Contact Us


Disruptive Competition Project

655 15th St., NW

Suite 410


Washington, D.C. 20005

Phone: (202) 783-0070
Fax: (202) 783-0534

Contact Us

Please fill out this form and we will get in touch with you shortly.
Close

TTIP: Time to Trade Up

· March 6, 2015

Trade across the seas dates back thousands of years, and trade deals nearly as long. Since the 17th century those deals have been brokered in secret by nation states; processes that no longer seem appropriate in the digital age.

Unsurprisingly, governments are struggling to keep up with how the internet has upended trade negotiations. Internet communities not only stopped the proposed Anti-Counterfeiting Trade Agreement in 2012, in 2015 most of organizing and coalition-building against TTIP – the proposed Transatlantic Trade and Investment Partnership – is also taking place online.

Researcher Matthias Bauer, for example, has found that 85 per cent of all TTIP-related positions in German online media are originally authored and spread by anti-TTIP groups. Germans and others are bombarded with opinions that TTIP is about lowering standards, privatizing public services and leaving Europeans at the mercy of voracious American multinationals. Some are happy to blur the lines between effects of trade and globalization, or prone to use anger at mass-surveillance as a reason to rule out such deals before they are drafted.

In this environment little credit is given to the European Commission for its efforts to increase transparency. This frustrates the Commission, while many activists consider it a case of ‘too little, too late.’ Putting the big P politics aside for a moment, it seems that one reason for the indifference from stakeholders is that the extra transparency is so insignificant when taken out of its specific trade negotiation context. Isn’t transparency what we expect of every leader and company today?

Negotiating mandates are now published online (as with every national draft law). Members of the European Parliament have access to relevant documents (essential to any parliamentarian’s ability to provide scrutiny). Briefings take place with stakeholders (that’s why they are called stakeholders). And Cecilia Malmstrom, European Commissioner for Trade, goes out of her way to engage beyond boardrooms (as she should, because most of us are not board members.) There is also the now standard litany of live-streamed speeches, YouTube videos and infographics.

The total lack of interest in this shift is evidence of just how much the digital revolution has shifted the expectations of citizens. Openness is the new minimum they expect from the powerful, and they aren’t going to give applause to leaders for providing it.

While that may be so, it is still unhelpful to simply stand on the TTIP sidelines demanding more and more from the negotiators. Just as those technocrats fail to appreciate that the goalposts have moved, many stakeholders fail to appreciate the real reasons why we need TTIP in the first place.

TTIP is not about a claimed 0.35% increase in GDP. It’s much more about avoiding economic suicide and stopping geopolitical foes from getting what they want. Russia’s Putin would like to see a divided West. China would like to be the global economic hegemon. And low-cost competitors would be delighted for us to leave economic friction in place, like duplicated inspections, tariffs and other red tape, because it makes us even less competitive.

Another undervalued point is that TTIP is essentially a “race to the top” when it comes to standards. From how we handle everything from data to food, TTIP is the only game in town for dragging the world up rather than down. If you prefer innovation to brute global capitalism, TTIP is actually not a bad place to start.

Yet, why should internet communities and companies feel a direct connection to the cause of getting TTIP done?

For a start it’s a matter of logic and principle. The internet is global and yet not transatlantic: we share a network but not enough of the rules and standards to make best use of it. Technological neutrality, regulator independence, free data flows and a level playing field for buying and selling online are progress we should believe in.

Secondly, European firms are net-exporters of digitally delivered services. When we look beyond a few markets like search and some software, “Europe is winning in digital trade, but differently than how most people might think. Europe’s data enable ‘traditional industries’ for instance are first in class,” according to CCIA’s Christian Borggreen. But there is a flip-side to that success. If TTIP derails, that would leave Europeans as the most exposed party. “Fiddle with trade or openness of data and it’s the EU that gets hurt most,” warns economist Hosuk Lee Makiyama.

Thirdly, it’s small businesses that actually have the most to gain. Thanks to internet, small businesses with global aspirations can now connect globally. They are not dependent on the value chains of large corporations.

Hanne Melin from eBay asks us to “imagine a world where every small business sees all 200 countries as part of their customer base.” She has impressive statistics to back the claim: 96% of sellers on eBay sell internationally compared to the 14% of traditional US businesses who sell to 5 or more countries.

Finally, it’s now time to help traditional trade negotiations to pull their weight. The World Trade Organisation – wedded to old methods – has floundered. In contrast the internet has been bringing down barriers to innovation and between countries for 20 years. But the internet can’t do everything.

In other words, we need to improve TTIP, not wreck it. We need to do that because the costs of a lost TTIP won’t be counted in shrunken Silicon Valley share dividends. They will be counted in shuttered factories in parts of Europe that need both the power of digital and lower red tape to stay alive.

TTIP is never going to be perfect, but wrecking it is too easy. Europe needs builders instead.

Digital Trade

Companies rely on clear, predictable rules that facilitate digital trade to export their products and services around the world. These rules include balancing the competing interests between encouraging investment and enabling information access; promoting the free flow of information online; and maintaining balanced intermediary liability regimes.