Ambassador Gardner: TTIP is a tool to shape globalization

The Transatlantic Trade and Investment Partnership (TTIP) is a way for the United States and the European Union to shape globalization, said Anthony Luzzatto Gardner, the ambassador of the United States to the European Union, in an interview granted to AGERPRES.

“TTIP would be a way for us to shape the process of globalization by setting high standards that would be applied across the world. If we don’t seize the opportunity in this agreement to shape world trade, others will do it, in a very different way, and probably by setting standards at a much lower level. “, said Gardner.

In his opinion, the partnership between the United States of America and the European Union “is critical in dealing with nearly every imaginable global crisis today”, and the TTIP, although obviously related to trade, is also a “tool” for job creation in Europe and the United States, and will also strengthen trans-Atlantic relations.

The diplomat also spoke of the issue of genetically-modified organisms in Europe, of the influence of the Volkswagen scandal on the negotiations, of the demonstrations in Brussels against the TTIP, the negotiations between the sides involved, the influences that the agreement may have on economies, as well as the losses and gains that could occur as a result of the agreement.

AGERPRES: Why is the USA so interested in the TTIP partnership?

Anthony Luzzatto Gardner: The US-EU partnership is critical in dealing with nearly every imaginable global crisis today. TTIP should be considered as one of the tools that we have to strengthen that partnership. It is obviously about trade which is important, we think it’s a tool to create jobs and to create growth in Europe and the United States but it’s not just about trade, this is also about geopolitics, it’s about strengthening the t rans-Atlantic partnership, something that Romania knows and appreciates, it’s been a steadfast partner for many many years. This is also about shaping globalization and I mention that point because it’s a very important point that people often overlook.

Some people fear, although not in this country but in other countries, that TTIP will be an active vote to speed up globalization. It’s not true. Globalization is a fact of life, you can’t choose it. TTIP would be a way for us to shape the process of globalization by setting high standards that would be applied across the world. If we don’t seize the opportunity in this agreement to shape world trade, others will do it, in a very different way, and probably by setting standards at a much lower level.

AGERPRES: How will it help Romania?

Anthony Luzzatto Gardner: Well, later on today, as I understand it, there will be a fact sheet distributed with some concrete examples of success stories in Romania. I read them with interest and what struck me about this fact sheet is that these companies come from many different sectors: pharmaceuticals, automotive supply chain, furniture, wines, spirits, and in other sectors. That’s the first. And the second thing that struck me is that these are not just big companies, in fact most of the companies on this sheet are small or medium-sized companies who have found a way to break into the US market and be successful, so it shows that even small Romanian companies can be successful; this agreement would actually make it easier for them to be successful, to grow faster. The third point is that even companies that are not selling to the US market today, or who wouldn’t actually be selling in the US market in the future might still benefit, because they are part of a supply chain where they are selling to companies, larger companies, here or in Europe, that are selling to the US market, so they would benefit indirectly.

So small and medium-sized enterprises will benefit, in particular, we think, from this agreement because of what we call trade liberalization, reducing customs barriers, trying to reduce the differences in standards that make it difficult for small companies to understand what the regulations are and to adapt their manufacturing processes to be able to sell to the US market. Those are really important points – it’s not just for big business.

AGERPRES: But from what I understand, European people are afraid of genetically-modified food. Isn’t this a problem?

Anthony Luzzatto Gardner: I’m glad you asked that question because this agreement has nothing to do with genetically-modified organisms [GMO]. We are well aware of the sensitivities that exist here and in many countries of the European Union about GMOs. There will be nothing in this agreement about GMOs, we don’t want to force European consumers to eat foods that they don’t want to eat. Consumers are absolutely free to do what they wish. Same thing for hormone-treated beef. We don’t want to force European consumers to eat hormone-treated beef. A totally separate issue that will be in this agreement is what we call sanitary and fitosanitary standards, and also ensuring that science is respected in the way that Europe and the United States make decisions. Our main concern is that in some of its decisions, the EU is not respecting the advice of its own scientific bodies, including the European Food Safety Agency – EFSA – which has made rulings that are ignored for political reasons. There, I think, we have a legitimate concern because a core principle of free trade is that non-scientific based political decisions should not be used as a way to block trade.

AGERPRES: The Volkswagen issues have started in the US. Doesn’t this put a block in signing this agreement?

Anthony Luzzatto Gardner: It doesn’t help, for sure. I mentioned one of the core things we are trying to do is cooperate on certain sectors, including automotive, for automotive safety standards, and we are also trying to agree on the way we make regulations, so the principles of regulation setting. With regard to automotive sector standards, it’s true that this VW scandal doesn’t help because we’ve spent time trying to argue that our standards of protection are basically high on both sides of the Atlantic and are equivalent. That argument has unfortunately been weakened by this scandal but I still think it’s still absolutely true to say that if you look at the world as a whole, the EU and the United States have the highest protections of any region and in most cases are very very similar, including in automotive. That doesn’t mean it’s going to be easy to set the same types of standards because the way we go about setting standards is different today. We have different ways of achieving the same results.

The second important point which the VW scandal revealed is that it’s not just important to have high standards, it’s important to apply those standards and here we saw, unfortunately, a failing.

AGERPRES: How do you convince the other countries that don’t want to sign this agreement? And when do you think it will be signed? This year, next year? Because we have talked for some time of this TTIP…

Anthony Luzzatto Gardner: No one knows the answer to that question, but what I can tell you is that this administration remains absolutely committed to working every day of its mandate, which expires 20th of January, 2017, at noon. We are going to work every day until that date to see if we can come to an agreement, we think it’s still possible; time is short. There are still a lot of people who need to be convinced and we need to find, frankly, better arguments to convince the skeptics. Some of those skeptics will never be convinced because their criticisms have nothing to do with this agreement. I am convinced that many of the skeptics don’t like free trade. For those skeptics there is nothing we can say to change their minds, because if you don’t like free trade, you’re against this agreement. Some of the skeptics may be motivated by anti-Americanism, although I don’t believe it’s a major cause of the opposition, and to those skeptics there is very little that I can say but those who are open-minded, I think they will see, as time goes by, that this agreement will, as I said, not only result, we think, in jobs, higher-paying jobs and in growth, but will be important to do so in a way that respects high standards for consumer protection, environmental and safety, and is absolutely critical to building a trans-Atlantic partnership, that I mentioned at the beginning.

AGERPRES: Some European officials say that USA has an air of superiority in these discussions. How do you feel it from your side?

Anthony Luzzatto Gardner: Well, I’ll be honest, I haven’t seen it. These are difficult discussions, there’s no doubt about it, we shouldn’t hide that fact. These are the most ambitious trade negotiations we’ve ever tried to reach, on either side. These are two big economies, very complex, and we have some real points of difference between us and we shouldn’t hide them. The extraordinary thing is that most of the arguments so far have been about issues that are of secondary importance, or, in fact, are totally peripheral. It’s a shame because it’s distracted attention first from the positive of this agreement and second, it’s distracted attention from the points of difference. On either side there are points of sensitivity, whether it’s audiovisual, or geographical indicators, or government procurement, or maritime services. There’s a range of tough issues and I think we can get through all of them.

AGERPRES: People are afraid that big companies will come here and will take over the major player here. Is this point under discussions now?

Anthony Luzzatto Gardner: I’ve traveled to most of the 28 [member states of the EU], I’ve spoken maybe 70 times on TTIP, I’ve heard a lot of concerns, one of the concerns is, as you mentioned, “Europe can’t compete” or “the United States companies are bigger, have a lower cost of production” whether it’s in agriculture or otherwise, but generally those criticisms are much too general. We could have a discussion about this for hours but the first point, I would say, is that it’s never an answer for an economy to close in on itself and to ignore the world, to ignore globalization. It only leads to a loss of competitiveness over time. Free trade agreements will, of course, lead to some dislocations, some loss of jobs, of course they do, they always do, but, we know from our history, and the EU knows from its own history, through its agreement with South Korea, we know through NAFTA – all of the leading authorities, experts, agreed that there was a net increase in jobs in the United States through NAFTA. There was a loss, but the new jobs that were created not only offset the loss in jobs but created net new jobs that were higher-paying, on average. On that there is agreement, and if you look at the website of the European Commission you will also see that in the three years since the signing of the South Korean Free Trade Agreement, which was the last big one they did, the same thing occurred. There was some dislocation, but a net increase in jobs, a net increase in exports. So the argument is positive for the competitiveness of the European industry.

Some companies in the United States are, of course, very large, but there is a mischaracterization as well because even in agriculture, most, the vast majority of our companies are small, even family-owned, or medium-sized. So to say these are huge conglomerates that are going to wipe out their competitors is not right.

The last point I would make is that, and you see this for European agriculture, Europe is competitive today and I’ll give you an example: Europe has a huge trade surplus with the United States in agriculture, Italy has a huge trade surplus with the United States in agriculture. Why? Because the growing middle-class in the United States has learned to appreciate high quality products that have also a link with a certain culture and a history and command a higher price in the US market. And those who said that Italian producers, small Italian producers can’t compete have been proven wrong. They’re doing tremendously well, in wines, in cheeses, in beers, and I think the same would be true for Romanian producers – they may be small, but if the product is of a high quality and the brand is appreciated in the United States they should do quite well.

AGERPRES: In what regards the EU-FTA agreement, we haven’t seen in Romania such a high impact as was initially announced. Won’t the same thing happen with the TTIP?

Anthony Luzzatto Gardner: You’ll see these success stories and I think there could be many more success stories, in Romania, of this type. These success stories exist even without a free trade agreement, what I am saying is that the free trade agreement should help them and should help others. We’ve been very careful in avoiding any specific prediction of how many jobs will be created, because we just don’t know, the agreement doesn’t exist yet, but, to repeat, we do know from history that free trade agreements have been a net positive for everybody. Free trade is a net positive for everybody and I think it will be the same for Romania.

AGERPRES: How do you see the manifestations these days in Brussels? Do you believe they will happen in other countries also?

Anthony Luzzatto Gardner: Most of the demonstrations have been focused in a few countries, in Germany, Austria, and we’ve seen this vote in the parliament of Wallonia, in southern Belgium, a few other votes, but let’s, again, focus on the bigger picture. If you look at the degree of support generally, across the 28, it’s still very high. Again, Germany is an outlier, but look at the German government, both main parties, well the CDU-CSU and the SPD, are in favor of this agreement. All the governments, all the 28 government have expressed, repeatedly, approval for this agreement in the Council, even in Austria, and we think that when they see, when parliaments have to vote on this agreement, they will see that it’s a good deal so I am pretty optimistic actually, I’m not too troubled by these street demonstrations because most of the criticisms are, frankly, about issues that, as I said, are not being discussed, they are fears that we are trying to address. There will be some fears of issues that are in the agreement, but I think even there we can get people comfortable. AGERPRES