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Commerce 01 Apr 2016

TTIP: A great opportunity for Spanish SMEs

Op-ed by Jochen Müller

The U.S. is the largest recipient of Spanish exports outside of the EU, the country with the greatest investment in Spain and the third-largest destination of our investments in the world. This privileged economic and trade relationship has become stronger in recent years and has helped create thousands of jobs in Spain.

93% of the companies that export to the U.S. are small and medium sized enterprises (SMEs) and they are responsible for 35% of all sales to this country (if large companies’ value chain is included this percentage increases to 50%). The prominence of SMEs in the Spanish and European economies means governments need to enact measures that give them more opportunities to grow locally, regionally, nationally, as well as across the EU and the rest of the world.

Creating these opportunities is the main purpose of the agreement being negotiated between the U.S. and EU to establish a Transatlantic Trade and Investment Partnership (TTIP). The main impact studies published to date indicate that the EU as a group, and Spain especially, would benefit the most from this agreement.

SMEs stand to be one of the largest beneficiaries. Regulatory barriers affect them the most, as large multinationals have more economic resources and means to overcome them more easily. Therefore, more than anyone else, it is SMEs that deserve that trade authorities work to strike a deal that offers them actual and full access to the largest market in the world.

The TTIP will help SMEs in many different ways, making their products and services more competitive, with no additional cost, and in very little time.

The main advantages the agreement will have for companies are as follows (in a few words):

›› The TTIP will reduce, or in most cases, eliminate tariffs currently in place between the EU and U.S. It’s true that tariffs are low on average (around 4%), but they are very high for some sectors that are important to the Spanish economy, such as textiles and shoes (15-35%), ceramics (37.5%), tuna (35%), processed food such as pepper or artichoke preserves (15%), cheese (8-25%) and other dairy products (some are even over 100%).

›› The TTIP will also reduce unnecessary bureaucratic costs, which will especially benefit SMEs. There are numerous examples: speeding up import/export customs procedures, avoiding double inspections, establishing standards for the mutual recognition of certifications, simplifying labeling rules, helping small export companies’ export to the U.S. market for the first time, improving labor mobility and establishing a single point of contact for SMEs looking for information or help.

›› The TTIP will also provide access to the U.S. market in areas that were practically impenetrable for E.U. companies. Of these areas, government contracts stand out. A wide range of Spanish SMEs already offer state-of-the-art products and services in architecture, engineering, construction and transportation, healthcare and telecommunication systems. With a single portal with information on government contracts and requirements, this transparency will help SMEs participate in these public tenders.

Agriculture is another sector where we want to expand the opportunities for our companies. The purpose is to facilitate and accelerate U.S. authorization for numerous Spanish farmers who already sell most of their production abroad, but so far have not had access, or only limited access, to the U.S. market.

›› The TTIP will extend the list of protected geographical indications, which gives Spanish companies in the agriculture, food and drink sectors a marketing advantage. This means that Manchego cheese and Jerez wine could be sold in the U.S. market under this name, provided it actually is produced in this region.

Without a doubt, the TTIP offers numerous opportunities and clearer rules for SMEs to export to the most dynamic market in the world, which will allow them to grow, invest and create jobs. Citizens will also see lower prices and a wider selection.

And beyond its importance for SMEs, a trade and investment agreement with the U.S., our closest ally outside of Europe, would boost our influence in the world. We could attract more investment, establish higher standards in global trade and project our values.

But the TTIP cannot come at any cost. We must ensure that it protects Europe’s high standards, our food safety regulations; that it promotes investment and reinforces EU governments’ right to protect their citizens and the environment and that it also benefits developing countries.

Throughout this process, it is important to keep citizens and companies informed regarding what is being negotiated on all topics and address the questions and concerns they raise.

We are aware that the best and most beneficial agreement for European citizens and companies will only be possible if all stakeholders get involved. The European Commission and the Spanish government are working with representatives from different sectors, unions and non-government organizations to accomplish this. We are committed to listening to them and will continue responding as transparently as possible.

This commitment is put into practice by holding information sessions, participating in public debates, publishing a great deal of information online, including each proposed legal text we present to our U.S. counterparts. All this information can be found at:

http://ec.europa.eu/trade/ttip-texts .

Unfortunately, some myths have been spread about the TTIP. For example, even though a big effort has been made, incorrect statements continue to be repeated with false evidence regarding issues like fracking, hormone-treated meat, chlorinated chicken, genetically modified organisms (GMOs), lower labor and environmental standards and the privatization of government services.

The European Commission is committed to negotiate an ambitious, balanced and equitable TTIP. In the end, it will be the EU Council, or the Member States, the European Parliament, and, most likely, the 28 national parliaments of the EU who have the final say over whether or not the agreement is approved.

Here at the European Commission, we are convinced that we will reach an agreement on a TTIP that benefits the European economy, and especially European SMEs, because they are the drivers of growth and create most jobs in our countries. There are thousands of examples to demonstrate this – some have been included in an interactive map on our web site, created in Spain with information on the TTIP in Spanish:

http://ec.europa.eu/spain/sobre-la-ue/ttip/espana_es.htm

You be the judge!

** Jochen Müller is Political counselor, EU Commission in Spain

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