IG Metall Demands Halt To TTIP Negotiations

Detlev Wetzel, President of IG Mettall, Germany

The giant German manufacturing union IG Metall has called for a halt to the current negotations to create a free trade agreement between the European Union and the USA.

Following hot on the heals of US Senate majority leader Harry Reid’s announcement that he will not support President Obama’s “fast track” proposals to drive through a “take or leave it” agreement the new leader of IG Metall Detlef Wetzel has told the German press he is demanding an immediate halt to TTIP negotiations. Wetzel says the TTIP negotiations pose a lot of risks for consumers and workers, and described the agreement “dangerous”.

The announcement is another serious blow to TTIP as IG Metall has 2.4 million members in Germany.

Wetzel says that the agreement does not have any noticeable benefit, but would rather be able to do much damage. He does not give much credence to the optimistic growth figures by the European Commission – and the Swedish Government – uses, and points out that no previous free trade agreements have been able to live up to this kind of over-optimistic forecasts. urthermore, he argues that even if the predictions are correct, so the increase is ridiculously low. It’s about a CAGR of 0.05 % over ten years. “The weather plays a more of a major role in employment than this FTA”.

The job figures presented by the Bertellsmann Foundation, he calls “pure speculation”. IG Metall is also critical to the Investor State Dispute Settlement (ISDS) and the effect on how taxpayers who could suffer and how the mechanism undermines democracy and sovereignty. Wetzel points out that IG Metall do not mind the tariff cuts, but that the agreement is about so much more, and that process has not been transparent. He called for negotiations to be discontinued and a wider debate begin.

Read the full interview from Frankfurter Rundschau March 4th IG Metall

President Detlef Wetzel is worried there will be repercussions on employees and consumers when the EU and the US create a free trade zone.

It is the joint mega project of the European Union and the United States: A joint free trade zone, a joint economic space is to be created. The number of its opponents is increasing steadily. And now we get word from the biggest labor union in the world. IG Metall President Detlef Wetzel explains in an interview with the Frankfurter Rundschau, why he demands for the negotiations to be stopped immediately.

Mr. Wetzel, the negotiations about a transatlantic trade and investment partnership (TTIP) between the EU and the US have been going on for months. Why does the IG Metall speak out now?  

The exact contents are negotiated in backdoor dealings by a small group. This is why we want for this issue to get the attention of the public that it deserves. The discussion did neither really take place among the political parties, nor among the labor unions or the employers. Secondly, we think the agreement is dangerous: It does not have a recognizable use but would cause a lot of damage. The negotiations have to be stopped.

You represent employees from an industry that is dependent on exports. But according to projections, in particular companies relying on export shall profit from the free trade agreement. The Bertelsmann Foundation in its often quoted study comes to the following conclusion: The agreement creates 160,000 new jobs out of which 85,000 are in the manufacturing industry.

These kinds of projections are like reading the tea leaves Nobody can, with the help of the planned measures, calculate the exact economic growth for decades. Especially since the Bertelsmann study dubiously only calculated growth but not the possible negative effects. For the whole of the EU an additional economic growth of 0.5 percent has been predicted. But this means: 0.5 percent of growth over 10 years. I must insist: The projections are extremely uncertain and the predicted effects are microscopically small – especially since they have been bought at a high price.

What do you mean?

For instance the plans to grant extensive protection for the investors. These protections have actually been excluded from the negotiations ….this does not mean that they are off the table. And they are threatening. Because they would give foreign investors the right to file charges against the decisions of countries that lower the profitability of their investments. There is the case of a French company that fights against the increase of the minimum wage in Egypt. In Germany the Swedish corporation Vattenfall fights against the nuclear phase-out. If the investors win the case, they will have to be indemnified by the tax payer. This is expensive – and it undermines democracy and the sovereignty of the state.

But national politics can make an investment non-profitable indeed ….

Naturally, but it is their right. I would like to make this clear with an example: the elimination of Apartheid in South Africa certainly made investments more expensive because exploitation was not possible to the same extend any longer. It would be absurd to forgo such political decisions. Agreements on the protection of investors can be done in countries with an underdeveloped legal system. This way investors can be protected against expropriations made without compensation. The huge volume of investments between the EU and the US shows the obvious: investments in these areas are protected against random expropriation. This means that there is absolutely no need for action.

Would you be happy if the investors’ rights remained excluded?

No. Because we have the impression that the goal of the negotiations is very intentional. It seems to be all about simplifying procedures and lowering products’ standards, just in order to lower the costs for the companies.

Officially the negotiations are not about a decrease but about the adjustment of different standards in Europe and the US. Since this is the case couldn’t we just fight for the rules with the highest standards to be applied?

It would be nice if it worked this way. If such a contract were to be presented we would reconsider our reluctant stance. But if only the protection of the consumer and employees’ rights is going to be decreased, IG Metall will say No. But this is what it is going to be about: It is only about lowering the protective mechanisms for consumers and employees.

Why would employees be affected? Their rights are not part of the negotiations.

The pressure would build up indirectly because liberalization is always accompanied by the intensification of competition. The competition gets tougher, in this case the competition between Europe and the US where the workers’ rights are significantly weaker and the unions are partly under massive attack by politicians. And then there is very much the question if for instance the German rules of co-determination are going to be attacked inside a free trade zone.

It has been highlighted that the TTIP is necessary nevertheless in order to strengthen Europe and the US against the increasing power of emerging industrialized nations…

This supports my concerns: in the future EU-USA zone costs and standards will be lowered to a level that can compete with the Chinese. Why would anybody want that? This is why we want to stop the negotiations immediately.  First the whole process needs to be made transparent and the consequences need to be evaluated. We are not opposed to the dismantling of tariffs because this can be negotiated and decided separately if a country thinks it can spare the income.

You are worried about a race to the bottom. As a matter of fact this race is happening already within the EU. In the face of the crisis this is where employees’ rights and wages came under massive pressure, especially in the South of Europe. More “competitivity agreements” are planned between the EU and its member countries. Isn’t this what puts a lot more pressure on workers?

This is right. We reject these politics within the EU countries as well as the liberalization agreement between the EU and the US. We also see an opportunity here to advance the debate about social priorities: Is lowering the costs all this is about? Do we want to relinquish safe products, the protection of the environment, democratic procedures and social welfare? Neither within Europe nor within the TTIP should a few benefit from the burdens of many people.

Interview by Stephan Kaufmann