On April 29, 2014, I had the opportunity to be part of a European Business Roundtable in Wilmington Delaware that discussed the Transatlantic Trade and Investment Partnership. This session was presented by Lindi von Mutius of the German American Chamber of Commerce.
If you are doing business as an American company in Europe or as a European company in the United States this has some far reaching implications for trade and competitive advantages in both regions.
If you are not aware of these negotiations, I strongly recommend to do some research with your trade associations and your chambers of commerce to explore the opportunities and pitfalls with which your company could faced.
The Centre for Economic Policy Research shows that TTIP could boost the EU’s economy by €120 billion, the US’s economy by $125 billion and the rest of the world by €100 billion.
It is focused on the following:
- Eliminating Tariffs
- Opening Service sectors
- Liberalization and investment protection
- Access to government procurement markets at all levels of government on both sides of the Atlantic
The harmonization of regulatory issues and non-tariff barriers to trade are a significant opportunity for trading companies in this potential agreement. Lindi von Mutius noted, “The goal of this trade deal is to reduce unnecessary costs and delays for companies, while maintaining high levels of health, safety and consumer and environmental protection.”
It is costly, for example, to comply with different standards in the USA for safety versus the EU standards while essentially accomplishing the same outcome. Agreeing to not replicating actions that accomplish the same goal is a tremendous potential cost reduction.
Eliminating the frictional expense of duplicate compliance and creating a market place that achieves the lowest cost will benefit both economies in jobs, lower costs and economic growth. This is an exciting opportunity for companies involved in cross border activity to expand their competitive advantages and to drive higher growth and market share.
Our firm is active in this initiative and can be a resource in evaluating the positive and negative implications relative to risk management and expansion in the different markets. It is definitely an exciting time to be participating in cross border initiatives.
Author: John Wright, President, CPCU, CIC, JKJ&H