On Monday April 25th the 13th round of talks over a free trade agreement between the European Union and the United States gets under way in New York. Discussions between the two sides look set to be difficult. The EU's trade commissioner Cecilia Malmström believes that it is still “possible” to find an agreement between now and the end of the year. But not too many other people share that view.
On Sunday, the day before the talks start, US president Barack Obama will be meeting the German Chancellor Angela Merkel in Hanover when it is likely he will seek to breathe new life into the talks in a bid to enable a deal to be struck before the end of his term of office. But one obstacle to a quick deal now appears to be France's new tough stance on it. For the French overseas trade minister Matthias Fekl, whose remit covers the trade talks, has been warning increasingly that Paris may not accept the treaty, a treaty which worries many in Europe on both the Left and Right. Here Mediapart's Brussels correspondent Ludovic Lamant examines the evolving French reaction to the planned Trans-Atlantic Free Trade Agreement (TAFTA), also known as the Transatlantic Trade and Investment Partnership (TTIP)
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- 1. Matthias Fekl: anti-TAFTA mood music for nearly a year
It is by no means the first time that France's overseas trade minister Matthias Fekl has spoken out on the subject. He attracted headlines at the start of the French regional election campaign late in 2015, first of all in Sud Ouest newspaper then on BFMTV, when he threatened to block the talks. “France is considering all the options, including simply stopping the negotiations,” he said. At the time he said he would take his decision next year – meaning 2016.
The junior minister's tone has hardened in the past week, however, as he revealed that he believed “less and less” in the possibility of an agreement. Reacting to suggestions that Berlin wants to accelerate talks, Fekl said: “If there should be a sudden acceleration that would mean that the hard parts of the negotiations had not been dealt with. That would be a third-rate deal that would not satisfy European demands. For France, a quick deal is a bad deal, we won't sign.” To make sure there was no misunderstanding about what he was saying the minister added: “For the negotiations to make sense they must allow very high standards to be set. But that's not the direction they're taking today. So as I've already said, we must draw the consequences of that.”
In essence the minister criticises the continuing lack of transparency in the negotiations. He considers that thus far Washington has made very few concessions in those areas where France has a clear advantage. Among the key issues for Paris is the degree to which US public markets are opened to European investors: “commercial reciprocity” as it is known in the jargon. “All the American overtures in this area are incidental. Now, it's reasonable to suppose that there will not be advances from the Americans on this issue. That greatly reduces the usefulness of these negotiations,” says Fekl. Another sticking point is that the Americans seem to object to recognising a whole raft of “geographical indications” (GIs) that are supposed to protect certain agricultural products in France and elsewhere.
- 2. A novelty: Hollande and Valls on the same page
Since he became a minister in September 2014, Matthias Fekl has chalked up a few political successes in relation to the TAFTA talks. In particular he distinguished himself over the renegotiations concerning the deeply controversial court that is part of the TAFTA structure, an investment court that is supposed to allow multinationals to take legal action against nation states. His line, agreed with Berlin, was able to change the European Commission's stance on the issue. But Fekl has had a major handicap during the talks: it has often been hard to know whether the French president's office and that of the prime minister were on the same wavelength. For a long while this left the minister on his own in the talks.
In particular there were the devastating comments made by President François Hollande during a trip to the United States at the beginning of 2014, when he said the ongoing trade talks had to be speeded up – the opposite of the current line. “Going faster is not a problem, it's a solution,” said Hollande. “We have everything to gain by going fast. Otherwise, as we well know, there'll be a build-up of fear, threats and tensions,” said the French president.
It will also be recalled how, in the spring of 2013, the French president was happy with a bare minimum from the treaty when the EU heads of state and government drew up the mandate for the European Commission ahead of its negotiations with Washington. At the time the debate came down to one single demand: to exclude audiovisual services from the scope of the negotiations. This demand was obtained, but it was the only point that Paris had found to pick up on in the Commission mandate, even though it contained, among others things, the thorny issue of the investor court that was to paralyse a major part of the negotiations from the summer of 2014.
From this perspective, François Hollande's comments during his television appearance on public broadcaster France 2 on April 14th must have relieved Fekl, who saw his strategy confirmed by the head of state. Hollande was seeking to show proof of his firmness on a subject, the trans-Atlantic trade deal, which taps into the unease of a section of the French population about globalisation. “France has laid down its conditions, France has said that if there is no reciprocity, if there is no transparency, if there's a danger for the farmers, if we don't have access to the public markets and if, on the other hand, The Unites States can have access to everything that we do here, I won't accept it,” he said.
With France's 2017 presidential election looming, and with the far-right Front National and the radical left Parti de Gauche, among others, likely to make the treaty an electoral issue, the French president doubtless had little choice but to talk in that way. Prime minister Manuel Valls, speaking on France Info radio on Wednesday April 20th, reiterated the French line, expressing his “concern” about the direction that the negotiations have taken.
- 3. At what stage are the talks?
The first formal TAFTA or TTIP negotiations took place in July 2013 and next week will see the 13th round of these talks, in which the European and American teams meet face to face, either in Europe (Brussels) or in the United States (Washington, New York and Miami for example). But in recent months contact between the two sides has been stepped up, extending beyond simply the official rounds of negotiations. However, that certainly does not mean that the talks have made decisive progress.
In total, according to the European Commission, around ten sections of the negotiations have been “secured”. But issues such as the opening of public markets in the United States (to become part of the Buy American Act), the inclusion of financial services in the negotiations and the new draft put forward by the Europeans to replace the original proposal for a investor-state dispute settlement (ISDS) procedure are all sticking points for Washington, which has shown little sign of wanting to shift its stance. “There remains a lot to do,” admitted the EU's trade commissioner Cecilia Malmström on Tuesday April 19th.
There are now two scenarios on the table. One is that the talks accelerate so that a form of “TTIP light” or “TAFTA light”, under which the most controversial sections of the talks are simply taken out, is agreed by the end of the year. In fact, in view of the fact that the US presidential elections take place at the end of the year, any such deal would need to be wrapped up by the summer. Then in the following years there would be what's called “legal scrubbing”, during which unofficial talks would carry on under the guise of translating the treaty into each member state's law. This is what happened with the EU trade agreement with Canada. This could suit the Germans who see the talks above all as a chance to find new outlets for their car industry. Rome has also indicated that it wants a rapid conclusion to the talks, as do some countries in central and eastern Europe. From this point of view France is rather isolated.
The other scenario is that the issue gets bogged down and is postponed until after the end of Obama's term of office, and also after the French presidential elections in May 2017 and German parliamentary elections in October 2017. In effect this would mean burying the entire accord without actually stating so. Especially as the four main remaining US presidential candidates, Donald Trump and Ted Cruz for the Republicans and Hillary Clinton and Bernie Sanders for the Democrats, have all defended a certain level of protectionism during debates on the so-called Trans-Pacific Partnership (TPP) that involves certain countries in Asia, Oceania and Latin America.
- 4. Some NGO's remain unconvinced by the “tough” line from Paris
One might imagine that those parts of civil society that are opposed to TAFTA would be delighted by Matthias Fekl's tough public comments in the last week. In fact, this is not the case. First of all, they accuse the French government of doublespeak, insisting that in meetings with business groups the junior minister adopts a significantly softer stance than the comments he makes to the French media, and which Hollande and Valls take up. Some non-governmental organisations also worry about French demands in the TAFTA talks when it comes to opening up public markets, which they fear will further increase the liberalisation of trade nd destroy jobs as a result.
But above all these groups criticise the French government over another trade text which, unlike the TTIP, is on the point of being finalised and coming into force: the EU-Canada trade deal known as CETA. This is due to be adopted by the European Council of member states in the autumn and will be voted on by the European Parliament by the end of the year.
The EU-Canada deal, which at one point looked set to founder on the issue of the investor-state dispute settlement procedure, was recently resuscitated. And while many opponents of the proposed EU-US trade deal consider that CETA served as a testing ground to launch negotiations with the United States, Matthias Fekl constantly praises the Canadian agreement. “CETA is almost the exact opposite of the TTIP as it stands today: it guarantees access to the Canadian public markets, it recognises the protection of geographical indications for Europeans, it includes the French and European proposal of a public court which is a great progressive advance,” insists the junior minister.
Amélie Canonne, from the association AITEC which campaigns for international economic and social justice and which is opposed to the Canadian deal, sees the situation completely differently. “CETA contains the majority of the damaging and unfair measures proposed in the framework of TAFTA,” she says. “The liberalization of agricultural trade and basic services, investment arbitration, regulatory cooperation, making transatlantic trade in dangerous energies easier, limiting the regulatory capacity of public authorities...” After the vote on the so-called Trade Secrets law split the European Parliament this April, the vote by MEPs on CETA later this year looks set to be every bit as disruptive.
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- The French version of this article can be found here.
English version by Michael Streeter