A screaming silence from free marketeers is jeopardising the vital EU-US trade deal
The landmark free trade agreement currently being negotiated by the EU and the US has set off all kinds of noise this week, particularly after unions accused the government of failing to secure an explicit – and unnecessary – exemption for the NHS. But from the coverage in the UK, you could be forgiven for thinking there are no gains to be made. This could hardly be further from the truth.
The trade and investment agreement known as TTIP could create the biggest single market in the world, but increasingly the only attention paid to it ranges from apathy to outright opposition. The EU can ill-afford to drop the baton in its badly-needed quest for competitiveness, yet its most obvious tool for deployment in the area of free trade is coming under attack. The rise of protectionism across Europe is gathering pace, but TTIP’s most unlikely foe could be the indifference of free marketeers here in the UK.
Britain has a proud tradition as an open, liberal economy, whose stamp on the EU has kept more insular elements of the club at bay. Business has reaped benefits from being part of a bloc that has a commitment to free trade at its heart. While the rise of Jacques Delors’s “social Europe” and the profligacy of interventionist employment law has added a burdensome dimension to EU membership, Brussels’s trading ambitions have remained resolute. In a recent survey, trade was one of the only areas of competence which IoD members believed the EU best-placed to manage.
So the start of TTIP negotiations should have been seen as a triumph of UK influence in Brussels. Together, the US and the EU account for nearly half of world GDP, with a wealth of still-untapped potential for SMEs in particular. Beyond the scope it provides for tariff elimination, the agreement offers opportunities for regulatory convergence and coherence that could set global standards in trade and a host of commercial sectors. The Anglo-Saxon economic model shared by the UK and US has surely helped lay the foundations for such a deal. Yet the enthusiasm with which free market UK politicians should be greeting it is tempered by an elephant in the room: it’s Brussels doing the negotiating.
The sad truth is that, for a number of Conservatives, Euroscepticism seems to matter infinitely more than free trade. There is a deafening silence from those who should be shouting the loudest about TTIP, with concern at being seen to endorse the EU chief among their priorities. Pro-enterprise sentiment has been eclipsed by anti-European fervour, to the detriment of UK businesses.
Some Eurosceptics on the right have even sought to undermine the TTIP agenda by playing to the populist left in depicting it as the plaything of multinationals. Yet it is SMEs who stand to gain the most from seeing this agreement go through. Eliminating regulatory duplication is the focal point of negotiations, as this is one of the biggest barriers to exporting for smaller enterprises. IoD members routinely list overseas regulation as among the principle reasons for not undertaking greater export activity.
And in the absence of Britain’s normally vocal free trade majority, unions and environmental groups have filled the void, and the cacophony of scaremongering whipped up around TTIP grows louder by the day. The reactionary voices of anti-globalisation threaten to gut the agreement of its most important aim of regulatory convergence, or to derail it altogether. Many of these elements have just been elected in droves to the European Parliament, where it is being mooted that TTIP could become the new ACTA – an international agreement on intellectual property rights that was vetoed by MEPs, despite having been signed by most EU governments.
Opposition is loudest on the continent, and reports that Germany is mulling a rejection of the pending EU-Canada free trade deal show this threat is not without teeth. The liberal voice of British pragmatism is desperately needed. But as this would involve supporting a European Commission tasked with steering the trade deal through, those who would normally extol free trade’s virtues are either silent or dismissive, preferring to concentrate on what kind of agreement could be struck if the UK were negotiating alone. This is a red herring, and a distracting one at that.
Perhaps in theory a transatlantic trade deal could be done faster between Britain and the US, but the TTIP is the only one currently on offer, and there is a discernible trade fatigue setting in in Washington. Its first priority is the far more contentious TPP agreement being pursued with the Pacific Rim countries. A separate post-Brexit deal is likely to be low on the US’s priority list.
A realistic “take it while you can get it” approach doesn’t seem to endear itself to UK Eurosceptics, but politics and business often operate in different spaces, particularly over Europe. It is a luxury afforded to politicians to talk of what could change in the future, one that firms looking to expand now simply do not possess. The practical opportunity that TTIP offers should not be put at risk by conscious indifference just because the EU is lead actor. The great EU debate can continue apace. But for as long as the UK remains a member, we should be determined to maximise whatever benefits there still are to be won.