A successful outcome to the trade talks between Europe and the United States will help rebuild European competitiveness, and ensure the EU remains a leading actor in global trade
‘Nils S. Andersen, CEO of A.P. Moller – Maersk – and Chairman of the Trade and Market Access working group at the European Round Table of Industrialists.
Businesses and consumers benefit when trade barriers that stifle economic growth are removed. That is why it is of great importance that talks to create a Transatlantic Trade and Investment Partnership (TTIP) between Europe and American are successful. An ambitious and comprehensive trade and investment partnership would create a level playing field across two markets that are home to 800 million people and between them account for 40% of global trade, giving consumers access to a greater choice of products and service. The benefits of such an agreement would outstrip those of any other trade deal signed by the European Union in its sixty year history. A study by the Centre for Economic Policy Research, estimates it would boost EU GDP by around €110bn-180bn over the coming decade.
The European Round Table of Industrialists, whose 50 members include A.P. Moller – Maersk, BMW, Telefonica and Royal Dutch Shell, would like to see the removal of all industrial tariffs on goods exported to and imported from the US. Much progress has already been made on this issue – the average tariffs on such goods is currently just 4% – but the volume of transatlantic trade is huge and further action would result in significant gains.
Most importantly a successful TTIP agreement requires the elimination of non-tariff barriers, which can be as high as 20% in the car industry and food and drink sector. This would open up markets to the small businesses who are hit hardest by the cost of meeting them.
The talks should create a unified approach to regulation that will end the need for some products to be tested by two sets of safety bodies or inspection agencies on either side of the Atlantic. The cost of that duplication is ultimately borne by the customers who buy their products. Making our regulations more compatible does not mean accepting lower standards of safety, of course, but adopting the best features of two systems that were created with the same aim of protecting consumers.
It is also very important that we bolster transatlantic trade by ensuring European and American companies who invest in the EU and the US know they are doing so on the same legal basis as their domestic competitors. As the world’s largest foreign direct investors, the EU and the US should send a strong political signal that they are jointly committed to robust investment protection globally, and the many EU and US jobs that depend on it.
Finally, the importance of guaranteeing a secure energy supply for European businesses and consumers alike should be recognised. The best way of achieving this is to adopt the same free market principles that have served other sectors well. Industrial competitiveness is all but impossible without security of supply and affordable energy. Currently energy products, particularly oil and gas, exported from the US, must go through a lengthy licensing and authorisation process. Abolishing this regime will fuel growth.
A successful outcome to the TTIP talks will help rebuild European competitiveness, and ensure the EU remains a leading actor in global trade at a time when emerging or resurgent nations are taking a greater share of economic growth. Political leaders need to press ahead now with the aim of signing a landmark free-trade agreement next year that will preserve European prosperity at the start of a new era of global competition.