Smaller Businesses Face Costly Regulatory Barriers in Exports to EU, Says ITC
European Union (EU) technical regulations for imports pose obstacles for U.S. small and medium-sized enterprises (SMEs), said the U.S. International Trade Commission (ITC) in a recently released report. The Office of the U.S. Trade Representative (USTR) requested the report, in order to properly address trade barriers as part of Transatlantic Trade and Investment Partnership (TTIP) negotiations. The costs of meeting the EU regulatory and other requirements affect SMEs more adversely, said the ITC. Exporters must hire EU representatives to navigate the requirements and conduct more standards tests, said the report.
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“SMEs contended that these rules tend to affect them more than large exporters because they relate mainly to the approval process for the product itself; the costs must be borne regardless of the quantity of goods shipped,” said the report. “Large firms have a greater volume of sales over which to spread these costs. Although the situation with tariffs is somewhat different in that the tariff paid varies directly with the value of the goods shipped, SMEs also perceived that tariffs affect them disproportionately.”
USTR is urging comprehensive elimination on tariffs in TTIP, notably in the agricultural and textile sectors (see 14031101). “Small businesses are the backbone of economic growth, job creation, and a stronger middle class in communities across America. Nearly 95,000 U.S. small businesses export to the EU, sustaining good jobs at home,” said USTR Froman in a March 28 press release. “Tackling trade barriers in the EU that may disproportionately affect small businesses, and expanding market access for U.S. firms of all sizes through TTIP, will help U.S. companies, farmers, and workers unlock opportunity by finding new European customers and boost job growth.”