Tuesday

18th Sep 2018

Magazine

Are the EU and US ready for free trade?

  • US president Barack Obama's term is likely to end before TTIP is concluded, but there is no guarantee that the next administration would support it. (Photo: Reuters)

European business broadly backs the The Transatlantic Trade and Investment Partnership (TTIP), because the EU-US pact is expected to boost economic growth.

But Europe's engineering industry has lit an amber light, saying that the two markets are very unlike and that a lot of effort is needed to be able to achieve a good trade deal.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • TTIP faces political an popular resistance on both sides of the Atlantic. (Photo: Greenpeace)

American firms would get direct access a single European market, which has the same rules and standards in all 28 countries. But the US market is not as unified or easy to sell into.

Testing of products is regulated by the US Department of Labour's Occupational Safety & Health Administration, (OSHA). Currently, 39 different product types are subject to testing and certification in the US.

OSHA's main priority is workers' health, which is why it operates under the Labour department.

The products are tested and certified at 17 privately owned test centres (NTRLs), but the 17 US entities are not obliged to recognise each other's results.

One third of export affected

Up to one third of Europe's exports to the US is subjected to this system. As much as 75 percent of electronic exports are affected.

"The decentralised nature of the US system makes it difficult for European companies, in particular small and medium size businesses," said Adrian Harris, Director General of Orgalime, representing the European engineering industry.

"In practice, such fragmentation and lack of transparency means that European companies need to spend much more time and effort to continually monitor new standardisation work", he said.

"This also results in the need to purchase standards from different sources, which is becoming increasingly complex and costly".

When an EU company sells, for instance, an electronic sensor to US clients, the product must jump through 17 regulatory hoops. But under TTIP, its US competitor would have direct access to 28 markets through just one.

One study found that 5 percent of the price of any product sold in the US market is made up of certification costs.

US behind the curve

There's been little talk of the issue until now, one source told EUobserver. But OSHA recently began negotiations with the European Commission as part of the TTIP process.

Orgalime's Adrian Harris underlined that industry is not against TTIP as a whole.

"You'll never find Orgalime campaigning against TTIP. We depend on trade and want as much free trade as possible," he said, adding that export to the US in the sector had grown from €75 billion in 2010 to €116 in 2015.

He said both American and EU firms would benefit from unified global standards.

Some US multinationals, such as GE, have managed to set global norms with their products. But in general US regulators have less international standards than the EU.

Running short on time

TTIP would form the world's biggest free trade area if it is agreed.

It faces political and popular resistance on both sides of the Atlantic.

In Europe, the pact would have to be approved by an increasingly sceptical European Parliament as well as member states.

In the US, president Barack Obama's term is likely to end before TTIP is concluded, but there is no guarantee that the next administration would support it.

Presidential candidates from both leading parties, Donald Trump and Bernie Sanders, have opposed trade agreements for decades.

The leading Democratic Party candidate, Hillary Clinton, endorsed the Trans-Pacific Partnership, a US trade pact with Asian states, when she was secretary of state. But she has flip-flopped on free trade.

"I have said I oppose the TPP agreement - and that means before and after the election," she said in early May at an election rally.

This story was originally published in EUobserver's 2016 Business in Europe Magazine.

Click here to read previous editions of our Business in Europe magazine.

Magazine

The Business of Nature

The third edition of EUobserver's Business magazine looks at the bioeconomy – the parts of the economy that use renewable biological resources.

Magazine

A sustainable death wish

No one can escape death. But choices over how one's body is disposed of could either lessen or increase your carbon footprint.

Magazine

Bioeconomy is a win-win strategy for Finland

"The big problem in the world today is a lack of resources and a lack of bio-diversity," says Finnish environment minister Kimmo Tiilikainen. His country plans to produce what the world needs the most.

Magazine

Dual food quality: a recipe for east-west EU friction

The accusation by some eastern European leaders that food companies were shipping inferior products to the eastern part of the EU has put the European Commission in a bind - leading to a months-long struggle to find a response.

News in Brief

  1. EU investigating BMW, Daimler and VW 'collusion'
  2. Spain wants special Gibraltar chapter in Brexit deal
  3. Italy cancels Vienna talks over South Tyrol 'dual citizenship'
  4. Britain will not accept Brexit deal with Irish Sea border
  5. Slovakia seeks witness to journalist killing
  6. Finland's Stubb considers running for EU commission job
  7. Romania ponders anti same-sex marriage referendum
  8. EU lawyers back Slovenia in Croatia border dispute

Magazine

The Business of Nature

The third edition of EUobserver's Business magazine looks at the bioeconomy – the parts of the economy that use renewable biological resources.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  2. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  3. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  4. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  5. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  6. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  7. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  8. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  9. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  10. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  11. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  12. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want

Latest News

  1. EU promotes 'Egypt model' to reduce migrant numbers
  2. Tensions mount over Kosovo-Serbia deal
  3. New book: Why war is coming
  4. EU parliament will not budge on office expenses
  5. Why Orban's project to reshape EU politics will be unsuccessful
  6. 10 years after Lehman Brothers what has changed for EU consumers?
  7. Sefcovic launches bid to be EU Commission president
  8. Is Russia blackmailing the Council of Europe?

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  2. Mission of China to the EUChina: Work Together for a Better Globalisation
  3. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  4. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  5. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  6. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  7. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  8. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  9. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  10. FIFAGreen Stadiums at the 2018 Fifa World Cup
  11. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  12. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank

Join EUobserver

Support quality EU news

Join us