With exports to the US expected to grow by 27%, Belgium stands to be one of the countries to gain the most from the Transatlantic Trade and Investment Partnership (TTIP), according to a new report by the World Trade Institute.
The new report TTIP and the EU Member States, commissioned by our sister organization AmCham EU and launched yesterday, concludes that TTIP could be a “game changer” for the transatlantic economy. TTIP will offer the greatest opportunities to countries which already share a strong economic relationship with the United States, as is the case of Belgium. The US is already the leading destination for Belgian goods and services exports, outside of the EU.
In addition to the expected 27% export growth (7th biggest improvement among the EU28), an ambitious and comprehensive TTIP agreement would also permanently increase Belgium’s GDP by 1.1% (3rd among EU28). Both low and high-skilled workers would benefit from an estimated 1% increase in wages (3rd among EU28), and consumers would benefit from a modest decrease in prices.
Export growth would be driven, in particular, by gains in the automotive, chemicals, pharmaceuticals, manufactures and machinery industries, which would also experience a corresponding increase in production and employment. TTIP will facilitate trade and investment by reducing or removing tariff and non-tariff barriers to trade – without lowering standards. Although not specifically mentioned in this report, EU Trade Commissioner Cecilia Malmström recently illustrated this point in a speech at the Flemish Parliament using the example of Belgium’s dredging and fashion industries. The US still imposes tariffs of up to 30% on some textiles, while the Jones Act prohibits many foreign companies from providing maritime services in the US. An ambitious TTIP agreement should help improve the conditions for both industries.
“TTIP is expected to have especially positive effects for SMEs,” write the report’s authors. At present, small and medium-sized enterprises are still confronted with significant barriers when trading across the Atlantic – in particular, non-tariff measures between the EU and US are disproportionately prohibitive for SMEs. TTIP presents an opportunity to more deeply integrate SMEs into transatlantic value chains and boost their competitiveness. SMEs, including many of the 4,700 Belgian companies which already export to the US, stand to gain perhaps even more than multinational corporations from a TTIP agreement.