TTIP improves legal security and growth

TTIP improves legal security and growth

Trade Associations in the US and Europe are promoting the Transatlantic Trade and Investment Partnership (TTIP) - a trade agreement to be negotiated between the European Union and the US. Germany and Austria are the European countries showing the greatest resistance. Fear is widespread and a number of unsubstantiated arguments are proposed against TTIP, writes Prince Michael of Liechtenstein.

One fear is an erosion of standards. The most striking example - and somewhat ridiculous- was the so-called ‘chlorine chicken’ procedure in the US of washing chicken meat in chlorine. German food regulations do not allow this.

Cecilia Malmstrom, EU Commissioner for Trade, stresses the need to include the high standards in water and medical services, as well as corresponding regulations in areas of food, health, safety and the environment during the negotiations. It has to be borne in mind that the US also has very high standards.

German politicians are also beginning to promote the advantages of TTIP, especially to small and medium-sized businesses and in the regions.

Another issue of concern is that TTIP breaches will be handled by arbitration courts which could work to the detriment of some European countries. This is very bizarre logic.

Arbitration clauses are included in most existing free trade contracts. But it is not the role of a court to defend national interests which are in breach of contract.

Unfortunately, examples exist where national courts - seemingly ignoring the law - have ruled against foreign companies or institutions which wanted to enforce their rights against national entities. This dire experience is especially true in countries where government owns nationalised companies. This practice limits trade and investment as it jeopardises legal certainty and security.

Arbitration courts are better suited to maintain the rule of law.

The advantages of the Free Trade Zone provided by TTIP are vast. It could be one of the triggers - together with efficient structural reforms - to return our economies in to growth in due course.

Rejecting TTIP is a path to more protectionism. We know that protectionism is toxic to society’s progress, innovation, well-being, and the economy in the medium and long term. Competition is the key.

Related reports:

TTIP assures Europe’s place in global trade

Europe and America as equal partners

Free trade agreements challenged

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