“German angst” is once again doing the rounds in the German media. The use of chlorine dioxide for water sanitation in the American poultry industry has become a symbol for the disputes over international free trade and an agreement between the European Union and the United States.
Almost every day the dangers are published in vivid color: A secret agreement, hatched in the dark back rooms of Brussels, would supposedly negate the high environmental and social standards in Europe and especially Germany. Unfortunately, rational arguments are falling on deaf ears in the public debate.
Beyond all myths and prejudices, the reciprocal reduction of tariffs and other trade inhibitors lies at the heart of the negotiations. Because that is what small and medium-sized businesses suffer from the most, particularly in Germany.
The German textile and fashion industry, typified by medium-sized businesses and driven by exports, generates annual revenues of €28 billion (about $37 billion). Germany is world market leader with its highly innovative technical textiles used for medical, construction, air treatment and transport technology. With the United States as the third largest export market, the German textile industry achieved a foreign trade surplus of €200 billion (about $267 billion) in 2013.
Customs clearance and compliance with all regulations already increase the prices for German textile products in the United States by up to 20 percent without taking regular tariff rates into account.
Some of the regulations are odd: If a men’s coat in anorak-style is made primarily of cotton, the customs charge is 9.4 percent. But predominantly synthetic fibers push the rate up to 27 percent. This is highly complicated and almost impossible for small and medium-sized manufacturers to track.
Free trade means breaking down superfluous bureaucracy and harmful protectionism.
Then the labeling requirements for men’s shirts: In the United States, labels must be attached to the neck area. This rule alone – unique in the world – requires separate, costly production for exports to America. Such trade barriers are arbitrary. In discussions, the fact is often omitted that many current U.S. regulations are much stricter than in Germany. For example, the U.S. limits on the amount of benzene in gasoline and mercury in power plant emissions are far lower than the German threshold. Therefore, widespread worries that U.S. standards might be too low are wide of the mark.
Efficient harmonization, or at the very least mutual recognition of standards, will enable trade barriers to be reduced in a reasonable way, maintaining the same levels of information and protection for the consumer. This would benefit manufacturers and consumers on both sides of the Atlantic.
Free trade means breaking down superfluous bureaucracy and harmful protectionism. As one of the world’s strongest exporting nations, Germany requires trade to be as free as possible.
That is why the proposed Transatlantic Trade and Investment Partnership is the right path – perhaps with a little fine tuning. A little less “German angst” and a little more optimism would do us all good.
Ingeborg Neumann is the Association of the German Textile and Fashion Industry’s president. She can be reached at: email@example.com