April 9, 2014

Support in Principle for U.S.-EU Trade Pact

But Some Americans and Germans Wary of TTIP Details

Commentary by the Bertelsmann Foundation: Overcoming TTIP’s Double Deficit

Ambitious in scope, the Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated by the United States and European Union could be the world’s largest regional free-trade agreement. It could even re-define the trans-Atlantic relationship.

Since the negotiations’ inception, they have been subject to a wide range of German news coverage. In the US, it’s been a different story. A potential deal has garnered little attention outside Washington, DC. In both cases, this is causing additional challenges for negotiators.

The Bertelsmann Foundation and the Pew Research Center consequently partnered to survey public perceptions of TTIP by looking at Germans’ and Americans’ attitudes towards international trade. The poll’s results show that TTIP suffers from a “double deficit”: There is a lack of understanding and a lack of trust.  The survey helps reveal the information gaps and expose the different perceptions among experts, negotiators and the broader public. More transparency and dialogue could enable politicians to build a mandate to unleash TTIP’s economic potential by taking into account the serious concerns in society about an agreement.

Lack of Understanding

Overall, strong majorities in the United States and Germany support international trade, while smaller majorities believe TTIP would be good for their respective countries. Support in the US, however, varies across generational and political lines. Democrats back TTIP more than Republicans, indicating that the Democrats’ traditional apprehension of free trade may be waning. Additionally, younger Americans are more enthusiastic about an agreement than those over 50 years of age. This support may emanate from greater travel opportunities and the global exposure that social media and the Internet offer.

Contradictions among Germans and Americans on TTIP’s contours, however, suggest a greater lack of knowledge of the agreement than their general support of it may indicate. On the issue of removing trade and investment barriers between the United States and the European Union (two of TTIP’s primary goals), many Germans and Americans oppose eliminating duties on goods from the other side of the Atlantic.

Many Germans and Americans also oppose removing some investment barriers. While majorities are against transatlantic merger-and-acquisition activity, two-thirds of Americans and one-half of Germans believe that transatlantic greenfield investment would be economically beneficial. This suggests an incongruity between the public’s perception of investment and TTIP’s impact on it.

While any democratic society would show a range of views on trade issues, the variety of opinions reflected in this survey indicates that more transparency can help build support for the TTIP process and could be a good basis for an evidence-based dialogue in society on both sides of the Atlantic.

Lack of Trust

The survey results also suggest that both sides must overcome a significant trust deficit to rally public support for TTIP. Germans overwhelmingly have faith in European standards over American standards. Most Germans prefer European standards on food safety, environmental protection, auto safety and data privacy. Americans also predominantly favor their own standards, albeit by smaller majorities. Most Americans prefer US auto-, food- and environmental-safety standards.

A trust deficit also arises within Europe. Only a minority of Germans agrees that the European Union should negotiate international trade deals on their behalf. The majority wants Berlin to do it. This disparity may have two explanations. It may indicate that Germans are largely unaware that negotiating free-trade agreements is an exclusive competency of the European Commission. It may also suggest that Germans generally distrust EU institutions and are skeptical of the Commission’s ability or desire to negotiate in the Germans’ best interests.

Finally, the attitudes of Germans and Americans reflected in the survey suggest that negotiators and officials are failing to provide a convincing case for TTIP’s necessity. “Jobs and growth” has often been the common refrain used to bolster support for TTIP. Yet public discourse is dominated by the potential sticking points of an agreement, particularly agricultural and data-privacy issues. Evidence-based dialogue is necessary to assess the real value of different standards, and to validate those standards in the context of their potential for economic growth.