As a native of Germany, who has managed large businesses on both sides of the Atlantic, I believe the Transatlantic Trade and Investment Partnership is of historic importance for both economies. This is true for my role as chairman, president & CEO of AGCO, a U.S. maker of farm equipment, as well as for my position as chairman of the German American Chambers of Commerce of the United States.
The goal of TTIP is to significantly reduce or eliminate tariff and non-tariff barriers between the world’s two most powerful economies. If passed, TTIP will be advantageous for both the European Union and the United States and create one huge market. Moreover, a successfully negotiated TTIP could help the E.U. and U.S. work together on new legislation and administrative regulations such as a coordinated legislative and regulatory approach for the future.
As such, it is a historic negotiation for the German American Chamber of Commerce of the United States. The German chambers in the United States help promote the economic and business interests of entities that work to develop and/or preserve ties between the U.S. and Germany. As Chairman of the GACC and CEO of AGCO, I see the passage of this landmark trade agreement as essential to continued collaboration between U.S. and German companies.
I anticipate TTIP to have many benefits for the U.S. and the E.U. The White House states that a TTIP will aim to boost economic growth in the U.S. and the E.U. and add to the more than 13 million American and E.U. jobs already supported by trans-Atlantic trade and investment. Furthermore, the German missions in the United States shows the commitment that the E.U. and the U.S. bring to negotiate the most comprehensive and largest bilateral trade and investment agreement ever.
In five years, according to the Business Coalition for Transatlantic Trade, an ambitious trade and investment agreement between the U.S. and E.U. would increase their exports to each other by more than $150 billion; economies would increase by about $250 billion and an additional 500,000 high-paying jobs would be generated. The coalition also expects a comprehensive and ambitious transatlantic trade agreement to open markets for trade in goods and services, investment, procurement, capital and people while creating a framework to bridge regulatory differences.
At AGCO, we have a unique perspective on the TTIP discussions. I think that the agricultural sector needs to play a larger role during the trade negotiations to help push through the possible stumbling blocks on the path to an agreement.
The TTIP negotiations will impact the agriculture business and the agricultural machinery sector significantly, and would serve the interest and protection of customers in the U.S. and the E.U.
Freer trade between the U.S. and the E.U. would reduce the red tape and many hoops a lot of us in industry currently have to jump through. Business production and transaction costs would be lowered, providing cost benefits to customers, as well as allowing the marketplace to become even more competitive. In doing this, farmers will benefit from better access to and have wider choices of farming equipment that will boost their productivity.
Freer trade between the U.S. and the E.U. would reduce the red tape and many hoops a lot of us in industry currently have to jump through.
Freer trade would be an important component evolving the global manufacturing and global food security challenges as well. TTIP will in the long run support a more efficient and competitive agricultural sector that in turn will help to feed a growing world population by eliminating the tariff and non-tariff barriers that exist today. Additionally, the passage of this agreement would also help create a strong market environment to face the enormous competition from large emerging market countries such as China. Therefore, the continued success of the agriculture industry will be supported by an easier access to markets across the Atlantic.
We are still facing considerable discrepancies in legislative and regulatory regimes within the agricultural industry that create barriers and inefficiencies.
The agricultural sector can and will benefit from a successfully negotiated TTIP by creating a harmonization of regulatory and standards for machinery entering the E.U. and U.S. agricultural markets. We see this particularly in the manufacturing and automotive industries. These industries conduct different tests on the same products in the U.S. and in the E.U.
For instance, there are some side mirrors that are shaped differently throughout different countries across the world or the test dummies used in the U.S. are different than the test dummies used in the E.U. One standardized test for both markets would be sufficient. TTIP would help regulate standards such as these and many more, as well as save money and time.
With regards to the manufacturing industry, additional benefits such as technical and environmental common standards should be developed like exhaust emissions such as ISO-CEN standards or UN-ECE regulations. There is also a strong need for creating of a common platform of industry design, and safety and certification, between the E.U. and the U.S. Taking these efforts and others will help support transparency and compatibility within industries while maintaining increased levels of safety and environmental protection.
Nevertheless, the TTIP negotiations have come under much criticism. For instance, there is much concern over the lack of transparency during the discussions. Many feel that instead of fostering an environment of democracy, the talks are fostering a more corporate agenda feel.
In addition, many critics of TTIP feel that in the interest of compromise, a not-so-good standard will be chosen as the way to conduct business moving forward simply because a compromise had to be made. There is also much concern over Genetically Modified Organisms (GMOs) foods being imported into Europe, and Europeans are not happy about this as they do not want GMOs in their foods. The major concern is that a few people are charged with making decisions that will affect millions of people on both sides of the Atlantic. However, I am optimistic that as long as TTIP is transparent, it will serve in consumers’ best interest.
The German Chambers of Commerce of the United States and its member companies are very involved in aiding with the discussions and adding suggestions along with other trade and industry organizations in support of TTIP. Even though the stakes in TTIP are enormous, our network believes the negotiations will be successful. For me it is obvious that there are more benefits to passing TTIP than not. The passage of TTIP will open the door for more international companies – especially small- and medium-sized enterprises – to do business in the U.S. and vice versa. I am confident the E.U. and U.S. will be able to negotiate a successful agreement and I look forward to even more dynamic transatlantic business relations.
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