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EUROPE POLICY PAPER 2/2015

FRANCES UNEXPECTED ROLE ON THE WAY


TO A REASONABLE AND BALANCED TTIP
GUILLAUME XAVIER-BENDER

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On the cover: National Assembly of France. Freepenguin/Wikimedia

Frances Unexpected Role on the Way


to a Reasonable and Balanced TTIP
Europe Policy Paper
June 2015

by Guillaume Xavier-Bender1

Policy Challenges and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1


Frances Early Narrative and Positioning on TTIP . . . . . . . . . . . . . . . . . . . . . . . 2
The Politicization of TTIP in France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Public Opinion on TTIP and Organized Interests . . . . . . . . . . . . . . . . . . . . . . . 7
From Process to Substance: The Case of Investment Protection . . . . . . . . . . . . . . .11
TTIP and Frances Embryonic Economic Diplomacy . . . . . . . . . . . . . . . . . . . . .13
Moving Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Guillaume Xavier-Bender is a transatlantic fellow in the Brussels office of The German Marshall Fund of the United States.

Policy Challenges
and Recommendations

Policy Challenges

Policy Recommendations

he Transatlantic Trade and Investment


Partnership (TTIP) between the European
Union and the United States might never
see the light of day. Two years after the start of
the negotiations, the focus of attention has shifted
from Brussels to the member states, where strong
popular and political skepticism is casting doubt
on the ability of European leaders to convince the
European Parliament, and very likely national
parliaments as well, of the necessity of ratifying
the agreement in due time. In many countries,
such as in France, concerns are being raised over
the kind of economic and social relationship
that Europeans would like to have with their
U.S. partners. Ratification of the agreement will
therefore depend primarily on how European
governments address these concerns. In France, the
debate over TTIP has increasingly been politicized,
spilling over into a broader rejection of any kind of
greater integration with the United States. While
perceptions of the United States remain favorable
in France, there is lingering cautiousness when it
comes to preserving French exceptionalism, and
Frances strategic independence. The combination
of traditional weariness to economic openness and
globalization, a stagnant economic recovery, and
strong principled positions on social and labor
acquis have fashioned an expectation that France
might obstruct the conclusion of TTIP. Such
cautiousness by the EUs third largest economy
blurs the lines on what its true intentions are when
it comes to signing a reasonable and balanced
agreement with the United States. There is a risk
that the French government may fail to convince its
people of the benefits of the agreement, and of the
Parliament of ratifying it. In so doing, France would
miss a unique opportunity to establish itself as a
leading voice in shaping the EUs future trade and
investment policy.

The French government, like every other EU


member state government, should actively
engage in the public debate to limit growing
misperceptions of TTIP, encourage fact-based
discussions about the negotiations, and at the
same time clarify its own public messaging when
it comes to politically sensitive chapters of the
agreement. The time might be right for the prime
minister or the president to clearly state both what
France aims to gain and what it hopes to protect
in signing TTIP. In addition, Frances specific
positioning in Europe on preserving the acquis,
its special relationship with the United States, and
its growing ambitions in economic diplomacy and
economic security could mitigate the growing risks
of failure of TTIP. As unexpected as it might have
seemed at the start of the negotiations, France
now finds itself in a position where it can act as a
facilitator between the EU institutions and other
member states in order to push for the conclusion
of a reasonable and balanced agreement. While
commentators expected the more pro-free trade
Berlin to deliver Paris in the last moments of the
negotiations, perceptions of TTIP in Germany give
little margins of maneuverability to the German
Chancellery. France should seize this opportunity
to drive discussions on a more conciliatory and
flexible agreement, and at the same time build a
leadership role in designing the future of trade and
investment policy in Europe.

Frances Unexpected Role

Frances Early Narrative


and Positioning on TTIP

A
While France seemed
to be a possible thorn
in the Commissions
ambitions at the start of
the negotiations, there
are reasons to believe
that it could actively
help the EU in delivering
on TTIP.

lmost two years after the start of the


negotiations for a Transatlantic Trade
and Investment Partnership (TTIP), it
is still unclear whether the United States and
the European Union will eventually conclude
a successful agreement. What may constitute
success in this regard is increasingly influenced by
internal debates on TTIP within EU member states.
When EU member states gave a mandate to the
European Commission to start trade negotiations
with the United States on June 14, 2013, many
commentators agreed that the wheeling and dealing
with EU governments and discussions within
members states might prove as challenging as actual
negotiations with the U.S. trade representative.
With lingering skepticism over TTIP in both
Germany and the United Kingdom, France might
have a greater role than expected in ensuring that
any final agreement meets the original intention
of the negotiations, one which neither threatens
Europes safety, health, social, and data protection
standards, nor jeopardizes our cultural diversity.1
While France seemed to be a possible thorn in
the Commissions ambitions at the start of the
negotiations, there are reasons to believe that it
could actively help the EU in delivering on TTIP.
Indeed, domestic debates about the process of
the negotiations, the substance of the agreement,
and its geostrategic implications provide valuable
indications on how member states in general could
contribute in part to a successful TTIP.
By taking a strong stance on what TTIP should
not be and which sectors it should not cover, the
French government early on placed itself in a
much more comfortable position than that of other
European counterparts. In addition, by looking
at the agreement as an economic opportunity for
1
Jean-Claude Juncker, Mission Letter to Cecilia Malmstrm,
Commissioner for Trade, European Commission, November 1,
2014, http://ec.europa.eu/commission/sites/cwt/files/commissioner_mission_letters/malmstrom_en.pdf.

the country, it has so far avoided tricky domestic


discussions over the strategic significance of a
stronger transatlantic relationship. Indeed, a
specific focus on the economics of the agreement
allowed for sidestepping a generally instinctive
caution toward strategic alignment with the United
States in the French political elite. Yet paradoxically,
Paris might have played its best cards too early.2
In June 2013, it took 13 hours of negotiations
between EU leaders to navigate the French threat
of a veto if the principal of cultural exception3
were not taken into account when it came to TTIP.
Then French Culture Minister Aurlie Filipetti
affirmed the governments stance when she stated
that we cannot abandon culture to the blind
laws of the market! This means, on the economic
policy front, to put in place strong regulations in
order to allow for the greatest possible diversity
of expressions.4 A mix of defensive interests and
offensive principles, this position was backed
by 13 other EU culture ministers.5 Eventually,
audiovisual contents were excluded from the
European Commissions mandate to negotiate
TTIP. Embracing its victory, Paris was quick to
2
Jean Quatremer, Exception culturelle, lart qui cache la
fort, Libration, June 18, 2013, http://www.liberation.fr/
economie/2013/06/18/exception-culturelle-l-art-qui-cache-laforet_912011.
3
Through cultural exceptions, countries provide special
support to domestic industries they consider culturally sensitive, such as through broadcasting quotas, subsidies, and local
content requirements. These measures can limit market access
to such industries for foreigners. In Shayerah Ilias Akhtar and
Vivian C. Jones, Transatlantic Trade and Investment Partnership (TTIP) Negotiations, Congressional Research Service,
February 4, 2014, p. 21, http://transatlantic.sais-jhu.edu/publications/CRS_TTIP_report_Feb_2014.pdf#page=21.
4
Aurlie Filipetti, La France, fer de lance de lexception
culturelle face au march libre, Le Monde, June 13, 2013,
http://www.lemonde.fr/idees/article/2013/06/13/la-francefer-de-lance-de-l-exception-culturelle-face-au-marchelibre_3429051_3232.html (authors translation).
5
Filipetti went on to say: this is a European debate, a universal
ambition, a non-negotiable conviction: France will do what it
takes to defend this ideal.

The German Marshall Fund of the United States

signal that it had stood up to both the EU and the


United States in making sure that its traditional
stance on cultural services and products would
be protected from any rapprochement with U.S.
regulations and standards. France had, to its great
satisfaction, fought and won a fight before the battle
even began. Although audiovisual products are not
entirely excluded from the negotiations (according
to the Council conclusions, the Commission will
have the opportunity to make recommendations on
additional negotiating mandates),6 they are a red
line that the European Commission will most likely
not want to cross as opposition to TTIP grows
across Europe.
With this feat, France positioned itself early on as a
if not the guardian of Community acquis7 and
high standards. At least, this was the perception
in Paris; other European capitals frustrated with
what they considered more traditional French
stubbornness. In this context, there was hope at the
time from negotiators on both sides of the Atlantic
that the initial German and British enthusiasm in
starting the talks over TTIP would slowly convince
the French of the opportunities of a comprehensive
deal. Yet in Paris, it was believed that the French
public would not have approved of any kind of
mandate without the government having made
a strong stand over principled concerns. In the

first months of the negotiations, this preemptive


positioning might have helped French officials to
convince at least a small part of the population of
the benefits of TTIP.
Since then, the French government has been
steadfast in its support of TTIP. In fact, during
the first state visit to the United States of a
French president since 1996, French President
FranoisHollande did much more than to reassure
his counterpart of Frances commitment to TTIP. In
a joint op-ed published in the Washington Post and
Le Monde on February 10, 2014, Presidents Obama
and Hollande identified the partnership as a
major opportunity to build on millions of jobs on
both sides of the Atlantic [] It would also build
a lasting foundation for our efforts to promote
growth and the global economic recovery.8 By
stressing the need for combined efforts for growth
and jobs on both sides of the Atlantic, the French
president further emphasized the economic benefits
of TTIP rather than focusing the discussion on
strategic and political aspects.

6
Council of the European Union, Press Release 10862/13,
PRESSE 250, PR CO 31, June 14, 2013, http://www.consilium.
europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/137486.
pdf.
7
The Community acquis is the body of common rights and
obligations that bind all the member states together within the
European Union. It is constantly evolving and comprises the
content, principles, and political objectives of the treaties; the
legislation adopted in application of the treaties and the case law
of the Court of Justice; the declarations and resolutions adopted
by the Union; measures relating to the common foreign and
security policy; measures relating to justice and home affairs;
and international agreements concluded by the Community and
those concluded by the member states between themselves in the
field of the Unions activities. Glossary of EU Legislation, http://
europa.eu/legislation_summaries/glossary/community_acquis_
en.htm.

8
Barack Obama and Franois Hollande, Obama and Hollande:
France and the U.S. enjoy a renewed alliance, The Washington
Post, February 10, 2014, http://www.washingtonpost.com/opinions/obama-and-hollande-france-and-the-us-enjoy-a-renewedalliance/2014/02/09/039ffd34-91af-11e3-b46a-5a3d0d2130da_
story.html.

Frances Unexpected Role

France positioned
itself early on as a if
not the guardian of
Community acquis and
high standards.

The Politicization of TTIP in France

T
The government has yet
to find the appropriate
message and channel
to communicate publicly
on TTIP.

here is a clear political cost to supporting


TTIP in France. In the midst of these
dynamics, the French government has been
too timid in providing an adequate platform for
reasoned discussion on the agreement. Occasional
support, expressed by the president or his ministers,
fails to cultivate any debate, and is far from able to
convince both doubtful citizens and policymakers
who might be skeptical of the agreement but
would not necessarily oppose it as much as its
harshest critics. The government has yet to find the
appropriate message and channel to communicate
publicly on TTIP, in a way that does not nurture
negative perceptions of the agreement.
In this regard, national governments and public
institutions bear a responsibility to inform citizens
about the trade agreement. Early on in the process,
the French trade minister created a Strategic
Committee on the TTIP Negotiations, composed
of elected officials, industry representatives,
and economists, to meet every three months to
take stock of the advancement of the talks. This
committee was designed to keep the National
Assembly and Senate informed of the progress
in the negotiations, as well as to provide the
government with adequate input from experts and
stakeholders. Yet it still falls short of providing the
French public with information on TTIP and on
Frances official positions. Interestingly, it is the
National Digital Council (Conseil National du
Numrique) that may have expressed the clearest
public messaging of why TTIP matters: the digital
chapter of the proposed Transatlantic Trade and
Investment Partnership is crucial to the future of
society and the economy.9

9
Conseil National du Numrique, Strengthening EUs negotiation strategy to make TTIP a sustainable blueprint for the digital
economy and society. Opinion of the French Digital Council,
April 2014, p. 3, http://www.cnnumerique.fr/wp-content/
uploads/2014/05/Version-web-ANGLAIS-19.05.pdf.

In a study published in September 2013, the CEPII


(Centre dEtudes Prospectives et dInformations
Internationales) found that trade in goods and
services between the United States and the EU
would increase by 50 percent on average as a
result of the agreement. In this scenario, by 2025,
French imports by volume would increase by 2.5
percent, its exports by volume would increase by
2.6 percent, more than German exports would (2.1
percent). While French agricultural exports would
be slightly negatively affected, the study found that
France is not expected to have more defensive
interests in agriculture than the EU average, but
would have more offensive interests in industry
and would gain slightly more than Germany in
services.10 Overall, the benefits would outweigh
the losses. With projected GDP growth of only 1.2
percent in 2015, an unemployment rate that could
reach 10.6 percent, a public deficit expected to fall
to 3.8 percent, and inflation to fall to 0.0 percent,
the French economy could indeed find some solace
in a successfully concluded negotiation.
But unfortunately for the French government,
since the early stages of negotiations, opposition
to TTIP in France has not been based on
contesting the agreements potential economic
benefits. Despite differences in methodology and
specific outcomes, the majority of studies on the
economic implications of a trade and investment
partnership between the EU and the United States
have concluded that gains would outweigh losses

Lionel Fontagn, Julien Gourdon and Sbastien Jean, Transatlantic Trade: Whither Partnership, Which Economic Consequences?, CEPII, September 2013, p. 10, http://www.cepii.fr/
PDF_PUB/pb/2013/pb2013-01.pdf.

10

The German Marshall Fund of the United States

on both sides of the Atlantic.11 Some studies,


however, point to the uneven distribution of gains
between the United States and the EU, as well as
to possible negative spillover effects for internal
European economic integration.12 In this game of
unconvincing predictions, France comes out overall
as a beneficiary of greater economic integration
with the United States. Yet Paris has also failed at
explaining the economic benefits it keeps referring
to; vague promises about jobs and growth no
longer suffice to gain the support of the French
public. This may also explain why opposition to
TTIP has so far stayed cleared of any economic
argumentation.
Rather, opposition has mainly focused on nonquantifiable aspects of the negotiations, such
as general concerns over globalization, the
belief that TTIP is solely a business-friendly
initiative, and consequent fears over downgraded
standards and rules. As a French member of the
European Parliament, Yannick Jadot, put it: We

Joseph Francois (project leader), Reducing Transatlantic


Barriers to Trade and Investment. An Economic Assessment,
Center for Economic Policy Research, March 2013, http://trade.
ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf; DG
Trade, Transatlantic Trade and Investment Partnership (TTIP).
What others are saying?, European Commission, July 18, 2013,
http://trade.ec.europa.eu/doclib/docs/2013/june/tradoc_151373.
pdf; Gabriel Felbermayr, Benedikt Heid, and Sybille Lehwald,
Transatlantic Trade and Investment Partnership (TTIP). Who
benefits from a free trade deal?, Global Economic Dynamics
and Bertelsmann Stiftung, June 17, 2013, http://www.bfna.org/
sites/default/files/TTIP-GED percent20study percent2017June
percent202013.pdf; Werner Raza (project leader), Assessing
the Claimed Benefits of the Transatlantic Trade and Investment
Partnership (TTIP), Austrian Foundation for Development
Research, March 31, 2014, http://www.guengl.eu/uploads/
plenary-focus-pdf/ASSESS_TTIP.pdf.

11

Jeronim Capaldo, The Trans-Atlantic Trade and Investment


Partnership: European Disintegration, Unemployment and
Instability, Global Development and Environment Institute,
Working Paper No. 14-03, Tufts University, October 2014, http://
www.ase.tufts.edu/gdae/Pubs/wp/14-03CapaldoTTIP.pdf.

12

are negotiating rules that are societal choices.13


In addition, following revelations over U.S.
surveillance and espionage activities in Europe,
mistrust and rejection of closer ties with the U.S.
partner have contributed to fueling anti-TTIP
rhetoric.
The European parliamentary election campaign of
spring 2014 offered an ideal platform for opponents
of the agreement. Many in France understood that
a link could be made between the election of new
members of the European Parliament and the TTIP
negotiations. In the end, it is these new MEPs who
will have to ratify the final agreement. In addition
to this responsibility, the European Parliament
has to be immediately and fully informed at all
stages of the procedure on matters related to
international agreements by the European Union.14
In a May 2013 Motion for Resolution on EU trade
and investment negotiations with the United States,
the European Parliament positioned itself as a key
institution in the initiative. It has since been an
instrumental advocate of increased transparency
and of the preservation of high EU standards in any
final deal.
During the election campaign in France, antiTTIP candidates monopolized most of the debate,
focusing on a specific set of topics that included
the lack of transparency in the negotiations, the
risk of allowing chlorinated chicken to be sold in
Europe, and the looming doom of Frances terroir.
In addition, anti-EU parties such as the right-wing
populist National Front (Front National) and the
left-wing Leftist Front (Front de Gauche) depicted
TTIP as yet another instrument of Brussels
Touteleurope.eu, Yannick Jadot - Accord de libre-change
UE-USA : il existe des risques trs lourds pour lEurope dans
cette ngociation, February 12, 2014, http://www.touteleurope.
eu/actualite/yannick-jadot-accord-de-libre-echange-ue-usa-ilexiste-des-risques-tres-lourds-pour-leurope.html.

13

Article 218.10, Treaty on the Functioning of the European


Union, http://eur-lex.europa.eu/legal-content/EN/TXT/
PDF/?uri=CELEX:12012E/TXT&from=EN #page=100.

14

Frances Unexpected Role

France comes out


overall as a beneficiary
of greater economic
integration with the
United States. Yet
Paris has also failed at
explaining the economic
benefits it keeps
referring to.

To many critics, it is
more about what TTIP
means, rather than
about what TTIP is.

domination over national interests. Generally proEU parties also voiced their concerns regarding
TTIP during the campaign. For instance, in one of
their campaign clips, the Greens (Europe Ecologie
les Verts), promised a Europe that will stop the
inacceptable project of transatlantic free trade.15
More spectacular expressions of this opposition
have included activists dressing up in chicken
suits and jumping into public swimming pools to
raise awareness regarding the alleged dangers of
chlorinated chicken.
To illustrate this point, during a TV debate between
party leaders, Jean-Luc Mlenchon, head of the
Front de Gauche, described the bottle of wine
that he had brought with him in the following
terms: This wine is possible because it contains a
particular condition for workers, social standards,
it contains environmental standards, it contains a
way of doing things, it contains a civilization. I am
attached to this delicate civilization. And tomorrow,
you will have chablis from Mississippi, champagne
from Oklahoma.16

of the European Commissions mandated positions.


Most of the reporting either focused on specific
dangers (chlorinated chicken) or on the meaning
of signing a trade agreement with the United States
(Atlanticism).
The overall politicization of TTIP in France reflects
entrenched positions from anti-free trade and
anti-globalization groups. More interesting is the
fact that the implications of TTIP have shifted
toward fundamental considerations regarding
the preservation of the French exception and
of what many consider to be integral values. The
agreements potential economic benefits are often
disregarded by anti-TTIP advocates. It seems that
to many critics, it is more about what TTIP means
rather than about what TTIP is. And the French
government has so far failed to properly explain
either of those perspectives.

In the period leading up to the elections, nationwide news outlets published special editions on the
negotiations, with often deliberately pronounced
views. 17 For example, the magazine Mariannes
reporting on How the Americans Will Eat Us
illustrates a straight-forward attack on a probusiness TTIP. As it turned out, there was very
little coverage of the negotiations themselves and
http://www.dailymotion.com/video/x1twob7_1er-clip-officielde-campagne-europe-ecologie_webcam.

15

Rmi Duchemin, Europennes 2014 : la pomme de Jadot, le


vin de Mlenchon et la carte de Bayrou, Europe1, May 22, 2014,
http://www.europe1.fr/Politique/Europeennes-2014-la-pommede-Jadot-le-vin-de-Melenchon-et-la-carte-de-Bayrou-2129749/#
(authors translation).

16

Maxime Vaudano, Il pourrait changer la face de lEurope : le


trait transatlantique dcod, Le Monde, April 15, 2014, http://
www.lemonde.fr/les-decodeurs/article/2014/04/15/il-pourrait-changer-la-face-de-l-europe-le-traite-transatlantiquedecode_4399476_4355770.html.

17

The German Marshall Fund of the United States

Public Opinion on TTIP


and Organized Interests

verall, concerns expressed by civil society,


interest groups, and politicians in France
do not differ much from those expressed
in other EU member states. But the French case
is particularly interesting. Over the past year and
a half, the French governments public statements
related to TTIP have mostly focused on calling for
increased transparency in the negotiation process.
At the same time, officials have carefully avoided
public discussions of the substance of a potential
agreement. The newly appointed EU leaderships
fresh start in TTIP negotiations, heralded by
both the U.S. trade representative and the EU trade
commissioner, followed a similar approach. By
focusing on addressing concerns over transparency
in the TTIP negotiations, officials on both sides
of the Atlantic are finally recognizing the fact
that TTIP is not a traditional trade agreement,
and therefore cannot be negotiated the same way
as other trade agreements have been in the past.
While negotiators on all sides insist that ultimately
substance is more important than process, they
recognize the fact that progress on substance
cannot be made without progress on process.

would help their economy grow, while 40 percent


believed that it would make their economy more
vulnerable.20

However harsh the criticism of a transatlantic


deal might be in the public debate, French public
opinion toward the United States remains largely
positive. In 2014, the Transatlantic Trends Survey
Report confirmed that a majority (51 percent) of
French respondents found it desirable that the
United States exert leadership in the world,18 and
73 percent of French respondents at the time had
a favorable opinion of the United States.19 More
telling, in 2013, 55 percent of French respondents
believed that proposals to increase trade and
investment between the United States and the EU

When it comes to TTIP specifically, public


knowledge of the proposed partnership remained
low until the European elections. A May 2014
survey ordered by the communist newspaper
LHumanit revealed that 55 percent of respondents
had never heard of TTIP.22 Nonetheless, 71 percent

The German Marshall Fund of the United States, Transatlantic Trends Topline Data 2014, September 10, 2014, p. 4,
question 1a, http://trends.gmfus.org/files/2012/09/Trends_2014_
ToplineData.pdf.

18

19

German Marshall Fund, p. 13, question 4.1.

A survey published by the Pew Research Center


in September 2014 found that while 73 percent of
French respondents agree that growing trade and
business ties between countries are good, only 24
percent of respondents think that trade leads to
more jobs. Further, only 14 percent believe that
trade leads to an increase in workers wages.21
Trade in itself is not thought of as a bad thing, but
its impact on everyday life and on the well-being
of workers is traditionally perceived as being more
costly than beneficial.

However harsh
the criticism of a
transatlantic deal might
be in the public debate,
French public opinion
toward the United States
remains largely positive.

These concerns are fueled by an underlying


hesitancy when it comes to signing free trade
agreements in France. Caution toward globalization
in general, a constant supposition that Frances
economic woes are mainly due to external factors,
and an underlying fear of Americanization of
the French Exception in general have had a
determining impact on perceptions of economic
relations.

German Marshall Fund of the United States, Transatlantic


Trends Topline Data 2013, September 6, 2013, p. 52, question
32, http://trends.gmfus.org/files/2013/09/TT-TOPLINE-DATA.
pdf.

20

Pew Research Center, Faith and Skepticism about Trade,


Foreign Investment, September 16, 2014, http://www.pewglobal.
org/files/2014/09/Pew-Research-Center-Trade-Report-FINALSeptember-16-2014.pdf.

21

Institut CSA, Les Franais et le trait transatlantique de


libre-change. Sondage Institut CSA pour LHumanit, May
20, 2014, p. 4, http://www.csa.eu/multimedia/data/sondages/
data2014/opi20140514-les-francais-et-le-traite-transatlantiquede-libre-echange.pdf.

22

Frances Unexpected Role

The public debate in


France over TTIP mirrors
that found in other EU
member states, but
perhaps to a lower
degree of political
sensitivity.

of respondents supported the harmonization of


regulations and standards, and 68 percent had a
favorable opinion regarding the elimination of tariff
barriers to trade and creating a common market
with the United States. These rather positive views
were, however, balanced by strong views against the
lowering of standards for consumer goods or the
introduction of mechanisms that would circumvent
traditional courts in case of dispute. When it comes
to reciprocity, 84 percent of respondents found
the idea unacceptable that French and European
supermarkets would be able to sell products
that would comply only with U.S., but not with
European, standards.23
The survey received little publicity, but its findings
highlight the existing contradiction in France of
how the public perceives TTIP. Greater integration
with the U.S. economy is desirable, if and only if it
is not at the expense of any acquis. In other words,
oui mais
A striking example of TTIPs deeper political
resonance in France can be found in semantics.
Supporters and opponents to the partnership do
not call it the same thing: for the proponents, it is
referred to as TTIP; for the critics, it is TAFTA,
or the Transatlantic Free Trade Agreement
making no mention of the idea of investment and
partnership. Tellingly, a coalition of opponents
to TTIP has been organized under the Stop
TAFTA movement. This coalition of more than
110 organizations representing civil society groups,
political parties, trade unions, and NGOs are
pushing for a full stop of TTIP.24 On October 11,
2014, an anti-TTIP day saw more than 70 actions
organized in France by the movement, out of the
1,000 that were organized across Europe including
Breaking down the answers to this question, 3 percent of
respondents answered that this would be acceptable, 12 percent
mostly acceptable, 24 percent not really unacceptable, and 60
percent not acceptable at all.

23

24

https://www.collectifstoptafta.org.

in 22 European capitals. By early June 2015, an


online petition launched by the movement to
stop TTIP had gathered more than 1.97 million
signatures, and local anti-TTIP initiatives had
multiplied all across Europe.
Labor unions have also been given further
guarantees that they would be kept regularly
informed of the progress of the negotiations.25
Indeed, in contrast to the MEDEF,26 the main
French business association, most unions oppose
any kind of agreement that would result in further
liberalization of the European economy. Many fear
that TTIP will favor U.S. businesses over domestic
and smaller ones. They also fear that any
agreement with the United States will result in the
lowering of standards in agricultural products,
labor rights, and environmental protection in
France and in Europe. From the start, there has
been little trust in then-EU Commissioner for
Trade Karel De Guchts assurances that Europe
is going into these negotiations enthusiastically,
but realistically. Domestic environmental, labor,
privacy or safety standards, and policies to protect
consumers cannot and will not be lowered as a
means to promote trade and investment.27
In this sense, the public debate in France over TTIP
mirrors that found in other EU member states, but
perhaps to a lower degree of political sensitivity. In
Germany, the debates over the potential inclusion
of an Investor State Dispute Settlement mechanism
(ISDS) and over the need for greater transparency
Zonebourse, Traits commerciaux : FO reue aux Affaires
trangres, July 13, 2014, http://www.zonebourse.com/actualitebourse/FO-Force-Ouvriere--International--Traites-commerciaux--FO-recue-aux-Affaires-etrangeres--18732443/.

25

MEDEF, Ngociations commerciales Union Europenne Etats-Unis : une grande chance saisir, June 10, 2014, http://
www.medef.com/medef-tv/actualites/detail/article/negociationscommerciales-union-europeenne-etats-unis-une-grandechance-a-saisir.html.

26

Karel de Gucht, Press conference, June 14, 2013, http://


ec.europa.eu/avservices/video/player.cfm?ref=I079163.

27

The German Marshall Fund of the United States

in the negotiation process have reached the


potential to affect the scope and scale down the
depth of the agreement.28 In the United Kingdom,
fears that TTIP might threaten the public nature
of the National Health Service (NHS) led both
the European Commission29 and the British
government30 to officially assure a concerned public
that TTIP would not impinge on member states
rights to regulate healthcare.
In an interview with the left-wing newspaper
Liberation in December 2014, French Trade
Minister Matthias Fekl declared that France
will be very attentive to the respect of social
and environmental standards. It is out of the
question that public policies or collective choices
be questioned.31 It is indeed in the preservation
of these collective choices of the acquis that
French officials may be able to contribute to a
balanced agreement that would be politically
acceptable first in France and then throughout
Europe.
In addition, as public scrutiny of the negotiations
rose, the French government intensified its calls

for greater transparency and openness.32 In June


2014, the minister assured the National Assemblys
Foreign Affairs Committee, that the debate over
the transatlantic treaty does not only touch upon
the substance of the issues, but also deals with the
methodology of negotiating a trade agreement
of this magnitude, and more broadly, with the
issue of necessary democratic transparency. []
In my view, it is no longer about talking about
transparency, but about implementing it.33
On August 20, 2014, De Gucht signed a letter sent
by the Italian Presidency of the Council asking
all member states to agree to the publication of
the TTIP negotiation mandate. This initiative
aimed as much at responding to calls for greater
transparency in the negotiations as to tackle
some of the misperceptions resulting from the
politicization of TTIP throughout Europe. On
October 9, the Council of the EU made public the
negotiating directives for talks on TTIP.34
The new EU leadership has taken the issue of
transparency in TTIP head-on. In late November
2014, newly appointed Trade Commissioner
Cecilia Malmstrm launched a transparency
initiative to increase access to EU negotiating
Mounia Van de Casteele, TTIP : Fleur Pellerin promet plus de
transparence dans les ngociations, La Tribune, May 21, 2014,
http://www.latribune.fr/actualites/economie/international/201
40520trib000830923/partenariat-transatlantique-fleur-pellerinpromet-plus-de-transparence-dans-les-negociations.html.

32

Peter Sparding, Germanys Pivotal Role on the Way to TTIP,


GMF Europe Policy Paper 5/2014, November 13, 2014, http://
www.gmfus.org/publications/germanys-pivotal-role-way-ttip.

28

Ignacio Garcia-Bercero,Letter to Rt. Hon. John Healy, MP


and Chair, All-Party Parliamentary Group on TTIP, House
of Commons, July 8, 2014, http://trade.ec.europa.eu/doclib/
docs/2014/july/tradoc_152665.pdf.

29

Department of Health, Response to The Peoples NHS


campaign about TTIP, November 11, 2014, https://www.gov.
uk/government/news/response-to-the-peoples-nhs-campaignabout-ttip.

30

Lilian Alemagna, Interview: Matthias Fekl, secrtaire


dEtat charg du Commerce extrieur sur le trait de libre
change, Libration, December 14, 2014, http://www.liberation.fr/politiques/2014/12/14/tafta-respecter-les-standardssociaux_1163646.

31

Assemble Nationale, Audition, ouverte la presse et


conjointe avec la commission des affaires europennes, de Mme
Fleur Pellerin, secrtaire dtat charge du Commerce extrieur,
de la promotion du Tourisme et des Franais de ltranger, auprs
du ministre des Affaires trangres et du Dveloppement international, sur le projet de partenariat transatlantique, Commission des affaires trangres, Compte rendu n 70, June 17, 2014,
http://www.assemblee-nationale.fr/14/cr-cafe/13-14/c1314070.
asp#P7_410.

33

Council of the European Union, Directives for the negotiation on the Transatlantic Trade and Investment Partnership
between the European Union and the United States of America,
11103/13, October 9, 2014, http://data.consilium.europa.eu/doc/
document/ST-11103-2013-DCL-1/en/pdf.

34

Frances Unexpected Role

It is indeed in the
preservation of these
collective choices of
the acquis that French
officials may be able to
contribute to a balanced
agreement that would
be politically acceptable
first in France and then
throughout Europe.

texts.35 On January 7, 2015, as part of this initiative,


the European Commission published eight EU
textual proposals cover competition, food safety
and animal and plant health, customs issues,
technical barriers to trade, small and mediumsized enterprises (SMEs), and governmentto-government dispute settlement (GGDS).36
It remains to be seen how this unprecedented
decision to publicize positions while negotiations
are still ongoing will be received in Europe. It will
be particularly interesting to see what effect it
has in France, where Malmstrm has repeatedly
made assurances that TTIP is the most transparent
agreement ever negotiated by the EU, during her
visits to Paris in December 2014 and April 2015.37

Press Release, Opening the windows: Commission commits


to enhanced transparency, European Commission, November
25, 2014, http://europa.eu/rapid/press-release_IP-14-2131_
en.htm.

35

DG Trade, European Commission publishes TTIP legal


texts as part of transparency initiative, European Commission,
January 7, 2015, http://trade.ec.europa.eu/doclib/press/index.
cfm?id=1231.

36

Richard Hiault, Ccilia Malmstrm dfend Paris les vertus


du trait transatlantique, Les Echos, December 15, 2014,
http://www.lesechos.fr/monde/europe/0204017898151-ceciliamalmstrom-defend-a-paris-les-vertus-du-traite-transatlantique-1075238.php?hrg1XR5ywwb4EvM0.99.

37

10

The German Marshall Fund of the United States

From Process to Substance:


The Case of Investment Protection

s it has across Europe, in France the


possible inclusion of an ISDS mechanism
within TTIP has become a symbol of
broader unwelcome trends: a loss of democratic
control, growing corporate influence and a
lack of transparency.38 But with strong vocal
opposition to ISDS, it is somewhat surprising
that only 6.55 percent of contributions to a
European Commissions public consultation on
ISDS originated in France (compared with 34.81
percent originating in the U.K., and 21.76 percent
in Germany).39 While this should not necessarily
be interpreted as a lack of involvement from French
civil society in the EU-wide debate over the issue,
it is indicative of the varying levels at which TTIP
and ISDS are present on member states political
agendas.

The French governments position on ISDS has


remained ambiguous for a long time. In front of the
Senates Economic Affairs Committee, Fekl assured
legislators that when it comes to arbitration panels,
France did not ask for them and they were included
in the mandate before this government came to
power but that is not essential. What matters
is the preservation of states rights to regulate
and implement these regulations, the principal
of independence and impartiality of justice, and
the capacity of peoples to avail their collective
preferences. 40 In early 2015, a leaked memo from
the Secrtariat Gnral aux Affaires Europennes
(Secretariat General for European Affairs SGAE)
called for caution when it came to excluding ISDS

from TTIP.41 According to the SGAE, which is


tasked with coordinating Frances official positions
on EU affairs, a dispute settlement mechanism
that involves arbitrage cannot be dissociated from
investment protection. It recommended in its
memo to look into proposals to reform the ISDS
mechanism in order to make it more legitimate and
more protective of states rights to regulate.
Following a stark reaction by the trade minister
himself42 stating that the memo did not reflect
Frances official position on ISDS, the SGAE issued
a rectification. This new memo clearly expressed
that France estimates that the inclusion of an
investor to state dispute settlement mechanism is
neither useful nor necessary. It therefore reflects
the French governments official position, according
to which France considers that it is necessary to
invent new modalities for ISDS, which would
respect a series of fundamental principles.43
In other words, France might not oppose
investment protection provisions full-stop within
TTIP, provided these provisions do not threaten
the preservation of the acquis in Europe. An
improved ISDS mechanism, providing sufficient
guarantees to member states, could very well be
supported by Paris. The rectified memo published
by the SGAE provides a number of such ideas
put forward by France in order to improve ISDS
Secrtariat Gnral aux Affaires Europennes, Position des
autorits franaises sur le projet de rapport sur les recommandations la Commission europenne sur les ngociations relatives
au partenariat transatlantique de commerce et dinvestissement
(PTCI/TTIP), 2014/2228, February 24, 2015, http://www.mediapart.fr/files/SGAE-leak.pdf

41

Le Monde, Interview of Matthias Fekl, March 4, 2015, http://


www.lemonde.fr/economie/article/2015/03/04/tribunauxd-arbitrage-il-faut-inventer-quelque-chose-de-neuf-selonmatthias-fekl_4587028_3234.html

42
38

Sparding, p. 12.

European Commission, Online public consultation on


investment protection and investor-to-state dispute settlement
(ISDS) in the Transatlantic Trade and Investment Partnership
Agreement (TTIP), Preliminary report (statistical overview),
July 2014, p.2-3, http://trade.ec.europa.eu/doclib/docs/2014/july/
tradoc_152693.pdf

39

40

Matthias Fekl, November2014, (authors translation)

Secrtariat Gnral aux Affaires Europennes, Position


des autorits franaises sur le mcanisme de rglement des
diffrends entre investisseurs et Etats dans le partenariat transatlantique de commerce et dinvestissement (PTCI/TTIP), March
4, 2015, https://www.libre-echange.info/IMG/pdf/257756895note-sgae-isds.pdf

43

Frances Unexpected Role

11

France might not


oppose investment
protection provisions
full-stop within TTIP.

beyond a traditional arbitrage mechanism. As


such, the French government could play a key role
in advancing the debate over ISDS in Brussels,
both between member states, and the European
institutions. In addition, it could contribute to
bridging existing disconnects between the rhetoric
used by anti-ISDS advocates and the reality of
investment protection.
Here too, Frances dtachement from the imperative
of concluding TTIP at all costs weighs in its
favor. Indeed, should an ISDS mechanism be
entirely excluded from TTIP in the end, or
should an improved ISDS mechanism eventually
find its way in the agreement, either way the
French government will be in a position to argue
domestically that it has heard the concerns of its
citizens and contributed to preserving European
and French interests.

12

The German Marshall Fund of the United States

TTIP and Frances Embryonic


Economic Diplomacy

eploying an economic diplomacy strategy


while at the same time negotiating TTIP
may prove to be a daunting task for France.
Indeed, economic diplomacy cannot only be
the promotion of national economic interests
by diplomatic means. It should also accompany
a strategic vision of broader external relations,
one that might sometimes conflict with direct
economic interests. To some extent, in particular
as it supports a closer economic partnership with
the United States, France might be tempted to
downplay TTIPs strategic significance in order to
reassure other commercial partners frightened by
the agreements global ambitions. Paris therefore
needs to strike the right balance between its geoeconomic and geostrategic priorities. Addressing
perceptions of TTIP from third countries could
prove to be as crucial as addressing perceptions
within France, the EU, and the United States. In
this context, the French governments ambitions in
economic statecraft would benefit from a clearer
distinction between economic diplomacy and
commercial diplomacy.
Early on in his tenure as French foreign minister,
Laurent Fabius envisioned a special section in his
ministry that would be tasked with promoting
and defending Frances economic interests abroad.
While the Treasury had long been responsible for
representing and coordinating external economic
policy, Fabius wanted a greater role for the
ministry, one of economic diplomacy. In 2012,
the Directorate for Enterprises and International
Economy (DEEI) was created with the mission to
accompany French investors abroad in facilitating
contacts with local decision-makers. It was also
intended to promote Frances assets and expertise
to foreign investors. Still, despite this initial push,
the minister delegate for trade remained under the
authority of the finance and economy minister.
When Hollande reshuffled the government in April
2014, the question was raised whether trade policy

should remain a portfolio under the Treasury, or if


it should move to the Ministry of Foreign Affairs
(MFA). After a fierce political battle between the
ministers for control over external economic policy,
trade policy moved to the MFA. This political
move also turned out to be physical, with the
minister delegate for trade taking office in the
MFAs building.
The timing of this move coincided with a number
of developments that had the potential to influence
perceptions of TTIP in France: the acquisition
of Alstom by General Electric; a strong French
position on generic domain names such as .vin and
the reform of the Internet Corporation for Assigned
Names and Numbers; and a historic fine for the
French bank BNP Paribas for having violated U.S.
sanctions. Fabius had declared in early June 2014
that the fine could have negative consequences
on the ongoing TTIP negotiations.44 In doing so,
he was able to reiterate the European desire to see
financial services included in the negotiations. But
more importantly, he succeeded in establishing
a direct link between two supposedly unrelated
transatlantic issues; he brought TTIP to a level of
political bargaining for France in its relations with
the United States.
Leading to the adoption of the May 14, 2014, decree
on foreign investments subject to preliminary
authorization,45 the GE-Alstom-Siemens case
reveals the French governments willingness to
link the future of strategic industries in France
to the global role of the European economy.
At the time, the immediate reaction from the
French government was to call for the creation
HuffPost, AFP, Lamende inflige BNP aurait pu tre encore
pire, Fabius voque des consquences ngatives, Le Huffington
Post, June 6, 2014, http://www.huffingtonpost.fr/2014/06/06/
amende-bnp-fabius-consequences-negatives_n_5457411.html.

44

Dcret n 2014-479 du 14 mai 2014 relatif aux investissements trangers soumis autorisation pralable, May 14, 2014,
http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORF
TEXT000028933611.

45

Frances Unexpected Role

13

Paris needs to strike the


right balance between
its geo-economic and
geostrategic priorities.

While recognizing the


need to set together
the global rules
and standards of
tomorrow, Paris and
Washington differ in
their assessment of
the future of the global
economic order.

of European giants in the field of energy and


transport, prompting the German Siemens to make
a counteroffer for Alstom. In the words of thenFrench Minister Arnaud Montebourg: we either
create an Airbus of energy and one of transports,
or we will be bought by Boeing.46 This was not
the first time that the French government brought
up the idea of creating a European consortium in
the energy sector, similar to what had been done
in the past in aviation. Under this framework,
French companies would have a crucial role to
play, and would contribute to shaping Europes
industrial future; and a strong industrial European
economy would by definition have an impact on
the evolving global economic order. GEs intentions
with Alstom, raised hopes of seeing this idea come
to life, but unfortunately for Paris, it fell short of
triggering the European reaction some might have
hoped for.
While there were little reasons to believe that the
GE-Alstom-Siemens case would derail TTIP as a
whole, it provided a good illustration of what the
French public might expect from its government
when faced with the possibility of losing control
over strategic assets to U.S. investors.

from other parts of the world, in particular from


China. And for Paris, it is crucial that TTIP not
be interpreted as an economic NATO aimed at
containing China. As a result, TTIP does not bear
the same strategic significance for France or the
United States. It is therefore understandable that
their priorities differ in how the agreement is being
negotiated, and in how it is being perceived.
Economic statecraft will play an increasingly
critical role in French foreign and security policy.
With growing linkages being made between
geopolitical and commercial interests, both a
strong institutional framework and a clear political
vision are required. And as trade openly becomes
a foreign policy tool for France, navigating the
complex politics of TTIP is the first major challenge
that the French government has to face in this new
strategy of economic diplomacy. Unfortunately,
as it is currently using the TTIP negotiations and
communicating about them, the government falls
between two stools. TTIP should indeed be used
as a geostrategic asset. It could help consolidate
Frances global economic ambitions, especially in
Asia, while at the same time strengthening the core
principles of the transatlantic economy.

In different ways, these cases contributed to


consolidating perceptions of what a stronger
economic partnership between the two countries
could mean. They also highlighted the sensitive
economic and regulatory relations prevailing
between France and the United States. While
recognizing the need to set together the global rules
and standards of tomorrow, Paris and Washington
differ in their assessment of the future of the global
economic order. At a time when both Europeans
and Americans believe that trade is more and
more geostrategic, how they use TTIP in order to
strengthen their alliance will be carefully watched
Arnaud Montebourg, Twitter account, April 28, 2014, https://
twitter.com/montebourg/status/460660376854863872 (authors
translation).

46

14

The German Marshall Fund of the United States

Moving Forward

s the politicization of the debate in France


demonstrates, opposition to the agreement
encompassed the modalities of greater
integration with the United States, the process of
the negotiations, and the substance of its regulatory
dimension. Its economic impact is rarely put
forward. Similar debates are ongoing throughout
the EU, especially in neighboring Germany and
Britain. But having adopted a cautionary approach
to TTIP very early on, the French government
should now take a leading role in reassuring
Europeans of the strategic benefits of a stronger
transatlantic partnership, and work with the
European Commission toward a more transparent
and mutually beneficial deal.

As negotiators head into the second half of 2015,


the French government finds itself in a critical
and unexpected position with regard to TTIP.
With most of the spotlight on Berlin and on the
German publics expressed opposition to the
agreement, France is emerging as a potentially
strong advocate for a reasonable and balanced
agreement. While officially it does not expect
any final agreement on TTIP to be reached in
2015,47 the French government could use the rest
of the year to constructively address concerns
over the agreement, as it has done on ISDS. As
TTIP ultimately has to be approved by all member
states and be ratified by the European Parliament
and national parliaments, delivering on such an
agreement requires European capitals to step up
to the plate. In such a context, much remains to be
done domestically to dissipate lingering fears and
concerns about the deal.
In this regard, the French government could:
Matthias Fekl, Partenariat transatlantique - Audition de M.
Matthias Fekl, secrtaire dtat charg du Commerce extrieur,
de la Promotion du tourisme et des Franais de ltranger,
devant la commission des Affaires conomiques du Snat,
November 12, 2014, (authors translation), http://basedoc.
diplomatie.gouv.fr/vues/Kiosque/FranceDiplomatie/kiosque.
php?fichier=bafr2014-11-17.html#Chapitre10

47

1. increase its engagement in the public debate


in France to promote fact-based accounts of
the intended trade and investment partnership
between the EU and United States, especially on
topics of concern such as ISDS and standards
(particularly on food and agricultural products);
2. clearly express its position on respective chapters,
especially those of concern for European citizens,
by limiting differences of views between the
government and administration services;
3. look beyond hurdles in regulatory harmonization
and mutual recognition of standards by
encouraging stronger collaboration between
European and U.S. regulators, and by supporting
compatibility of processes whenever possible;
4. propose creative alternatives to areas of concern
(as it did with ISDS) and wherever the acquis and
fundamental EU principles might be perceived as
being threatened;
5. embrace TTIPs strategic dimension as a
powerful tool for Frances economic diplomacy,
while actively addressing negative perceptions
from third countries; and
6. engage EU institutions on how to better attract
and protect inward foreign investments,
especially in strategic industries, starting within
the framework of EU-U.S. investment relations.
Such measures could contribute to solidifying an
agreement that would be politically acceptable
within both member states and the European
Parliament. By further engaging in the public
debate, the French government can show its
commitment to a deal, regardless of the form it will
ultimately take, as well as contribute directly to its
success whatever success means at the end of
the process. By not doing anything, France would
miss an opportunity to reap additional diplomatic,

Frances Unexpected Role

15

With most of the


spotlight on Berlin and
on the German publics
expressed opposition
to the agreement,
France is emerging
as a potentially
strong advocate for
a reasonable and
balanced agreement.

political, and economic benefits in Europe and


globally.

16

The German Marshall Fund of the United States

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