The Institute for Foreign Affairs and Trade (IFAT), together with the EuCham - European Chamber, and the Center for European Neighborhood Studies of the Central European University (CEU) organized an international conference regarding the possible impacts of the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States of America on the small and medium-sized enterprises (SMEs) of Central Europe.
The Institute for Foreign Affairs and Trade (IFAT), together with the EuCham - European Chamber, and the Center for European Neighborhood Studies of the Central European University (CEU) organized an international conference regarding the possible impacts of the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States of America on the small and medium-sized enterprises (SMEs) of Central Europe. This full house event provided an excellent opportunity for the interested audience to get involved in the balanced professional discussions among the esteemed representatives of the diplomatic, business and academic communities. The conference was opened by the Head of Department for Trade Policy from the Ministry for Foreign Affairs and Trade and the closing remarks were presented by the Deputy State Secretary for EU Affairs at the Prime Minister’s Office.
The first panel, moderated by the Director of the Center for European Neighborhood Studies of the CEU, focused mainly on the negotiations and content of TTIP. The representatives of the European Commission and the United States also stressed that the TTIP is more than just a free trade agreement (FTA), as it includes not only the elimination of administrative barriers for market entry, but the development of new common international standards together with the mutual recognition and correspondence of the American and European standards too. The conclusion of the TTIP will have global significance, since it will deepen the current partnership of two developed economic superpowers, which already have the closest investment relations in the world. Furthermore, one should note that the annual trade between the EU and the US is currently already enormous as well; it amounts to more than USD 1000 billion.
The participants of the panel discussion acknowledged that the negotiations are taking place in a difficult political environment. Rapid completion of the ongoing TTIP negotiations started in 2013 is not expected, as the conclusions of less comprehensive FTAs usually used to take at least five years. In recent years, increasing interest of the society towards FTAs could also be experienced. The TTIP negotiation is the most transparent process ever as the relevant documents and information are published by the European Commission on a dedicated website. In the coming months, one of the biggest challenges for the Commission and national authorities will be how they can present the benefits and the importance of TTIP to the stakeholders.
The expert of AmCham Hungary pointed out that the different regulations, lack of transparency and market barriers pose significant obstacles for the small and medium-sized enterprises. Excessive red tape and administrative costs are more burdensome for the SMEs than for the large companies. TTIP will be the first FTA that contains a separate chapter for SMEs and in order to prepare for the future agreement properly, providing targeted and practical information for the stakeholders is crucial. In Central Europe, the SME sector is principally active locally and concerning the employment, SMEs therefore have a significant role to play. As far as the foreign market access is concerned, the spread of customer-tailored services and digital economy can also help for SMEs, however, typically the competitive, innovative and adaptive SMEs have the best chances of succeeding abroad.
In the second panel discussion, prominent economists pointed out that it is very difficult to estimate the potential impacts and the time frames regarding the TTIP, since the agreement is still under discussion and the concrete text of the agreement is not available, yet. However, the negotiating parties are committed to reaching an agreement, which will further deepen and stabilize economic relations between the EU and the US in rapidly changing, globalized world.
The TTIP is a long-term project that will open up new opportunities for the stakeholders. Those SMEs are expected to be able to benefit from the future TTIP that are internationally competitive (e.g. suppliers, subcontractors of multinational companies), offer flexible, innovative and specialized services and speak foreign languages. However, TTIP may indirectly also affect small firms that are active on the domestic market (e.g. import competition), therefore focusing on either enhancing domestic competitiveness or combating the lack of information are crucial. Regarding the sensitive sectors (e.g. agriculture, food and the chemical industry), one should start the preparation for TTIP in time.
At the current stage of the negotiations, the greatest risks could be the lack of agreement, the misinformation of the public and the exclusive aspirations for rapid conclusion of negotiations rather than focusing on the content of the TTIP.