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08 July 2014

TTIP: real opportunities for SMEs?

The Commission needs to create less spin and more concrete benefits for small businesses

Reinhard Bütikofer MEP, European Green/EFA Group

With the 6th round taking place on July 14 in Brussels, negotiators are planning to discuss the opportunities TTIP presents for small and medium size enterprises. Much has been written about the benefits the deal would produce for SMEs here and in the United States, most recently with David Caro of the European Small Business Alliance and the Federation of Small Businesses (FSB) calling it “a land of opportunity for small businesses.” 

But whenever we´re promised more than usual, we should examine the gospel that´s being spread with particular care.

DG Trade have made it a priority to promote the SME angle in light of increasingly negative press as to who will ultimately benefit from TTIP. Fears abound that multinational companies operating in other jurisdictions could gain unfair advantages through TTIP from new rules which will not be applicable to SMEs operating only on a national level. Trade Commissioner De Gucht was even forced to downplay the dominance of corporations in the talks during a meeting in London on June 25. So is the rhetoric on SME benefits in TTIP genuine or just spin?

The SME chapter

Negotiators have introduced a chapter aimed at tackling some of these concerns. The Greens are supportive of initiatives to support and promote trade for small businesses but at the same time there is a need to adequately assess what this will amount to in reality.

The opportunities created must be based on the real needs of SMEs. To date it is questionable that the SME chapter contains within it the capacity to significantly enhance transatlantic SME trade. It seems that negotiators are limited in what they promise to provide under TTIP. It amounts to little more than increasing access to information for SMEs operating internationally. There has been talk of strengthening cooperation through developing ways to facilitate SMEs’ access to information on EU and US regulations or exchange of information on best practices. Not exactly the most ground-breaking suggestions.

There are also plans to explore opportunities for linkages and exchanges between EU and US entrepreneurial programs and regional innovation clusters and continue work with bodies already in existence, such as the Transatlantic Intellectual Property Rights Working Group.

While these initiatives do not present notable risks, if this chapter amounts to mere commitments to increase information sharing or continue work through committees that already exist, then we must ask ourselves whether TTIP is the appropriate forum to address such tasks. Could better results be gained for SMEs through tailored policies at Member State level, for instance, where the majority of small businesses operate and require specific approaches? So far we see nothing particularly innovative or new in what the Commission suggests for SMEs under this agreement.

ISDS-lite to cause more problems than good

One Commission plan to "help" SMEs is in regard to security for their investments. Normally, access to the Investor-State Dispute Settlement (ISDS) can be prohibitively expensive, and thus only remains viable for the largest multinational corporations.

The recent EU-Canada trade deal CETA (which remains on pause) has revealed plans to cut these costs for SMEs. Article 10 of the ISDS chapter foresees the possibility to have 1 arbitrator instead of 3 if both disputing parties agree, thereby reducing the exorbitant costs involved in taking a case.  If such a clause was to be included in TTIP, it could however increase the number of ISDS cases tremendously.

Greens have warned of the dangers of ISDS undermining our democracy and equitable access to justice and we remain clearly opposed to it. If we must decide between supporting cost-cutting ISDS access for SMEs or its complete removal from the deal, we must support the latter. It presents too many dangers for European citizens, and we're doubtful TTIP will even pass a vote in the European Parliament if it remains included.

Procurement: EU moves to undermine American SMEs?

Access to US procurement for EU suppliers is a key demand by the EU-side. This includes a demand that the US reconsider their pro-SMEs policies, in particular US State preference programs such as set-asides for small businesses, which reserve a specific share of contracts to small enterprises. The Commission presents this request as a fight against measures which negatively discriminate EU SMEs. But by making such demands, the EU jeopardises US policies which in fact help their SMEs improve their access to public procurement. By doing so the EU contradicts many pro-SMEs measures which they are supposed to be promoting. The Greens believe more needs to be done to protect, not undermine, existing pro-SME policies.

SMEs should have their voices heard

The lack of transparency surrounding the TTIP talks has not been to the benefit of SMEs. The European Association of Craft, Small and Medium-size Enterprises (UEAPME) has warned that there needs to be more transparency and timely information on the negotiation rounds. The evidence of unprecedented access to negotiators from some of the largest multinationals has set the tone for what TTIP represents to many; a back room deal for the largest corporations. Organisations like UEAPME have requested to become a member of the advisory committee on TTIP. Allowing them in would not level the playing field, but would at least improve their access to some information.

Just including well-sounding, but not very consequential SME-specific recommendations could amount to little more than good PR for TTIP. That we will not fall for. Without getting rid of the pro-big-corporation bias that has dominated TTIP negotiations so far, SME friendly language will not sway us. 

Image by Heinrich-Böll-Stiftung (Flickr: Reinhard Bütikofer) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

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Commission launches SME Survey in the context of the Transatlantic Trade and Investment Partnership (TTIP)

Opening Date: 07/07/14

Closing Date: 14/07/14

Link to overview.

Objective of the consultation

The European Commission is launching an on-line SME survey in the context of TTIP negotiations to collect information regarding the trade barriers currently faced by European industries and individual companies when doing business with the US.

Help us understand the problems experienced when exporting to the US so that the Commission's negotiators of TTIP get the best deal for European citizens and companies. We would like to ask you to be as specific as possible in your answers.

The survey is being carried out by Ecorys, a consultancy working on behalf of the European Commission. Your answer will also feed into Ecorys' overall independent assessment of the impact of an EU-US trade agreement but no reference to the survey respondents will be made in its reports. The information you give us will be treated as strictly confidential and anonymous.

Direct link to the survey

In case anything is unclear to you or you would like to receive additional information, please do not hesitate to send an email to tsia-ttip@ecorys.com

 

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