Negotiations on the controversial Transatlantic Trade and Investment Partnership (TTIP) continue to ruffle feathers in the business world – but what exactly isTTIP, and how will it affect UK SMEs?
TTIPis a proposed trade agreement between the US and theEU that seeks to facilitate tradeby reducing tariffs and regulatory barriers. The deal, which is expected to beratified in 2018, aims to promote economic growth by harmonising regulation in sectors such as agriculture, pharmaceuticals and energy. The deal has caused controversy due to the secrecy of negotiations, alongside fears thatTTIPwill give too much power to big businesses by allowing them to bypass laws in areas such as food and environmental safety.
The pros and cons
The British government hopes thatTTIPwill delivera trade boost of£10billionto the UK economy, and suggests that citizens would enjoy cheaper goods due to theremoval ofEUimport tariffs. The Chief Executive Officer of Deutsche Post DHL,FrankAppel, recently told the World Economic Forum thatTTIPwould be a "terrific help for the world economy" and could "drive economic growth in Europe and the US". LabourMEPJudeKirton-Darling saysTTIPcould "present us with a unique chance to regulate globalisation and to promoteEUstandards".
However,TTIP is attracting much criticism, particularly from the 480 organisationsaffiliated with the 'StopTTIP'campaign. The anti-poverty charity, War on Want, objects to the covert nature of negotiations and predicts thatTTIPwill lead to the loss of some1 million jobs. The charity's Director,John Hilary, warns thatTTIPis "not about the US versus theEU, it's about big business versus small. The idea is to remove regulations . . . but many of these are in favour ofSMEs." The CEO of MVF Global,TitusSharpe, also suggests thatTTIPwill negatively impact UK SMEsby forcing them into unfair competition with US companies, who enjoy lower standards and costs.
As transatlantic negotiations continue in secrecy, the potential impact ofTTIPonSMEs remains uncertain. Small businesses can prepare for the unknown by future-proofing their existing cash flow and building reserve funds. If you’re an SME owner, contact Dukes Bailiffs today to find out how we can help.