By EU Commissioner Elżbieta Bieńkowska Internal Market, Industry, Entrepreneurship and SMEs at the Atlantic Council, Washington DC
Ladies and Gentlemen, it is a pleasure to be here. The Atlantic Council has a proud history in promoting engagement and cooperation between our two continents. And you continue to do important work, reminding both sides of our strong links to each other and exploring new ways of moving forward. Thank you.
What I want to talk to you about today is how the EU and US can work better together to promote jobs and growth. This is what our citizens expect from us. I will begin by talking about the economic agenda of the European Commission, and why EU-US cooperation is so important. I will then say a few words on the planned Transatlantic Trade and Investment Partnership or TTIP. And I will finish by focussing on the role of our small and medium-sized firms in the transatlantic economy. In doing so, I welcome the report that you produced last year on the benefits of TTIP for small business*.
Why we need transatlantic economic partnership
Ladies and gentlemen, to listen to some of the news media here in the US, you could imagine that much of Europe was an economic wasteland. Well, let me put the record straight. Europe is alive and well and we have turned the corner.
Let me recall a few figures:
Real GDP in 2015 is expected to rise by 1.8 % in the EU, showing an improvement over the last five years. When the world’s largest economy grows by as much, this is good news to everyone.
After the shock of the financial crisis, European exports have had a remarkable performance with solid and consistent growth: during 2010 – 2014, exports were 28% higher than during the 5 years before the crisis. But most importantly, internal demand is now also recovering. Private consumption has accelerated and is expected to be the main contributor to GDP growth this year. Investment is expected to finally rebound in 2016. So Europe is not doing as badly as you might think. But it is not doing as well as we want it to be.
Unemployment is far too high in too many of our Member States, in particular our young generation. Long-term investment is far too low. Investments are twenty per cent below the level of before the crisis. In terms of productivity, the gap with the US is widening and the rest of the world is catching up. And we are not investing enough in new technologies.
We recognise all this. This is why the European Commission has put investment, jobs and growth as its top priority. And we are acting.
We have launched an ambitious European Fund for Strategic Investments. We have proposed an Energy Union package. [In a few weeks’ time,] we are setting out proposals for a Capital Markets Union. In May, we put forward a strategy to move Europe to a Digital Single Market. I know that there are some concerns.
Let me reassure you. We can and will build an integrated digital market without closing the door to our commercial partners.
Allow me to develop on this point. Very soon –probably already next week – the Commission will launch a public consultation on platforms such as film and music offers, e-commerce and search engines. Platforms should be instruments of opportunity, as my colleague Andrus Ansip recently said. We want to look into issues of transparency, access, openness and illegal content. We are very open-minded and I encourage US companies to contribute.
We expect that all companies that do business in the European Single Market – being European or not – play by the rules, be it data protection, public procurement or antitrust. But this is not about building up barriers. On the contrary, we want to encourage all companies – including companies in the US – to develop, invest and make the most out of a market of 500 million potential customers. And uniform rules – rather than a patchwork of 28 different regimes for our 28 member States – are a market opener. This will also be the approach that we will adopt next month when we release a strategy for the future of our European Single Market. It will be about creating opportunities for our consumers, professionals and job creators. It will be about encouraging modernisation and innovation. It will be about ensuring practical delivery.
And it will be a Single Market that is open to the world.
But it is not enough to dismantle barriers within Europe. If we want to create jobs and boost growth, we must work together with our commercial partners to dismantle barriers globally. Our consumers want access to the best products and services wherever they are located. Our firms need to be part of global value chains, not just European ones. By the way, that is true of American firms too. I know that President Obama and Secretary Pritzker recognise that. And I know that this is a cause that the Atlantic Council has championed. So we need to work better together.
Our aims for TTIP
A key part of that is TTIP. All the studies show that, if we do it right, the benefits will be large for the European and American economies. An ambitious and comprehensive TTIP would increase trade and bring significant economic benefits to both sides. Overall, the extra bilateral trade between us – together with our increased trade with other partners – would mean a rise in total EU exports of 6% and 8% in US exports.
So we want a TTIP deal that opens markets for goods, services and public procurement on both sides of the Atlantic. A deal that delivers significant results on non-tariff barriers for key sectors. And a deal that sets mutually beneficial rules on issues such as energy and raw materials, competition, and sustainable development.
This would be good for consumers and good for our job creators. If we are to do this right, we must greatly improve our regulatory cooperation.
We need to get rid of pointless regulatory duplication. Rules should work for the consumer, not the bureaucrat or the customs official. That is an approach that I am pushing in Europe and it is one that should apply in TTIP. So we can and must simplify cumbersome procedures for trade or certifications, reduce unnecessary duplications.
And we can and must do all this without weakening consumer protection, undermining health protection, social protection or environmental protection. Our consumers want the same freedoms and the same protections whether they live on the North Pacific coast or the shores of the Black Sea. And they all end up paying the price when we have excessive regulation. If we do this right, TTIP offers us an opportunity to set a high global benchmark for consumer, health, social and environmental provisions and to project together our values globally.
SMEs at the heart of the transatlantic investment agenda
Ladies and gentlemen, SMEs must be at the heart of TTIP.
Your report is absolutely right when you talk about the importance of SMEs to our two economies. In Europe alone, we have around 21 million SMEs representing over 99% of all businesses. They contribute tremendously to growth and jobs. They provide 57% of the EU’s GDP and 67% of private sector jobs. In the last 5 years, 85% of new jobs in the EU were created by SMEs, leading to an average of 4.1 million new jobs every year. And the statistics are similar for the US. And they play a major role in exports by both sides. SMEs account for 28% of the total value of EU exports to the US. 88% of the EU firms that exported to the US in 2012 were SMEs.
But it is not just about the numbers. It is about what they do and what they bring to our economies. They innovate. They find new solutions and use new business models. Above all, they are more ready to take risks. And on both sides of the Atlantic, they are looking to TTIP to create new opportunities.
Let me give you two examples.
Aphesa is a Belgian company working on the design and production of industrial cameras. Many of their cameras are helping here in the US to inspect oil wells damaged by debris, being put back into service, or fracturing wells that need to be inspected.
Just up the road from here, in Frederick, BioElectronics Corporation makes medical devices that reduce pain and speed healing for consumers.
These two firms are not just creating jobs: they are delivering social and economic value for the communities that they sell their products to. A good overall TTIP deal will benefit companies like these.
But what more can we do for them?
The most frequent challenge SMEs raise is regulatory compliance. Since they have less means than large companies to comply with different set of regulations, removing duplication will be a major part of resolving that.
But we also need to improve SMEs’ access to practical market access information and make sure that companies are aware of solutions. Through the SME Chapter, we have proposed a commitment on both sides to provide companies with useful information through a website portal.
This is a relatively modest but pragmatic objective that would only need a very small administrative investment. But it would be a real added value for businesses. In my talks this week, I will encourage my counterparts to accept it.
We should also look at the administrative burden of customs procedures. And we can look at removing the existing legal limits on the ability of companies’ staff to travel. I am referring to the unnecessarily complex visa procedures which make it difficult for companies (especially small ones) to send their staff on business trips (training, transfer of knowledge, technical assistance) at short notice.
But beyond that, we must increase our regulatory cooperation on SME issues. Since 2011, we have had a strong SME dialogue with the US Administration and most notably our partners in the Department of Commerce, USTR and the Small Business Administration. We hold regular discussions on SME issues in EU-US SME Workshops. And business associations on both sides take part actively. We have discussed a number of topics, including the reduction of trade barriers impacting SMEs, standardisation, access to finance, and IPR. And we have been working to deepen our relations with the Department of Commerce.
In 2012, we signed a Cooperation Arrangement on SME policy cooperation. And this year, we have signed one on cluster policy. Both agreements are aimed at facilitating contacts between EU and US businesses, paying particular attention to SMEs. And the 2012 agreement led to closer cooperation between the Enterprise Europe Network and the International Trade Administration. This led to a number of joint matchmaking events at trade fairs. We should build on this, learning from each other’s rich experiences.
Ladies and gentlemen, let me end on a personal note.
Growing up in Poland in the 1970s and 80s, I looked to America as a beacon of freedom. It was not just political freedom: it was economic freedom as well. The freedom of the consumer to choose. The freedom of the professional to look for the right job. The freedom of the small business to operate. And that freedom when it came was wonderful. And it explains why many of the strongest supporters of the EU’s Single Market are from my part of Europe. When I look at our wider transatlantic relationship, I see it in terms of the same freedoms. That is why this week in Washington, I am pushing so hard for a good deal.
A good deal for our consumers and a good deal for our businesses, both small and large. This is what our citizens expect from us.
*This was a survey supported by the EACCNY