US-EU deal: Germany warns against overblowing expectations

Economy minister says estimates about its impact give impression of ‘voodoo economics’.

BERLIN: Germany’s economy minister warned on Saturday against overblowing expectations for an economic boost from a trade deal between the United States and European Union (EU) but said the pact was needed to set high common standards for consumers.

The European Commission is trying to finalise a deal on the Transatlantic Trade and Investment Partnership (TTIP), which some experts say could generate $100 billion a year in additional economic output on both sides of the Atlantic.

It would eliminate all tariff barriers between the US and EU members, which together account for almost half the global economy. “I don’t believe in the wondrous calculations for economic growth from the trade deal,” said Germany’s Social democrats (SPD) Chairman Gabriel.

“All the estimates about its impact give an impression of voodoo economics,” Gabriel told Focus weekly.

However, Gabriel, who has long expressed reservations about some aspects of TTIP, said Europe urgently needed a deal. “Our companies would profit because, with equal standards, they wouldn’t have to go through approval procedures twice,” he said.

“Overall, Europe would profit because we could influence the standards for world trade for the coming 20 or 30 years,” said Gabriel, adding that without a deal, other countries, including China, would end up setting environmental and consumer standards.

Gabriel repeated the SPD’s concerns about allowing US multinationals to use the so-called investor-to-state dispute settlement mechanisms to challenge Europe’s food, labour and environment laws on  grounds that they restrict free trade.

The US will not accept a deal without that.

On being asked when the TTIP could be finalised, Gabriel said that the view in Brussels, that the deal would be concluded this year, was very ambitious.

Published in The Express Tribune, April 12^th, 2015.

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