Recent economic troubles on both sides of the Atlantic have underscored the need for renewed efforts to boost job creation and economic growth. The establishment of the U.S.-EU High Level Working Group on Jobs and Growth in late 2011 illustrated that political leaders in the U.S. and EU recognize that a step-change in the trans-Atlantic economic relationship will be essential for ensuring a sustained recovery.
As the High Level Working Group prepares to release its final report, ACC reiterates its support for a comprehensive U.S.-EU Free Trade Agreement (FTA). The potential impact of a U.S.-EU FTA would be significant: it would create jobs, boost innovation, improve industry competitiveness, and if done correctly, ensure long-term growth and prosperity.
There has never been a more opportune time to forge a strategic economic partnership across the Atlantic.
The U.S. and EU already have the world’s largest commercial relationship. Around 15 million jobs are directly linked to trans-Atlantic trade, but major opportunities for increased trade, growth and job creation remain. An ambitious and comprehensive trade agreement between the U.S. and EU that addresses regulatory as well as trade barriers would have a major positive impact on U.S. business, including the chemical manufacturing sector.
Trans-Atlantic trade in chemicals already benefits from low tariffs, but the elimination of remaining tariffs would still be significant. Two-way trans-Atlantic trade in total chemicals was worth $136 billion in 2012, with import duties on both sides of the Atlantic averaging about 3%. The elimination of remaining tariffs on chemical trade would generate considerable savings – around $1.5 billion each year, over half of which would be intra-company trade.
The potential cost savings from enhanced U.S.-EU regulatory cooperation are even greater.
For the chemical industry, most non-tariff barriers are driven by inefficiencies in the regulatory process. Responding to an invitation from governments on both sides of the Atlantic, ACC worked with Cefic, the European Chemical Industry Council, to develop comments on potential areas of regulatory cooperation on chemicals that might be explored in the context of a U.S.-EU FTA. Importantly, enhanced trans-Atlantic chemical regulatory cooperation has the potential to deliver cost savings for governments as well as industry. ACC and its European counterparts stand ready to work closely with U.S. and EU authorities on regulatory issues should leaders agree to launch negotiations.
Given the early position chemical manufacturing occupies in the value chain, the cost savings from the elimination or reduction of tariff and non-tariff barriers to trans-Atlantic trade in chemicals would be amplified for downstream sectors. As a founding member of the Business Coalition for Trans-Atlantic Trade, ACC will continue to work with other industry groups to advocate for a comprehensive, ambitious outcome from a U.S.-EU negotiation.
A U.S.-EU FTA has been talked about, in one form or other, for many years. It’s time to finally bite the apple.