Why do Danish businesses support Free Trade Agreements between the EU and the US?

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Why do Danish businesses support Free Trade Agreements between the EU and the US?

  • Dansk Industri, export, free trade, FTAs, import, Lone Knudsen, Ministry of Foreign Affairs, Peter Bay Kirkegaard, TTIP

According to Peter Bay Kirkegaard, Senior Advisor, International Market Policy at DI (Dansk Industri), as a small, open economy, Danish companies depend on open and accessible markets across the globe. Free Trade agreements are important.


In our November 2015 seminar held jointly with Danish-Chinese Business Forum, Peter outlined how Danish companies can benefit from free trade agreements (FTAs), and what types of liberalizations they should be seeking in future agreements.

We also heard from Lone Knudsen, Chief Consultant, Trade Policy and Analysis, Denmark’s Ministry of Foreign Affairs, about the status of the most interesting FTAs, including TTIP, EU-Japan, TPP and EU-CN Invest.  She pointed out that Danish exports to the US should rise by 14% with the TTIP and bring about increased household income.

Here are a few key slides from their presentations, with the rest located on the Past Events webpage here.

Danish exports rely on imports DI, Free Trade

 

Main sources of imports to Denmark

Main sources of imports to Denmark, Free Trade

Main Danish export destinations. The US is #3 behind Germany and Sweden, with 9% of exports.

Main Danish export destinations DI, Free Trade

Among other things, Lone covered the status of TTIP as of Nov. 2015:

TTIP Negotiations:

Aim: Liberalise as much as possible trade and investment
between the two blocs. EU and US are the two largest
economies in the world and have the largest bilateral trade
relationship.

  • Potential benefits (EU perspective):
    • CEPR study: increase EU exports to US by 28 %. Extra 545
      euros (614 dollars) in disposable income for a family of four
      in the EU.
    • CPH Economics: increase DK exports to US by 14 %.
    • Set global standards for trade
    • Strengthen transatlantic cooperation

What are the EU and US negotiating?

3 main areas:

  1. Market Access
    • Reduction of tariffs on goods
    • Services
  2. Public procurement
    • Regulatory cooperation
    • Technical barriers to trade
    • Design and application of rules
    • 9 specific industries, e.g. pharmaceuticals, vehicles and chemicals
  3. Rules
    • E.g. on energy, sustainable development, SMEs and investment protection

Typical arguments in the public debate:

  • TTIP will weaken environmental standards
    • It is stated in the EU negotiating mandate that trade shall not be at the
      expense of the environment. The EU will still uphold the precautionary
      principle and set its own standards.
  • TTIP will force governments to privatize public services.
    • Governments will still decide themselves what should be a public
      service. If they change their mind, they can still change it back
  • TTIP will allow powerful companies to sue governments over legislation they
    don’t like

    • ISDS is a dispute settlement system. It will not interfere with government’s right to regulate

In summary, our speakers agree that:

  • Denmark is a small, open economy.
  • Diverse industry, which often combines exports of goods and services.
  • Easy inward and outward market access is extremely important.
  • Trade restrictive measures are harmful to Danish companies – especially SMEs.
  • Industry needs comprehensive trade liberalization that deals with both tariff and non-tariff measures.

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