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Merkel appeals to Germans to back trade pact ahead of G7 meeting

German Chancellor Angela Merkel in Berlin, Germany May 29, 2015. REUTERS/Hannibal Hanschke

By Erik Kirschbaum BERLIN (Reuters) - Chancellor Angela Merkel tried to drum up support in Germany for the Transatlantic Trade and Investment Partnership (TTIP) ahead of the G7 summit she is hosting in June, saying in an interview on Saturday she hopes it will be finalised by 2017. Merkel told the Sueddeutsche Zeitung newspaper it was important that talks between the European Union and United States lead to an accord before U.S. President Barack Obama leaves office in January 2017. Without an agreement on TTIP between the EU and the United States by early 2017, Merkel fears there could be "a long interruption" in the talks. "It's important for me that the transatlantic free trade keeps pace with the Pacific region," Merkel said, referring to the advanced stage of talks between the United States and Asia about a free trade agreement. Twelve countries, including the United States, Japan, Vietnam, Australia and New Zealand, are in talks for a Trans-Pacific Partnership (TPP). The TTIP is a free trade and investment agreement being negotiated between the European Union and United States that aims to create greater access to European markets for American goods, strengthen ties between the two regions and increase economic growth for them, among other goals. Merkel does not often invest political capital backing TTIP at home, but opposition to it is unusually strong in Germany, even though its powerful export-oriented industrial sector stands to benefit greatly. "The United States is one of our most important trade partners," Merkel said in the interview. "Especially for our export-based economy, the United States is the biggest market outside of the EU, much larger than even China." Thus, it is "in the interest of our jobs and our prosperity that we encourage trade with the United States and not give it up to competitors from other regions," Merkel said, referring to Asia. Merkel acknowledged TTIP opponents in Germany, saying, "There's a concern whether our social and ecological standards will stay in place." But, she said, some consumer and environmental groups are less interested in ensuring that standards are upheld and rather eager to use TTIP to try to tighten those standards. "That's the wrong approach." Obama has called for major progress in trade talks with Europe this year. The U.S. presidential election will be held in November 2016. One of the major stumbling blocks to the deal is an investor protection clause wanted by the Americans. Many in Europe fear that U.S. multinational companies will use a so-called investor-to-state dispute settlement (ISDS) mechanism to challenge Europe's food, labour and environmental laws on the grounds that they restrict free commerce. Proponents of a deal have said it could add $100 billion in annual economic output on both sides of the Atlantic. The Group of 7 of the world's most industrialized nations, including France, Germany, Italy, the United Kingdom, Japan, the United States and Canada, meets each year to discuss matters of common interest, including economic issues. Germany currently holds the rotating G7 presidency. Finance ministers and central bankers from the G7 economies began a three-day meeting in Dresden on Thursday with an agenda that included international tax issues, financial sector regulations and reform of quotas at the International Monetary Fund. The annual summit of the G7 heads of state and government is scheduled for June 7 and 8. (Reporting by Erik Kirschbaum; Editing by Toni Reinhold)