Transatlantic Trade Investment Partnership (TTIP) for businesses
How TTIP will benefit businesses.
The UK government is aiming for an ambitious Transatlantic Trade Investment Partnership (TTIP) agreement between the EU and the US. It will make it easier for businesses in the EU to access a market of more than 300 million American consumers by:
- cutting trade tariffs
- reducing differences between regulatory requirements
- simplifying customs processes
In particular, small businesses are hardest hit by different regulations which aim to achieve the same outcome. Making these regulations more aligned will help small businesses trade with the US.
Tariffs
TTIP should remove most of the remaining trade tariffs between the EU and the US. Some US import tariffs are still high. For example:
- over 20% on some food and drink products
- over 25% on some ceramics
- over 25% on some clothing and footwear
Even in other areas where US tariffs are low, the large volume of trade between the UK and the US means that these are still a significant cost for British exporters.
Complying with EU and US regulations
Many companies, especially small businesses, that want to export to the US find it difficult to:
- get information on US regulations that affect them at both state and federal levels
- meet US regulatory requirements despite levels of product safety being equally high in the EU and US, which means they need to produce 2 versions of the same products
- meet testing or licensing requirements to sell their products
- make sure that their goods are able to pass smoothly through customs
This means many companies with good products decide not to sell into the US, or do so in a way which is not profitable.
Where standards are equally high on both sides, TTIP aims to make regulatory requirements more similar between the EU and the US. This will ensure that a product considered safe in the EU is also accepted in the US.
Larger companies may have the resources to overcome these barriers and can even set up facilities in the US. TTIP should therefore especially help small businesses to expand their business into the transatlantic market.
Improving customs processes
Improving customs processes at the border reduces delays and unexpected complications, giving traders quicker and more reliable shipments. We are looking to reduce the amount of paperwork required from small businesses who export.
On average, to put a shipment through customs a company has to provide 200 pieces of data, 30 of which are repeated at least 30 times. Reducing this duplication would increase efficiency and decrease costs.
Dedicated support for small businesses
TTIP will include dedicated provisions for small and medium-sized businesses. This is a first for an EU free trade agreement. The chapter will help small businesses to get the most from TTIP. We want it to include:
- better access to information by putting regulations information and customs requirements from both the EU and the US in one place so it is easy to find
- a way for small businesses to raise issues related to doing transatlantic businesses, and help them get their problems resolved
Cheaper materials
The reduction of tariffs and import/export costs will also apply to materials which originate from or pass through the US. This should lead to decreased costs for suppliers, who can pass these savings down the supply chain to businesses and drive down costs. This would also benefit businesses which do not export to the US.