A look at the incredible economic benefits of the Transatlantic Trade and Investment Partnership.
As trade initiatives go, the proposed Transatlantic Trade and Investment Partnership has always been an ambitious undertaking, given the massive scale and unavoidable complexity. The proposed initiative, better known as TTIP, would mark the largest bilateral trade agreement in history if enacted. TTIP would bring efficiency and rationality to the rules that govern how €2 billion in goods and services move between two of the world’s great economies every day.
At UPS, we appreciate the broader implications that this proposed agreement would have for businesses, consumers and governments across the U.S. and Europe. And as leaders in an industry that moves €4 trillion worth of goods across the globe every year, we have a street-level perspective of how the agreement would affect our customers.
“We see the enormous benefits that would accrue from this agreement. And we also see the cost of continued inaction. ”
With a new European Commission and a dynamic new European Commissioner for Trade in Cecilia Malmström, we have the best opportunity in some time to reset the course of negotiations that have been drifting in the cross-currents of disagreement and public mistrust.
This agreement is about far more than reciprocal fairness in tariffs.
In two of the most heavily regulated economies in the world, TTIP can serve as a framework for the kind of long-term cooperative regulatory structure that not only opens markets, but brings an end to the conflicts, duplications and inefficiencies that have slowed trade and frustrated importers and exporters for decades.
Few groups will prosper from this agreement more than Europe’s small and mid-sized businesses. One of the most important benefits of a rational regulatory regime is that it would open export growth to far more companies.
My company recently surveyed 8,144 small- and mid-sized businesses with fewer than 250 employees each in Italy, Poland, France, Belgium, Germany, The Netherlands and the UK. In that survey, which was published under the title Europe SME Exporting Insights, smaller businesses said they were hesitant to export outside of Europe – largely because of the barriers posed by the onerous trade regulations and procedures. Customs and regulatory differences, they said, were the biggest obstacles they had to overcome, and the task was complicated even further as consumers have bought more online.
“Few groups will prosper from this agreement more than Europe’s small and mid-sized businesses. ”
Let’s look at just two of the beneficiaries of a new and better system.
Automotive. When we think of automotive trade, we tend to think of the sector as massive cargo ships full of finished vehicles. It is. But it is also about the thousands of small- and mid-sized businesses that are suppliers to the industry; in all, a sector which accounts for 10% of trade between the EU and U.S.
Under TTIP, the automotive sector could generate the largest share of auto production ever covered by a single trade agreement. Reducing tariffs and easing just a quarter of the regulatory burdens could increase vehicle and parts exports to the U.S. by 149 percent between 2017 and 2027.
Healthcare. Healthcare is another industry that would benefit enormously from TTIP. The healthcare industry is undergoing a technological revolution that is not only extending life expectancies, but could make many diseases a thing of the past. But the lack of a trade agreement means that some of the innovation we’re seeing in healthcare stops at the borders, tied up in needless red tape and costly delays.
With TTIP, we see a future where the U.S. and EU would more easily collaborate in medicine and science – bringing medical advances to market faster and more efficiently with no lessening of the regulatory protections. Harmonizing technical requirements would make it easier for research organizations to share clinical trial results.
“ With TTIP, we see a future where the U.S. and EU would more easily collaborate in medicine and science.”
Recognition of Good Manufacturing and Distribution Practices (GMP and GDP) will provide patients with easier access to much-needed innovative medicines.
It’s a very short list of ways a new trade agreement makes sense for such a vital industry. Not only can this spur growth, but speed discovery and improve care.
While the negotiations continue at the highest levels of government, we must consider the effect that the current inaction is having among the smaller businesses that are the biggest source of new jobs. It’s here where UPS is able to provide the greatest value, providing these job creators not only with access to our world-class network, but the 435,000 problem solvers that we employ.
As a company in the business of promoting global commerce, we see up close the incredible opportunities that await if TTIP is enacted. We also recognize the urgency of enacting this agreement without further delay. Every day we spend locked in circular, agenda-driven debates only delays the launch of a new trading structure that will create jobs, prosperity and opportunity.
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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.