now that the Germans have suspended their trade with Russia, the United States has become their key trade partner. VDMA (the German Engineering Federation) is happy to note that car exports to the United States are steadily growing. USD’s rise against EUR has opened up new competitive opportunities for German producers.

If TTIP is signed, the Germans will enjoy customs exemptions and unified industrial standards and will save billions of EUR as a result. German producers will face no more customs control and will be able to export more. And they are not afraid of US rivals as they believe that diligence conquers all, including talent.

But TTIP opponents in Germany are afraid that this agreement will benefit only big German companies. Today as many as 150,000 German SMEs have contacts with the United States and they would also like to get benefits from TTIP.

One of the key concerns is that TTIP may impose new regulations. The Germans are afraid that their consumption standards will be softened. They also fear that the role of trade unions will be reduced. They also have apprehensions of a possible inflow of US GMO food. In other words, the Germans are not satisfied with the American consumption standards and would not like to see their own ones downgraded.

One more concern is that the TTIP talks are not transparent. In fact, the negotiating party here is the European Commission rather than the German government. Some of the details were made public in Feb 2016.

Particularly, the Germans learned that by the 12th round of the talks they had objections concerning half of 25 points. In early 2016, the Americans suggested adopting a simplified version of the agreement and leaving moot points for a later period. The Europeans refused and claimed concessions. One of their claims concern commercial disputes. They want such disputes to be settled by arbitration rather than state courts. One of the points says that only US companies should have access to tenders in the United States, while the Germans hope that TTIP will give them access to this market.

So, now the ball is in the Americans’ court and it is for them to decide to concede or not. In Hannover Obama tried to change the Germans’ attitude to TTIP.

But here we should keep in mind that TTIP is a political deal. In fact, it is part of the United States’ imperial project. Here we are dealing with geopolitics rather than just free trade. TTIP is supposed to help the Americans to strengthen their hegemony in Europe. In exchange the Europeans will be offered specific benefits. If formed, the US-EU free trade zone will cover 46% of global GDP and 1/3 of global trade. As a result, the Americans and the Germans will be able to impose their trade rules worldwide. On the other hand, TTIP will cause serious changes in the integration processes developing in Europe and in the Europeans’ relations with the rest of the world.

EADaily Analysis