US Commerce Secretary on TTIP 'Our Administration Wants a Deal This Year'
As she visits Germany with US President Obama, Commerce Secretary Penny Pritzker is making a push for the TTIP trans-Atlantic free trade agreement. "Our administration wants a deal," she says in an interview, at the same time defending secrecy.
SPIEGEL ONLINE: Ms. Pritzker, you are visiting the Hanover Messe, the world's largest industrial fair, together with President Obama on Monday. The United States is the official partner country at the fair this year. What makes the industrial cooperation between Germany and the US so special?
Priztker: The Hanover Messe is more than just a trade show for us. While it is an opportunity to spotlight the engine of both of our economies' future -- advanced manufacturing -- President Obama's participation is really a reflection of how highly our country values the trans-Atlantic commercial partnership. It is also a reflection of the deep and abiding friendship between the US and Germany in particular, rooted in our common values, and anchored in our shared leadership on the world's most pressing challenges. So this is a significant opportunity for us to advance not only commercial issues, but also the future of peace, progress and prosperity for our two countries and the entire world.
SPIEGEL ONLINE : Industry has changed quite dramatically over the last years on both sides of the Atlantic, mostly because of digitalization. What can we learn from American industry, and what can you possibly learn from ours?
Pritzker: In the US, we have created advanced manufacturing institutes that are modeled after the Fraunhofer Institute concept in Germany. These institutes are designed to keep American manufacturing on the cutting-edge of innovation. President Obama announced his vision for these institutes -- we call them the National Network for Manufacturing Innovation (NMI) -- in 2012. The first institute had a focus on additive manufacturing and 3D printing. What began as a group of 40 members -- including companies of all sizes, research universities, community colleges and non-profits -- has since brought together the expertise of more than 160 partners working with that first institute alone. There are now eight manufacturing institutes up-and-running, each of them started with federal seed money that has been matched by non-federal funds. A $600 million federal investment has catalyzed more than $1.2 billion in non-federal funding for NNMI. Another area in which we are learning from each other is in workforce development. The United States and Europe both face the challenge of a skills mismatch, and we both must ensure that our workforces are trained for the 21st century. Helping our workforce gain the skills they need to compete is incredibly important as industry advances.
SPIEGEL ONLINE : There have been record numbers in trade in recent years, but at the same time public support for trade agreements seems to be at a historic low in Germany as well as in the United States. What are the reasons for that from your perspective?
Pritzker: I think we have to do a better job of educating our peoples about the importance of trade. We need to make sure that folks -- Germans and Americans -- understand the extent to which our economies depend upon having robust trading relationships around the world.
SPIEGEL ONLINE: There has been trouble getting the planned trans-Atlantic free-trade agreement TTIP off the ground because of massive public skepticism. German Deputy Chancellor Sigmar Gabriel recently stated the negotiations have "frozen," and he expressed doubts that your administration still wants a deal. Is he right?
Pritzker: Our administration wants a deal, and we'd like to get it done this year. The reasons we need TTIP are significant.
SPIEGEL ONLINE: Can you describe them for us?
Pritzker: First, the world is changing very fast -- economically, geopolitically, technologically. Trade agreements are how we can shape the forces of change taking place in the world. TTIP is a geostrategic choice to strengthen the trans-Atlantic bonds between two regions that share the same high values and standards. Together, the United States and the European Union can set the rules for trade in the 21st century. We can ensure that the global economy fosters free and fair competition, and reflects our interests and democratic values by incentivizing countries to pay a fair wage, develop safe workplaces, protect consumer health and safety and strengthen environmental rules that we help set.
SPIEGEL ONLINE: Many consumers fear that the agreement will mainly serve to reinforce the market power of major corporations.
Pritzker: Of course, TTIP will also make it easier for the US and the EU to grow our already robust commercial relationship. To put our economic relationship in context, the US and the EU represent 40 percent of the world's GDP. Today, we trade about $3 billion (2.7 billion) a day in goods and services. We've invested $4 trillion in each other's economies. There are 14 million jobs together in trans-Atlantic trade. One of the challenges we have is that today, between the US and the EU, we have 50 million small- and medium-size businesses, but only 260,000 of them engage in trade across the Atlantic. TTIP can help us improve on that figure, strengthening our trans-Atlantic economic bonds. Another tremendous opportunity presented by TTIP is the chance to deal with rules and regulations that are standing in the way of doing more business together. Frankly, duplicative regulations and things as simple as paperwork are prohibiting our small- and medium-size businesses, which are often our greatest innovators and job creators, from engaging in more trade.
SPIEGEL ONLINE : But the truth is that it is not seen as a potential win-win in our countries. When you look at the US and Germany, TTIP is extremely unpopular in both our societies. Many people worry that standards in areas like labor and health will be eroded. In Hanover, thousands of people are protesting on the streets against the agreement. What is your message to the protesters?
Pritzker: I think we have to educate people about the benefits of trade. Trade is a job creator. Together, through a trade agreement like TTIP, the US and the EU can create the highest standards in the world on labor and the environment, for example. There is so much opportunity. A lot of frustration today, I think, is not because of trade. It is because we have this rapid change economically, geopolitically and technologically, and we have to help our people adapt. We have to help our populations deal with the fact that we live in a globalized world and that digitization is here to stay, for example.
SPIEGEL ONLINE : Do you think that the German government needs to do a little more to promote the benefits of the agreement?
Pritzker: All of us have to. And frankly, I think it's really incumbent upon the German government and Germany industry, the same way it's incumbent on the US government and US industry to explain to our peoples the benefits that we already realize by trading together and the opportunity that is created by TTIP. I don't think we've done a good enough job of that.
SPIEGEL ONLINE: Many Europeans are frustrated by the lack of transparency in the negotiations. Can you understand that frustration?
Pritzker: In the United States, we consult consistently with our Congress, the people's elected representatives, to craft our proposals and discuss the negotiations. Members of Congress see every text before we table it in the negotiation. We also consult with a number of stakeholders who are on our advisory committees to make sure we are not negotiating in a vacuum. Our advisory committees comprise nearly 600 private citizens, including representatives of companies, labor unions, environmental organizations and consumer groups. Getting to an agreement that will be a win for both sides requires a certain amount of discretion. In a trade negotiation, we must balance transparency, a principle the United States holds dear, with the confidentiality necessary for negotiators to share information and have frank conversations that are essential to concluding trade agreements.
SPIEGEL ONLINE : There's a lot of skepticism in Berlin over whether TTIP negotiations can actually be completed by the end of 2016. Do you still expect a final agreement before next year? And what will your government do to lead to a successful end to the talks?
Pritzker: US Trade Representative Michael Froman and EU Trade Commissioner Cecilia Malmström are working very hard to achieve that very ambitious goal. They have set out timelines, deadlines and meetings so they can meet this objective. That is doable because there are a lot of benefits for both the EU and the US. At the end of the day, though, it is going to require that we deal with the challenging issues.
SPIEGEL ONLINE : One of the most challenging issues is dispute settlement -- the private arbitration tribunals where investors could sue if they felt disadvantaged. The European Commission has instead proposed the idea of an investor court with independent judges to make the system more transparent and objective. Is that a plan that your administration can agree to?
Pritzker: With respect to our basic objectives for investment rules in TTIP, we and the EU are on exactly the same page. We both believe in the importance of strong rules and dispute resolution procedures to protect investors, and we both believe in the importance of writing these rules and procedures in a way that protects public interests and safeguards against abuse. We have only just begun to discuss the EU's proposal on investment. I think it is fair to say that we have some questions about the details, particularly in light of our own very successful experience managing investor-state dispute settlement (ISDS) cases. But I am confident that we will be able to come to an outcome that achieves our shared objective of protecting investment while safeguarding the public interest.