TTIP Troubles Free Trade Is a Family Affair

German and European family-run businesses need a free trade deal with the United States, argues a Handelsblatt Global Edition commentator.
The TTIP agreement can really benefit family firms. Source. Bloomberg

Many family businesses have historically traded across borders. Today, it’s taken for granted that business is conceived, planned and implemented internationally. Half of all small- and mid-sized German firms with more than €2 million in annual sales are exporting abroad. However, this is not at odds with their local focus, as family firms can be both global players and closely tied to their regions.

That is exactly why we as an association welcome the Transatlantic Trade and Investment Partnership, or TTIP, with the United States. The entire German and European economies will benefit from TTIP, regardless of whether or not specific companies are exporters or suppliers. TTIP eliminates expensive customs duties and reduces unnecessary and duplicate requirements for products and production standards when possible, without reducing the quality buyers are accustomed to.

Unfortunately, on this issue an enormous misunderstanding prevails on the European side of the Atlantic, namely that the safety standards are higher here than in the United States. Especially in Germany, there have been half-truths used to stir up fear of TTIP, primarily when it comes to food. As a result, it will be closely examined in each sector what standards are suitable for a mutual recognition and which are explicitly incompatible. For future standards it would be foolish if the two most important economic blocs in the world would not communicate on the basis of a treaty.

We family businesses propose that it be checked branch-by-branch as to the areas where we can have mutual recognition of each other’s standards. If mutual recognition is not to be possible, then, for example, alternatively it could be relegated to the international ISO standard. All the scaremongering about lower standards would therefore be obsolete. Products that have not yet been allowed on the market will also not be negotiable under TTIP.

Free trade and common markets are the success story of the European Union. Now it is time to carry that over into American-European relations

For us family business owners, TTIP and the consequent harmonization of standards primarily mean a reduction in bureaucracy and cost savings. The trade agreement frees up businesses’ money for investment. That creates jobs – up to 110,000 in Germany alone, according to the Ifo economic institute. For Europe, the figure probably amounts to an additional 400,000 jobs. Even if no one can predict the exact effect, it would be disastrous if we failed to implement TTIP.

As Europe’s competitiveness falls increasingly behind, many pine for debt-financed investment programs to descend from heaven. In such an environment it can’t be stressed enough that TTIP is a free program for growth and against growing unemployment.

The European Union must succeed in breaking down as many economic barriers as possible. It has been on the right path so far: The European Union has already concluded 50 free trade agreements and partnerships. Europe is currently conducting negotiations with approximately the same number of partners.

Through fundamentally useful tools such as an investment protection agreement, TTIP offers unparalleled chances to implement international improvements such as disclosure obligations and standardizations. If Europe were instead to put its head in the sand, no arbitration court in the world could help the matter. Free trade and common markets are the success story of the European Union. Now it is time to carry that over into American-European relations.

In doing so, it is important to operate in as transparent a manner as possible. Never before has the attention on a free trade agreement been as great as it is with TTIP. The communication from the European Union, and the German government, was in need of improvement from the beginning, but since then much has changed for the better. The European negotiating mandate is publicly available, official information portals offer details on which topics are under negotiation and which are not. Public live streaming would, however, be going too far when it comes to international agreements.

One thing is clear for family business owners: What counts in the end is the text of the treaty. It now looks as if the European and national parliaments will decide on the treaty. Sufficient time should be reserved for the members of parliament and the public to examine and comment on the agreement. We will not buy a back-room-brokered deal, but Europe should also not be deprived of a unique chance for economic growth.

 

TTIP will be one of the key topics at the 1st European Family Business Summit, hosted by DIE FAMILIENUNTERNEHMER on 25 November 2014 in Berlin. Highlight of the event will be the keynote speech by Chancellor Angela Merkel. For further information, see http://www.europeanfamilybusinesses.eu.”

 

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