By Raj Subramaniam, Executive Vice President, FedEx
America and Europe have more than just history, culture and values in common. Our economic health depends on our taking every opportunity to increase trade between the continents. After all, the United States and the European Union are each other’s largest economic partners – trading over $2 Billion in goods and services every day.
What’s holding us back from more?
To begin with, the sheer complexity of divergent regulatory systems creates bottlenecks to transatlantic trade. The US and EU each have rules on the books that create obstacles for small and medium-sized businesses attempting to trade across the Atlantic.
Tariffs are generally low, except in some areas – apparel, food products and auto parts – where protectionist measures continue to increase costs to consumers. Add customs red tape, contradictory registration requirements, and duplicate safety certifications and many SMEs just give up on export opportunities.
But the Transatlantic Trade & Investment Partnership agreement (TTIP) presents an historic opportunity to unlock transatlantic trade for SMEs and resolve a host of modern issues associated with the tremendous growth in globalised trade through the internet and e-commerce.
A new report from the Atlantic Council, commissioned by FedEx, offers up examples from a handful of SMEs in the US and EU highlighting their frustration with existing import-export rules — from a cabinetmaker in France who has to retest and recertify his windows to a small Michigan firm facing recertification of exercise equipment; from an oven maker in Sweden having to repeat energy efficiency tests to an Illinois maker of vitamins considered a food or a medicine depending on which side of the Atlantic you’re on. Or a German company that makes crankshafts in a plant in Mississippi who’s charged various duties for intermediate parts as they are exported, imported and re-exported in this new era of globally produced goods. The stories represent tangible examples where SMEs could expand or contribute to job growth if the US-EU markets were more open and the regulatory processes simplified.
Achieving these objectives may require a new approach in the next year, starting with the recognition that the American-European relationship is a strategic partnership, not an adversarial one. If the US and EU can identify bottlenecks and unnecessary red tape and then devise creative ways to bridge the differences, small and midsize businesses on both sides of the Atlantic will benefit.
There are no more one-way streets in globalized trade. We need to free up the business tools SMEs need in order to have open, uncomplicated access to customers on both sides of the Atlantic. We all come out ahead when we see trade as a two-way street.