When Donald Trump takes the oath of office, he will also inherit President Obama’s legacy on trade – with negotiations towards the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) ongoing. While Trump has already stated he will axe TPP, TTIP’s future is much more uncertain. Tereza Novotna outlines five scenarios for what actions Trump may take, from ditching it completely to putting it to the “back of the queue”, to rebranding and revising it to better fit with his own realpolitik

Novotná, Tereza

Novotna, Tereza

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Will Donald Trump shoot down TTIP or rebrand it as the 'Trump Trade and Investment Partnership' ?

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1/19/2017Will Donald Trump shoot down TTIP or rebrand it as the ‘TrumpTrade and Investment Partnership’?blogs.lse.ac.uk/usappblog/2017/01/19/will-donald-trump-shoot-down-ttip-or-rebrand-it-as-the-trump-trade-and-investment-partnership/When Donald Trump takes the oath of oﬃce, he will also inherit President Obama’s legacy on trade– with negotiations towards the Trans-Paciﬁc Partnership (TPP) and Transatlantic Trade andInvestment Partnership (TTIP) ongoing. While Trump has already stated he will axe TPP, TTIP’sfuture is much more uncertain. Tereza Novotna outlines ﬁve scenarios for what actions Trump maytake, from ditching it completely to putting it to the “back of the queue”, to rebranding and revising itto better ﬁt with his own realpolitik. With the Congressional hearings of Donald Trump’s picks underway, including questioning of RobertLighthizer who was chosen to be US Trade Representative (USTR) in the new administration, it could seem that freetrade might survive after all. Who else than a longtime international trade attorney and deputy USTR under Reaganshould naturally be inclined towards free trade? Yet Donald Trump has already announced that he would withdrawfrom the Trans-Paciﬁc Partnership (TPP) on his ﬁrst day in oﬃce. Nonetheless, it is not only TPP but also theTransatlantic Trade and Investment Partnership (TTIP) that has been on the agenda since 2013. Donald Trump,albeit vocally critical of European allies in other areas, such as defense spending and NATO, has been auspiciouslysilent about TTIP both during his campaign and his ‘trumpsition’. What is then likely to happen with TTIP duringTrump’s Presidency? Is TTIP ‘dead’ as much as TPP is? And how will the European partners react to any news fromthe Trump Tower? The following lines outline ﬁve potential scenarios what future may hold for transatlantic freetrade under the Trump administration.Scenario 1: Trump Shoots Down TTIP on Day OneIn the ﬁrst scenario, following in TPP’s footsteps, President Donald Trump will task newly minted USTR Lighthizer tostop negotiating TTIP with the European Union (EU), either on the day of his inauguration, or shortly afterwards. Thisis the least desirable outcome, not least because of all the (incremental) progress that has so far been madebetween negotiators on both sides. Nonetheless, such a ‘quick death’ of TTIP would not be out of sync with Trump’santi-globalization and ‘Make America Great Again’ rhetoric. Yet ironically, it would also make European ‘Stop TTIP’campaigners happy who had been successfully scaremongering about the American ‘chlorinated chicken’ ﬂoodingthe EU market via TTIP.Scenario 2: TTIP-LightUnder the second scenario, President Trump will stick to his promise of agreeing to cutting tariﬀs but rejecting anyfar-reaching agreement on regulatory issues which has however been the main innovation of TTIP. Trump’snegotiators will therefore oﬀer to the Europeans a ‘better deal’, focusing on removing all the remaining (albeit alreadylow) tariﬀ barriers. Although such a ‘TTIP-light’ matches well with Trump’s pre-election campaigning and, in a way,would be quicker and easier to achieve than any ambitious regulatory framework, a TTIP-light is unlikely to beaccepted by the Europeans, at least not immediately. In the run up to the US elections, European leaders, both atthe EU level and in member states such as France, clearly discarded any TTIP-light as not ambitious enough andtherefore unacceptable.Scenario 3: TTIP at the Back of the QueueTo loan a phrase from President Obama when he warned the Brits from leaving the EU, TTIP negotiations will1/3continue but will be shifted to the ‘back of the queue’ after any bilateral agreements, including one with the UK. Inthis third scenario, TTIP will not suﬀer a quick death but a slow hibernation. Negotiations will still be ongoing, but willbecome less frequent with increasingly less will on each side to reach any settlement. Such protracted negotiationsmight not lead to the end of TTIP, but will probably mean that any substantial deal can be reached only once DonaldTrump leaves oﬃce. Since it is hard to predict how the world might look like in four, or even eight, years, this isperhaps the trickiest scenario which gives a glimmer of hope but that could well be deceiving for both sides. Scenario 4: Calm Down, It’s Business as UsualAlthough least likely, ‘keep calm and negotiate’ is the most coveted scenario for the supporters of TTIP. Particularlysince it looks like that TTIP has not reached the radar of the incoming President yet, there is a distant possibility thatno substantial change from Obama to Trump takes place and TTIP negotiations will continue to be business asusual. With a dose of imagination, TTIP is after all a sort of bilateral deal preferred by Trump: it is negotiatedbetween two (rather than twelve as in TPP) sides where the EU is represented by a single entity (the EuropeanCommission) and allows for access to a single (rather than 28) European market. In this fourth scenario, however, itmight in the end be the Europeans who could scupper the deal given the public backlash against the lack oftransparency and fears of the US-based multinational corporations encroaching on the European way of life. WithTrump’s style of negotiating and top business executives running his administration, EU negotiators may have evenharder time to convince the already sceptic European public about any TTIP’s merits.Scenario 5: Rebranding or TTIP 2.0 Reminiscent of the ﬁrst scenario, in the last case, Trump will eﬀectively kill the deal on Day One. However, TTIP willnot be buried but be reborn under a diﬀerent name (and perhaps structure): a TTIP 2.0. After initially putting TTIPinto the same basket as TPP, President Trump will eventually reach conclusion that a trade agreement with thelargest single market in the world which has high labor standards and hence poses no threat to American jobs isindeed a good thing. As an experienced entrepreneur, he will opt for a popular business strategy, resurrecting thesame old TTIP under a new banner, which could even be called the ‘Trump Trade and Investment Partnership’. Eventhough the European partners may ﬁrst suﬀer a shock from having the TTIP as they know it ditched, they may soonrealize that ‘rebranding’ has its advantages: it may give them a chance to learn from their mistakes and bettercommunicate TTIP 2.0 back home. Given Trump’s attempts to combine pre-election speech-making with realpolitik,2/3the ﬁfth scenario is relatively likely and to some extent a good option for the Europeans, particularly from the publicdiplomacy perspective.Whichever scenario, or any mixture of them, in the end prevails will depend on not only Trump’s decisions and hisUSTR nominee, but also on the set up of the Republican majority at the Capitol: in fact, even under Obama, it wasthe GOP that largely supported TTIP rather than the Democrats. Moreover, President Trump should be well advisedthat if TTIP fails, it will be his newly found archenemy, China, with its trade plans such as RCEP, who will lead theworld’s trade. And that is a scenario that neither Trump nor the Europeans should wish for.Featured image credit: Mehr Demokratie (Flickr, CC-BY-SA-2.0)Please read our comments policy before commenting . Note:  This article gives the views of the author, and not the position of USApp– American Politics and Policy, nor ofthe London School of Economics. Shortened URL for this post: http://bit.ly/2iYfVzO _________________________________ About the authorTereza Novotna – Université libre de BruxellesDr Tereza Novotna is an FNRS Post-Doctoral Researcher at the Institute for European Studies atUniversité libre de Bruxelles in Brussels and Senior Associate Research Fellow at EUROPEUM, aPrague-based think tank. She is a co-editor of the The Politics of Transatlantic Trade Negotiations:TTIP in a Globalized World (Ashgate, 2015) and the author of report Five Reasons Why TTIP MayFail and Why It Will Be Europe’s Fault (LSE IDEAS, 2016). In addition to TTIP and transatlanticrelations, she has researched and widely published on EU foreign policy, EU enlargement anduniﬁcations in Germany and on the Korean peninsula. She has also worked for the EU Delegationin Washington, DC, the European Commission’s DG RELEX/EEAS, and the Czech Permanent Representation tothe EU.CC BY-NC 3.0 2015 LSE USAPP3/3

Will Donald Trump shoot down TTIP or rebrand it as the ‘Trump Trade and Investment Partnership’?

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