Business executives are rallying support in Davos for a controversial transatlantic trade deal after being caught on the hop by popular and political protests against a possible agreement.
Leading business figures admit they were slow to make the case for the Transatlantic Trade and Investment Partnership, which Michael Froman, the US trade representative, said on Friday was strategically, politically and economically important.
In an interview with the Financial Times at the World Economic Forum, Frank Appel, chief executive of Deutsche Post DHL, the German logistics group, said business leaders were open to criticism “for not explaining why this is very beneficial for Europe and the US”.
Before this week’s conference, John Cridland, director-general of the CBI, the British business organisation, said TTIP was his priority for the summit. “We’ve got to get back on the front foot with the business community on TTIP,” he told the FT.
Unions and lobby groups have caught free-trade advocates by surprise with the strength of their protests against TTIP’s investor protection clauses, which they say give too much power to big business to sue national governments.
Mr Appel said on Friday that “the claim [TTIP] undermines European laws is a completely fact-free statement, but it’s popular”.
Even if the problems can be ironed out, a TTIP deal is unlikely before 2016. But on the back of Barack Obama’s State of the Union speech this week, in which the US president stressed the importance of free trade, Mr Froman is meeting a series of counterparts in Davos to thrash out a joint strategy to break through the logjam.
He was due to speak on a panel with Mr Appel and Roberto Azevêdo, the World Trade Organisation’s director-general, later on Friday, addressing the theme “Rebooting global trade”.
In a briefing, Mr Froman argued that a TTIP deal was important because it would support small companies on both side of the Atlantic, boosting growth. It would also display US and European shared liberal values “when there are a lot of [alternative] models out there”.
At a time when there is geographical instability, a [transatlantic trade deal] could help– Michael Froman, US trade representative
TTIP would also provide a bulwark to Europe in the face of Russia’s resurgence. “At a time when there is geographical instability, a [transatlantic trade deal] could help,” he argued. This last view is shared by Angela Merkel, chancellor of Germany, where public opposition to TTIP is very vocal. She sees it as a strong anchor for the transatlantic alliance at a time of uncertainty, and has made clear while at Davos that it will also be one of her priorities for 2015.
The push in Europe comes as the business community in the US is mobilising to back the Obama administration’s broader trade agenda.
The US Chamber of Commerce has put the securing of “fast-track” authority from Congress for the president at the top of what it calls its “growth agenda”. The Business Roundtable, which groups US chief executives, launched its own push in this direction on Friday.
Getting what is formally called Trade Promotion Authority is crucial for the TTIP negotiations to succeed. But more immediately it is about laying the groundwork for another vote expected in Congress later this year over the 12-country Trans-Pacific Partnership trade agreement, which the Obama administration is now trying to conclude.
Despite Mr Obama’s enthusiasm for free trade, such deals do not have the support of all Democrats. Democratic party senators attending the Davos forum have pointed out that only Republicans applauded the trade passages of the State of the Union address. They said it would need a “change in the weather” to get trade through the Democrats, though with the Republicans in charge of both houses of Congress, not many would have to back such deals for the administration to gain approval.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don’t cut articles from FT.com and redistribute by email or post to the web.
