November 14, 2014
The Transatlantic Trade and Investment Partnership: Big Opportunities for Small Business
New study highlights benefits of transatlantic trade agreement for small businesses in Europe and the United States
Small and medium-sized enterprises (SMEs) in both the United States and European Union stand to gain significantly from the implementation of an ambitious Transatlantic Trade & Investment Partnership (TTIP). Using data from a targeted survey and interviews conducted with SME executives on both sides of the Atlantic, The Transatlantic Trade and Investment Partnership: Big Opportunities for Small Business cites three core challenges for SMEs as they begin exporting: a lack of clarity on how to get started, problems finding the right clients, and a confusing mix of regulatory differences and contradictory registration requirements between the United States and the European Union.
SMEs represent the vast majority of all firms on both sides of the Atlantic and are responsible for over two-thirds of net new job creation over the last decade in both the United States and the European Union. Yet, they face significant barriers when attempting to export their goods and services.
As two highly-regulated, highly-competitive, and highly-integrated markets, it only makes sense the United States and European Union endeavor to remove some of the unnecessary barriers that still exist between them. Moreover, TTIP marks the first time that an American or European trade agreement will include a specific chapter on SMEs and particular recommendations to help SMEs based in the United States and the 28 nations of the European Union increase trade and investment between the world’s two largest economies.
The study, authored by Global Business and Economics Program Associate Director Garrett Workman, is intended to ensure that the agreement adequately responds to the concerns of real world problems faced by small businesses on both sides of the Atlantic. With that in mind, our new report uses a case study approach, examining the export experiences of American and European businesses from a range of industries to identify concrete challenges that SMEs must overcome when trying to trade across the Atlantic. By identifying the most significant challenges, we can outline specific policy recommendations to ensure TTIP helps to remove the roadblocks.
Some of the report’s key policy recommendations highlight that TTIP should:
- Eliminate transatlantic tariffs;
- Raise duty-free threshold for shipping to $800;
- Simplify product testing and safety certification processes;
- Recognize equivalent standards across the Atlantic; and
- Make the regulatory process more inclusive and transparent.