Last month, European Union and U.S. negotiators met in New York for the latest round of talks on the Transatlantic Trade and Investment Partnerships. Both sides are working hard to conclude a deal by the fall.
The Transatlantic Trade and Investment Partnership, commonly known as TTIP, is more than just a free trade agreement between the European Union and the United States; it is an opportunity for the world's two largest economies to set the global standard in international commerce.
TTIP seeks to reduce the remaining tariffs, streamline customs processes, and harmonize regulatory standards between the EU and U.S. These regulatory variances in their current form can make it more difficult for companies to enter new markets. Some estimates indicate that costs associated with dealing with two sets of regulatory requirements can be equivalent to customs duties of 10-20 percent. For small-to-medium sized enterprises, this cost can inhibit their ability to enter and expand into European markets, like the United Kingdom.
While the Houston business community comprises multinational corporations and entrepreneurs alike, the small-to-medium sized enterprises are the true lifeblood of the regional economy. For these entrepreneurs, the benefits of this trade deal could be profound. U.S. Secretary of Commerce Penny Pritzker announced at a recent international trade show that small-to-medium sized enterprises stand to gain 90 percent of the benefit from an ambitious TTIP agreement. Reducing redundant regulations, burdensome localization requirements and too-high tariffs will not only remove many financial burdens from small-to-medium sized enterprises that do business across the Atlantic, but will also encourage new trade and economic growth in the region.
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A business-friendly state like Texas already has strong trade ties to the EU, which purchased a combined $45 billion worth of Texan goods and services in 2012. TTIP offers Houstonians improved access to the European market, home to just over half a billion potential customers. Many businesses in the Houston region depend on the Port of Houston - the fourth-largest port in the United States - to import and export their goods. In fact, according to the Port of Houston Authority, more than $19 billion worth of Texas goods were exported to Europe through the Port of Houston alone. With TTIP seeking to ease trade restrictions between the EU and U.S., the Port of Houston will continue to be a key economic hub for the United States and the world at-large.
Impacts go beyond an increase in exports. Harris County alone could potentially add up to 19,000 jobs from more efficient and less expensive trade opportunities. On the global stage, TTIP allows the U.S. and UK to work together on international standards for high-quality goods and services. By harnessing the power of the world's biggest economy (the U.S.) and the world's biggest single market (the EU), we would set standards that others would want and need to adopt.
We need support and input from Houston business leaders to ensure an ambitious TTIP agreement adequately addresses the trade issues most important to local businesses and urge the wider Houston business community to contact their local congressional representatives and U.S. senators in support of a comprehensive TTIP agreement.
Bell is the Houston-based British Consul General. Murillo is president of the Houston Hispanic Chamber of Commerce
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