16. March 2016

TTIP - Eliminating non-tariff barriers to stimulate trade

The Bavarian Industry Association (vbw) and The Bavarian Employers’ Associations for the Metalworking and Electrical Industries (bayme vbm) support the conclusion of a comprehensive free trade agreement such as the Transatlantic Trade and Investment Partnership (TTIP) with the USA. The agreement would facilitate trade between the EU and the USA and generate positive economic stimuli as well as remove trade barriers.

Non-tariff barriers impede transatlantic trade

Non-tariff barriers make the import and export of products difficult and costly. They thus have the potential to substantially distort international trade. An example from the automotive industry: Tires have good grip on both sides of the Atlantic. Similarly, safety belt systems in the EU and the USA protect drivers equally well. Yet products have to go through different approval procedures, such as crash tests, in the EU and the USA. The additional expenditure this incurs affects automotive manufacturers as well as their suppliers. They regularly find themselves obliged to make changes to their products to meet requirements specific to a certain country. The costs arising from such non-tariff barriers to trade for the automotive industry are estimated to be some five billion Euros (5.5 billion US Dollars).

TTIP will not lower standards

TTIP has the potential to reduce the costs that companies incur and open up new market opportunities. Small and medium-sized businesses will benefit especially when non-tariff barriers to trade and the associated bureaucratic expenditure are eliminated. SMEs frequently have fewer resources to go through double processes and procedures. Such costs often represent obstructions to market access for small business.

TTIP does not involve the development of uniform environmental, social or safety standards. Rather, TTIP sets the cornerstone for dialog between Europe and America with the goal of jointly developing norms and standards for products in the future. Depending on the sector or product, the EU and the USA could mutually recognize equivalent rules and regulations across all state levels or develop common rules in the future. Doing so could avoid double testing and approval, when the relevant procedures have equivalent underlying industrial norms and rules based on conformity assessment in order to guarantee comparable market access.


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Dagmar Cassan

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