Free trade has done more to advance the cause of human flourishing and improve the lives of people around the globe than any other system or program devised by man. The historical cooperation between Europe and North America in advancing free trade, economic opportunity, and open markets not only serves to connect our nations, but has been a force for good across the globe. It is important, therefore, to continue working toward improving our economic relationship to advance transatlantic opportunities and build a peaceful international community.
1. An Incremental Approach Under a Common Framework
The goal of a comprehensive trade agreement between the US and the EU should be maintained as a cornerstone of the Transatlantic partnership. However, rather than for a big one-off deal, we argue for an incremental approach under a common framework. It should be reflected both in the negotiation process as well as the setup of the agreement that TTIP (or whatever the name) extends far beyond traditional bilateral trade agreements. The debates surrounding TTIP have shown that for any such new kind of agreement there is a variety of legitimate concerns and stakeholders to be addressed.
Under the proposed incremental approach, the parties would as a first step conclude a framework agreement which would, in addition to serving as a sort of “TTIP light” by slashing or eliminating the tariffs that still exist, establish common principles, processes and structures for the negotiation of technical sub-agreements. These separate technical sub-agreements would address the much more significant regulatory (or non-tariff) barriers on an industry-by-industry (or subject-by-subject) basis. These sub-agreements would eliminate horsing-trading of regulatory standards, – one of the major criticisms levelled against TTIP. This incremental approach allows the parties to build up consensus more rapidly.
For industries where full regulatory convergence seems out of reach or prohibitively costly for small business in the short run, the parties should strive for mutual recognition. Mutual recognition might even serve as the general approach, particularly in areas of first-time cooperation. The barriers to trade will effectively be removed, while the democratic responsibility will be left with each partner state, preempting the concern that TTIP might undermine the democratic process and serve as a platform for the interests of big business.
Last, but not least, the incremental approach offers the flexibility both to respond to new developments and findings as well as to easily expand the agreement to other areas connected to trade, such as digitalization, privacy, or even common efforts to fight tax evasion. The new agreement would be both comprehensive as well as a ‘living’ agreement.
2. A New and More Inclusive Narrative
In the face of growing anti-trade sentiments on both sides of the Atlantic, the proponents of free trade need a new and more inclusive narrative to market any future comprehensive trade deal between the US and the EU. The narrative should be comprised of both factual as well as emotional arguments.
Each agreement should be justified primarily on its own merits. Broad narratives of prosperity and the benefits of free trade are unlikely to appeal to anyone that needs convincing. They also do not take account of fact that what is at stake here often is not trade as such, but democratically agreed upon standards. Setting global standards might undeniably be one of the major benefits of a comprehensive US/EU trade agreement, but it should not be seen as a goal in its own right, unless the standards can themselves be justified on their own.
Proponents should emphasize that, rather than multinationals who already are able to export, it would be small companies that would benefit the most from increased regulatory convergence. That way, a comprehensive trade agreement could not only boost jobs and growth for the wider public, but also bring about increased competition for multinationals.
To win over sceptics’ hearts, the agreement could furthermore be pitched as a first step towards ‘taking back control’ of the globalized economy. Based on common values, partners bound by a special history would undertake to shape the world economy in line with their core values of the rule of law, human rights, free enterprise, and the responsibilities that come with it.
Such a narrative may call for a new name unburdened by the heated battles surrounding TTIP: Long live the Transatlantic Growth Pact.
3. Commit to an Evidence-Based Review
The parties should commit to an evidence-based review of any agreement concluded under the new framework. For there to be an honest public discourse, the Transatlantic partners must pro-actively assess the impacts of their actions and publish the results. The respective governments should furthermore unilaterally commit to establish trade adjustment programs for workers and industries that in such a review are shown to be adversely affected by the agreement. Ultimately, the review may even serve to trigger a renegotiation (including, in the worst case, a suspension) of any sub-agreement that is shown to bring about imbalances that are unacceptable for one party, which is again made significantly easier by the proposed modular approach.
Michal Blank is a PhD in law candidate at the University of Erlangen-Nuremberg and works for a law firm in Berlin.
Jared Holst is studying the global political economy at The Fletcher School of Law and Diplomacy, and has spent nearly a decade working in sales, marketing, and business development for business-to-business technology startups.
Nora Sophie Schröder is a PhD candidate and Fulbright alumnus, working at the University of Augsburg (Germany) at the Peace- and Conflict Studies Department.
Brandon James Smith is a lawyer currently working in state government in the United States, he previously worked for a legal and policy think tank in Washington D.C., and as an adjunct professor at American University.
Steffen Zenglein is working at a consulting company for strategy and communication and graduate of Master in Economics with a focus on international trade at the renowned Ludwig-Maximilians-University in Munich.
Lorenz Zimmermann is a marketing executive at Allianz SE, and holds a PhD in quantitative marketing from LMU Munich.