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IEP Lunch Debate with Prof. Dr. Heribert Hirte, member of the German Bundestag, on “TTIP as a Challenge to the EU Decision-Making System”

Wolfgang Wessels, Katrin Böttger und Heribert Hirte (f.l.t.r.)

In the IEP Lunch Debate at the Repre­sen­tation of Baden-Württemberg to the Feder­ation, Dr Heribert Hirte, member of the German Bundestag, spoke on the topic, “TTIP as a Challenge for the EU Decision-Making System.” The event was opened by Volker Ratzmann, head of the political affairs department at the repre­sen­tation office. Dr Katrin Böttger, deputy director of the Institute for European Politics, moderated the discussion.

In his lecture, Hirte stated that the USA does not feel itself to be culturally and econom­i­cally tied only to Europe, but will also concen­trate on its Pacific sphere as well. For this reason it is important for the EU to rapidly implement a transat­lantic free trade agreement with an effective decision-making system. With regard to the current criticism of TTIP and, in particular, of the private arbitration courts, Hirte explained that trade agree­ments that protect investors using such a legal system are not novelties, but rather have already been common practice in Europe for some time. The heavy criticism, above all in German-speaking Europe, can also be traced back to a latent anti-Ameri­canism, according to Hirte. However, he did agree with critics that the planned arbitration court proceedings would not be suffi­ciently trans­parent. In order to increase societal trust in the legal system, more trans­parency would need to be achieved and hitherto closed court proceedings would increas­ingly need to be opened to the public. Furthermore, Dr Hirte recom­mended that Investor-State Dispute Settle­ments be more strongly inter­locked with national courts. In addition, he brought into consid­er­ation that small and medium-sized enter­prises (SMEs) may require state subsidies to cover the cost-intensive arbitration court proceedings. Through legal subsidies, SMEs, which form the backbone of the German economy, could be substan­tively supported. Additionally, he empha­sized that disputes between American and European companies could only be settled through cross-national insti­tu­tions, as the national legal systems are not in a position where they can judge neutrally.

In order to counteract the scepticism of many European citizens, it must be deter­mined if the TTIP negoti­a­tions will remain the sole prerog­ative of the EU, or whether they will be negotiated with the cooper­ation of national govern­ments. This is important, said Hirte, in order to provide clari­fi­cation to the public. He also empha­sized, however, that even if the negoti­a­tions were entirely the respon­si­bility of the EU, the agreement would still be suffi­ciently democ­ra­t­i­cally legit­imate because there is enough scope for influence on the proceedings by EU member states.

On several occasions, Dr Hirte empha­sized the positive effects of free trade through economies of scale, division of labour, and efficiency gains. Although the reduction of trade barriers would undoubtedly lead to welfare gains and better consumer satis­faction, he said, it is a historic trend that nation states have always tried to counteract the workings of free trade. Dr Hirte indicated that he could completely under­stand the fears of TTIP leading to a decrease in quality standards, partic­u­larly in the food sector. However, he said that there exists a miscon­ception in Germany that American standards are generally below the level of their European counter­parts. As it turns out, there are many American product regula­tions, even in the consumer goods sector, that are signif­i­cantly more strictly formu­lated. In general, harmo­nized standards and increased compe­tition are always in the interest of the consumer, said Hirte.

In the lively discussion which followed, the public was inter­ested above all in how TTIP is perceived in the USA and in what aspects of the free trade agreement were under critique there. Aside from this, it was also asked whether or not this bilateral trade agreement would hinder the efforts of the WTO to promote free trade worldwide. Dr Hirte explained that it is in the interest of all states to decrease trade barriers worldwide, but that it is incredibly difficult to reach a consensus with all members of the WTO within its own frame­works. Bilateral agree­ments, on the other hand, could be imple­mented more quickly, simply, and effectively.

By: Bodo von Haumeder and Hunter Hampton