AmCham Macedonia Summer 2013 (issue 38) - Page 12

ANALYSIS The architects of the T-TIP estimate that it could increase global income by almost €100 billion, due to its enormous direct and indirect impact on the global trading system. This would occur as EU-US trading partners the world over align with T-TIP standards, cutting complexity and cost all along the supply chain. In other words, the standards set by the T-TIP negotiations are likely to be global standards for many years to come. Understanding this is critical for any economy wishing to increase exports, foreign direct investment and maintain the competitiveness of local firms. Businesspeople on both sides of the Atlantic hope that the TTIP will go well beyond any trade agreement ever negotiated by either side and focus on reducing non-tariff barriers such as those posed by regulatory inconsistencies. Gunilla Almgren, President of European Association of Craft, Small and Medium-Sized Enterprises, recently explained that: “The European Union has a unique opportunity to boost economic growth by launching negotiations on a trade agreement with the United States... Done properly, the T-TIP will give European firms – especially small and medium sized enterprises – much greater access to a huge market, by reducing or even eliminating market access barriers and tariffs.” After all, navigating diverse and complex regulatory environments puts big business at an advantage over small ones. Big companies can afford the legal counsel and high cost of localizing products and services for different markets; small to medium companies cannot. sector regulations [the T-TIP] could become the template by which the US and Europe negotiate with various emerging market economies, China included.” Thus, the T-TIP has a lot to do with balancing the impacts of global economic trends that are sure to favor Asian economies down the road. Short Term Impacts on Macedonia as a non-EU Member While Macedonia should keep its EU integration process a top priority, the T-TIP is likely to have positive impacts on the country even as a non-member for at least two reasons, including: A strong EU economy is good for Macedonia. Macedonia’s location in Europe logically ties it more closely to the EU as a trading partner than to the United States. Despite it not being a member, the country’s main trading partners are all EU members; in 2011 28% of its exports went to Germany 7.2% to Italy, 5.4% to Bulgaria and 4.9% to Greece 4.9%. If these economies again begin to grow, Macedonia will likely increase its exports over time. And strengthening the EU economy is one of the main objectives of negotiating the T-TIP from the EU perspective. Karel De Gucht, European Commissioner for Trade, has called the T-TIP “the cheapest stimulus package you can imagine,” since mutual trade and investment will increase as these economies align, leading to the job creation needed to reverse current economic trends in these advanced economies. More U.S. investment in the EU is likely to increase U.S. investment in Macedonia. Virtually without exception, the U.S.-based companies that have invested in Macedonia have done so as part of their investment in an EU country or to target the EU marketplace. A good example is Wabtec Corporation, a leading producer of high-tech equipment for locomotives, freight wagons and passenger railway vehicles based in Pittsburgh, Pennsylvania. In 2008, Wabtec acquired an Italian company, POLI Group, which included a significant production facility in Macedonia. Wabtec’s continued investment in Macedonia (Wabtec MZT) has translated to a growing organization that exports 99% of its products to more than 50 countries. “The European Union has a unique opportunity to boost economic growth by launching negotiations on a trade agreement with the United States...” Aside from the obvious economic impacts of the T-TIP, many players on both continents promote the agreement from a geopolitical standpoint. Joseph Quinlan, author of The Case for Investing Europe 2013: Why U.S. firms should stay the course1 points out that the deal “would also strengthen the U.S.-EU economic axis relative to the developing nations and key emerging powers like China.” He goes onto say that “whatever the common standards and the harmonization and standardization of industry/ 1 ISBN 2-914685-64-5. New York: 2103. Continued on page 30 Emerging Macedonia Summer 2013 Issue 38 12