Why TTIP & CETA Are Running Into Trouble In Germany

By  Hans Von Der Burchard, Politico Europe

German Vice Chancellor and Economy Minister Sigmar Gabriel

German Vice Chancellor and Economy Minister Sigmar Gabriel

The fate of EU trade policy hangs on the next four weeks in German politics. The European Commission can only look on anxiously from the sidelines as its most prestigious core competency — the right to negotiate trade terms for the 28 member countries — risks falling victim to a turf war within the German socialist party.

Germany’s Economy Minister and Deputy Chancellor Sigmar Gabriel faces the battle of his political life to rally the unions and his divided party behind a landmark EU trade agreement with Canada. To win the day at a party convention on September 19th, he will probably have to face down the strongest headwinds against free trade anywhere in Europe.

For the EU, the stakes could hardly be higher. Jean-Luc Demarty, director general for trade at the Commission, has warned that EU trade policy would be “close to death” if the bloc failed to ratify the Canada accord.

Without the Social Democratic Party’s support in a Bundestag vote expected by the end of September, it is highly unlikely that Chancellor Angela Merkel would be able to mobilize her Grand Coalition to back the Comprehensive Economic and Trade Agreement with Ottawa.

For Gabriel himself, CETA has sparked a bruising internecine conflict that could burn up his political capital just as he wants to build momentum for a challenge to Merkel at next year’s parliamentary elections. The SDP’s support has plunged to a dismal 22 percent, down from about 30 percent three years ago.

“We can only hope that the SPD approves,” said Joachim Pfeiffer, a lawmaker from Merkel’s Christian Democrats. “A ‘no’ would be fatal. We’re not only talking about huge chances for our economy that are tied to this agreement, but also our aspiration to shape the course of globalization.”

The threat to Gabriel is being watched closely in Canada. In a visit to Europe in April, Ottawa’s Trade Minister Chrystia Freeland identified Gabriel’s support as the most significant factor in securing ratification from the EU.

Gabriel has run into a tide of opposition on free trade. Germany’s main bogeyman is the Transatlantic Trade and Investment Partnership with the U.S. rather than CETA. Some 150,000 people demonstrated against TTIP in Berlin last October, and popular backing for that deal has dropped to 17 percent.

Given this surging hostility to trade in Germany, Gabriel has to tread a tightrope by opposing TTIP while simultaneously backing CETA. One of his main political tactics is to try to persuade the electorate that CETA is not a trailblazer for TTIP, and over the weekend he made that more explicit than ever before.

“The debate has been very difficult,” Gabriel told public broadcaster ZDF Sunday. “That has much to do with the fact that the agreement with Canada gets mixed up with the one with the United States.”

In some of his strongest remarks, Gabriel said that TTIP negotiations “have de facto failed, because we cannot bow down to the demands of the Americans.”

In contrast, he cast CETA as a “good and important agreement,” arguing “it would prevent us from concluding a bad agreement with the United States or other partners.” Two weeks earlier, he told the Frankfurter Rundschau: “Anyone who reads [the CETA text] can’t be seriously against adopting it.”

Dissent in his own party is growing before the party convention in Wolfsburg next month. In a bid to ramp up the pressure, NGOs, unions and environmental and social groups will organize a massive anti-CETA rally on September 17th, just two days ahead of the meeting. People will hit the streets in Berlin, Hamburg, Frankfurt, Cologne, Munich, Leipzig and Stuttgart to denounce CETA as “TTIP through the backdoor.”

Matthias Miersch, spokesperson for the SPD’s parliamentary left wing, has also laid out his concerns in a seven-page paper. “I have analyzed and compared the CETA text with the red lines our party has set at an earlier convention, and I’m telling you, this trade agreement is not acceptable in its current status,” he said. “Gabriel always says CETA is a good agreement, but I haven’t read any detailed, substantial analysis by him to prove his point.”

Miersch is calling on his colleagues from regional party organizations all over Germany to reject the Canada deal. The lawmaker told POLITICO he was not against the agreement as such, but demanded improvements to core elements.

Miersch’s demands are echoed by SPD delegations in the federal states of Bremen and Bavaria, which decided earlier this summer to reject the current CETA text. Michael Müller, the SPD mayor of Berlin, also said Saturday that he had “huge concerns” with CETA. Other regional party associations are still considering whether to vote for or against the trade pact.

Worryingly for Gabriel, major labor unions such as DGB and ver.di, which have a strong influence within the party, have become implacable opponents to the trade deal.

Ver.di chief Frank Bsirske said CETA would jeopardize Germany’s democracy and the rights of workers, while criticizing special rights for foreign investors under an arbitration court system. “This is not North Korea,” Bsirske said.

Gabriel has responded by saying that he is still optimistic about winning the party convention. He says that senior party members such as Hannelore Kraft, minister-president of North Rhine-Westphalia, Olaf Scholz, the SPD leader in Hamburg, and Martin Schulz, president of the European Parliament, will all throw their weight behind CETA.

The next weeks will prove essential for Gabriel to win a stable majority inside his party. A public hearing in the German parliament’s economic committee on September 5th, could help him to seize back initiative in the debate, as supporters and opponents as well as legal experts will discuss the agreement and face questions from the lawmakers.

Gabriel’s party friend Bernd Lange, who heads the international trade committee in the European Parliament, also stepped into the breach by sending a 21-page analysis of CETA to his party colleagues, mapping out how the agreement is in line with SPD criteria.

Lange also hinted at an opportunity to appease the growing concerns on the party’s left. “In my analysis I agree that at some points the CETA text can be improved, because the legal wording is unclear,” he said. “We can solve this during the ratification process,” he continued, raising the possibility of a joint declaration between the European and Canadian parliament to resolve any ambiguities.

While Gabriel is politically tarnished by the trade debate, SPD politicians stress there is no movement to unseat him as party chief. Miersch said: “We need to separate leadership debates from questions of content.”
Jürgen Hardt, a Christian Democrat lawmaker and coordinator for transatlantic cooperation, said there was little room to question the legitimacy of CETA, given that the Bundestag would vote at the end of September to give political backing to Germany’s position at the Council.

“Moreover, the agreement will need to be approved by the European Parliament, and since it is a mixed agreement, once more by the Bundestag,” he said. “It’s hard to imagine how there could be any greater legitimization by parliaments.”

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