Report: A transatlantic agreement but at what cost to SMEs?
Alongside the round XI of TTIP negotiations between the European Union and the United States, in Miami, Veblen Institute published a report called: A transatlantic agreement but at what cost to SMEs? The potential effects of the United States/Europe free trade agreement (TTIP) on local economies and SMEs
In the confrontation between promoters and opponents of the proposed Transatlantic Trade and Investment Partnership (TTIP), it is difficult to hear the voice of the SMEs (Small and Medium Enterprises). Yet because of their importance in European economy, smaller enterprises have some of the strongest reasons to be concerned. Ever since negotiations started, high-level European and American institutions and the largest employers’ organisations have been vocal about the supposed benefits of such an agreement for SMEs. This contrasts with the much more restrained position of SME representatives themselves.
Only 0.7% of European SMEs export to the United States and the value of exported goods and services is less than 2% of the added value produced by European SMEs as a whole. Yet despite the relative lack of importance of transatlantic trade for European SMEs, TTIP could have a seriously de-stabilising effect on them by (i) significant diverting inter European trade (which represents the bulk of the SME exporting) to the USA (ii) encouraging the importing of cheap American products and (iii) supporting large groups to enter European markets in which SMEs are strong.
Over the past months, numerous European SMEs have expressed their concern, both individually and collectively, over the potential risks to their activity resulting from the current negotiations. To get a better understanding of the subject, several organisations, and in particular the European Economic and Social Committee, have recommended that the European Commission make a detailed assessment of the impacts the TTIP would have on each country and each sector. To date, this legitimate request remains unanswered.