How can T-TIP benefit SMEs?
The Transatlantic Trade and Investment Partnership will create new opportunities in both the United States and the EU. These opportunities will be especially valuable for SMEs, given that trade barriers tend to disproportionately burden smaller firms, which have fewer resources to overcome them than larger firms. Potential T-TIP benefits for SMEs include the following:
Tariffs. There are millions of small manufacturers and producers in Europe and the United States. They produce some 30 percent of goods exports from both markets. As a result, SMEs are very well-placed to gain from the elimination of tariffs that TTIP aims to achieve. In sectors where tariffs are still relatively high, those gains could be very significant. In today’s competitive global marketplace, even small increases in a product’s cost due to tariffs can mean the difference between making and losing a sale for SMEs. In some cases, the removal of tariffs could allow SMEs to sell their products across the Atlantic for the first time.
Regulatory issues and non-tariff barriers. Smaller businesses on both sides of the Atlantic can be disproportionately affected by non-tariff barriers, which can take the form of requirements applied at the border or “behind-the-border” barriers. Compliance with such measures can be challenging and resource intensive.
Services. The European Union and the United States are the world’s largest service exporters, and many service providers – e.g., accountants, engineers, information technology specialists, and environmental services consultants – work in smaller businesses, often as part of the value chain of larger firms. These smaller service providers would benefit from the improved legal certainty and new market access that TTIP would provide.
Government procurement. Improved transparency of and access to government procurement markets would also benefit small firms. This is important because public entities in both the United States and the European Union buy a broad range of goods and services from private sector businesses, which leads to job-supporting opportunities for industries that provide consulting services, infrastructure, and other products and services.
Customs and trade facilitation.Lower costs, more transparency, and less red tape at borders could benefit small exporters and producers even more than their larger competitors, as well as small retail, wholesale, transport, and logistics firms. A key aim of the TTIP negotiations is to boost trade by reducing unnecessary border costs and delays for traders by improving predictability, simplicity, and uniformity in border procedures. Customs and trade facilitation reforms through TTIP would make it easier for SMEs to participate in transatlantic trade and to support jobs through that trade.
Intellectual Property Rights. SMEs are also leaders in innovation and creativity that drive job creation and economic growth in the transatlantic marketplace. They need strong protection of their intellectual property rights (IPR), particularly because they are often highly vulnerable to infringement of their IPR. The TTIP will reaffirm the shared transatlantic commitment to strong IPR protection and enforcement for SMEs, including in our other trading partners.
Electronic Commerce. The Internet is empowering millions of U.S. and EU SMEs to reach foreign customers, thereby increasing their revenues and supporting jobs in local communities. Online SMEs are much more likely than their offline counterparts to export to customers in multiple countries. TTIP provisions that promote the duty-free treatment of digital products, and consumer access to services and applications of their choice on the Internet can help American and European SME retailers and service providers thrive in the online marketplace.
Gains through value chains.Many smaller firms that do not export directly to the EU or the United States would nonetheless benefit from TTIP by selling intermediate goods and services to companies that do trade across the Atlantic. In this way, SMEs would benefit from the agreement even if they are not yet exporting outside of their home market directly.
(Source: Publications Office of the European Trade Commission)