New Report: SME’s Will Benefit from TTIP
On Nov. 14, the Atlantic Council—a think tank, who works to deepen economic integration between Europe and the United States as well as promote transatlantic leadership in the global economy—released a new report entitled: The Transatlantic Trade and Investment Partnership: Big Opportunities for Small Business. The study conducted in both the United States (U.S.) and the European Union (EU), found that small and medium-sized businesses based in both America and Europe would benefit from passage of the Transatlantic Trade & Investment Partnership (TTIP). The U.S. and the EU have been negotiating the free trade agreement since July 2013, although working groups of experts began tackling the issue in 2011.
In survey research and interviews conducted with Small and Medium-Sized Enterprises (SMEs), on both sides of the Atlantic, including members of the Small Business Exporters Association (SBEA), the study cites three core challenges for SMEs: lack of clarity on how to get started, problems finding the right clients, and what the report calls a “confusing mix of regulatory differences and contradictory registration requirements.”
More than 99 percent of all businesses in both the U.S. and the EU are classified as SMEs. These small companies account for the vast majority of employment and have contributed almost two-thirds of all net new private sector job creation in the U.S. over the past 20 years, adding more than 14.3 million new jobs to the U.S. economy. In Europe, SMEs are even more important, creating 85 percent of all new European jobs between 2002 and 2010.
To address modern e-commerce trade issues, the TTIP agreement, will for the first time include a chapter on SMEs and specific recommendations and reforms in customs and regulatory coherence to help SMEs based in the U.S. and the 28-member EU countries increase exports between the two largest economies in the world. So far, TTIP has seen seven rounds of negotiations in 16 months.
As two highly-regulated, highly-competitive, and highly-integrated markets, it only makes sense the U.S. and EU endeavor to remove some of the unnecessary barriers that still exist between them. The goal of TTIP is to create a mutually beneficial agreement that will open up more economic growth and opportunities on both sides of the Atlantic—this is only achievement if negotiators streamline rules, cut red tape, lower tariffs and harmonize regulations.
The study also provides key policy recommendations, including:
• Eliminate transatlantic tariffs
• Raise duty-free threshold for shipping to $800
• Simplify product testing and safety certification processes
• Recognize equivalent standards
• Make regulatory process more transparent
In addition, the report says demystifying the export process by providing better shared resource information and an integrated, regularly-updated website of available services across the U.S. and EU markets will enable more SMEs to become active exporters.
President Barack Obama and EU leaders met on Nov. 16 in Brisbane on the side of the G20 meeting to discuss the pending TTIP agreement. The deal has three broad areas, according the documents released by the EU: market access; specific regulation; and broader rules and principles and modes of cooperation. It was originally hoped that the deal would be signed by the end of 2014, but that is unlikely to happen. Critics of the deal say it would weaken the ability of EU member states to regulate their own markets and would also increase the influence of multinational corporations in EU affairs.
To download the study, please click here.