A badly understood project. The first imperative is to revise the terminology. The German project that Angela Merkel presented to George Bush last week is not aiming to set up a common market, nor a free trade zone between the USA and the European Union, as too much of the media has superficially interpreted, is even less of a goal. The contrary is true. The German project explicitly rules out customs duties or any further opening of the border from its remit, and focuses on coordination and harmonisation as a means to break down artificial barriers to cooperation and trade. The German programme for its presidency's term in office indicates that the initiative on the transatlantic partnership will focus on regulatory cooperation, innovation and technology, product safety, capital markets, energy and the protection of intellectual property.
In an interview in the “Financial Times”, Angela Merkel, on the eve of going to Washington, announced nothing but her intentions (already partly mooted during the previous Presidency). The summary published in EUROPE 9336 was clear from the outset, with its title, “Transatlantic partnership based on harmonisation”. The article by Emmanuel Hagry explained the contents of the partnership, “Ms Merkel is not counting on a new wave of tariff barrier liberalisation on either side of the Atlantic, but does intend, on the other hand, to help create a single transatlantic market for investors with common rules and standards on crucial issues, such as intellectual property and financial market regulation.” Blunders by the media began with the reports about the Washington meeting. Agence EUROPE was right to highlight the points cited by the German Chancellor in her press conference, where it looked at the most visible aspects of the project: financial market regulation mechanisms, uniform technical standards (using the motor vehicle sector as an example), protection of intellectual property rights, anti-trust legislation.
Merkel and Bush agreed that a joint working group would explore how to push this project forward, and the Chancellor acknowledged that this would be a “difficult task” because it would be necessary to discuss difficult issues such as patent protection and financial markets. But Agence EUROPE's rigour was not practised across the board. Using sensational headlines, a number of journalists spoke about a Euro-American free trade zone, while others got mixed up about an extended market governed by uniform rules and a common market where trade is totally freed up.
Implications. In the Financial Times report, George Bush's overall silence is put down to three reasons: a) the technical difficulty of getting rid of non-tariff barriers; b) the growing opposition to free trade in the US; c) the failure of the former similar European Commission project that failed due to France's misgivings about opening up the European agricultural market. The two last “reasons” do not hold water because, there is no mention of free trade in Merkel's project; the opening up of the agricultural markets is not even mentioned in it (even the Commission's project excluded agriculture). Free trade implications in the London newspaper became overt when it published a violent attack on 8 January (signed by Wolfgang Munchau) against the German project, criticising it for not containing any progress on free trade and therefore, according to Munchau, containing no benefits to consumers. Germany was accused of having simply taken up the demands of the lobbies, and its project, involving negotiations on intellectual property, stock exchanges and hedge funds, was compared by Munchau to the Tobin Tax on financial transactions.
Unlikely but in the right direction. We are once again able to see and hear the voice of those who want free trade without rules or conditions. What I, in fact, find interesting in the Merkel project is precisely the intention to introduce common discipline and rules of the game that will allow trade to be fluid and fair. I don't think that this project, as it was presented, can result in anything because we know only too well in Europe to what point an extended united market requires an institutional framework: supra-national bodies for making decisions and a Court of Justice. Who can imagine the US Senate backing down on a decision made by the European Commission? Partial advances are, however, possible in the Euro-American project. The German project goes in the direction of international rules which could result in a form of global economic governance.
(F.R.)