The German Minister for the Economy, Vice-Chancellor of the Coalition Government and head of the Socialdemocratic Party, Sigmar Gabriel, is a talented politician who comes with a lack of credibility. When protests of civil society organizations about CETA and more so about TTIP, latter still in the negotiation stage, swapped over to the German Federation of Labor (DGB) he was quick to state that TTIP will not come with the infamous investor-state-dispute-settlement (ISDS) clause. His – convincing – argument was that both entities, the US (Canada) as well as the member states of the EU, have excellent legal systems that do not need additional private courts for settling disputes between private companies and states. With this statement he was very much in line with his party that sent strong utterings over the last few months not to pass CETA in its current form. On November 27 in a debate in the German Parliament Gabriel performed a first-rate turnaround. He now stressed that CETA is a great negotiation outcome that needs not only to be signed off but actually is to be seen as the blueprint for everything that comes. And he added, that without CETA the negotiations with the US may come under further pressure, and more so Europe would lose out the race with emerging Asia and China. In brief, questioning CETA would be political as well as economic suicide.

I am not a bit surprised about this turn. Not so much because Gabriel represents a sort of politician who has neither strong political values nor proven analytical skills that would allow him to understand the undercurrents of an issue like framing globalization. Gabriel actually is the kind of pop politician who has the ability to contribute to any topic, and often quicker then others. This does not always make his contributions serious. His CETA- turnaround is not surprising because it was actually long in the making (see my piece from October 2014). Latest with the presentation of one of two expert reports out of his ministry in October it was obvious for everyone who wanted to see which route he planned to go. The legal expertise on CETA and ISDS came to the conclusion that the actual CETA-text presents a very weak ISDS mechanisms that would probably deter private businesses from making use of this mechanism at all. It helped that the expertise was provided by a legal scholar who himself is part of the legal strata who make some side-money by professional engagements in private courts. Honi soi qui mal-y-pense.

Will the inclusion of ISDS actually make a big difference? Probably not very much in economic terms. The real problem seems to me that ISDS between OECD-economies – where on both sides eager law offices are permanently on the search for big trials – establishes ‘private law’ that becomes binding for national actors. In such a wider sense ISDS is a threat for political democracy. True, it is ages ago that the SPD was literally risking lives in order to fight for political democracy. Still, that the same party voluntarily supports further restrictions of national sovereignty and does so in the name of international competitiveness and market shares is unworthy. The more so, as Gabriel is not blessed with too much economic expertise. Rather then providing a serious argument he repeats the worn-out stuff of lobbyists.

To be clear, free trade in goods and services as well as the free movement of investment capital can be generally spoken a good thing, and both are not in need of ISDS. At least not between political jurisdictions whose legal systems are well entrenched and politically independent. This may be different in case of countries where private businesses are running the risk to be treated unfairly or even to get expropriated. I trust Gabriel’s economic experts know about all this. His turnaround, thus, has nothing to do with economic insights then it has to do with Gabriel’s efforts to re-position the SPD in the political centre and to acquire the level of business-friendly reputation the party lacks, despite its _Hartz reforms_.

I still think Gabriel’s turnaround is a political mistake. Neither will he win the trust of German export sectors with his leaf-in-the-wind-attitude nor will it pay off in terms of political support from the left-centre camp. Sure, his turn will be acknowledged the exporters, including trade unions of the export sectors as well as by the liberal camp of the Green Party who may not applaud him publicly but definitely behind closed doors. Nevertheless, it seems to me that the SPD just gave up an political opportunity to present itself as a 21st century party that can manage international economic relations. Having a second look on CETA in order to work out a good negotiation position for TTIP would have been the best way to go. In a grander perspective, there is no doubt that the SPD lost a great opportunity to present itself as a left of centre 21st century party who uses such negotiations for big agreements to inject domesticating elements that are guided by a project of ‘embedded globalization’. There are many good reasons for the trade liberalization of goods and services as there are also many excellent reasons to manage cross-border movements of various forms of capital and finance. For a very brief time it seemed as the period of ‘unfettered’ global capitalism came to an end when the global system ran into the 2008 disaster. Since, the flag of liberalization is back, and the SPD just added more support for this flag. It is rather silly to use the rhetoric of ‘Chlorhuehnchen’ and the warning of water privatization against CETA and TTIP. None of it is actually covered in the known texts. It would be more critical to talk about the conflictual relations between political democracy and free economic globalization. Gabriel and the SPD missed all opportunities to even start a relevant societal conversation. How sad it is to see such a proud party going a liberalization route whose limits are well established.