Following a number of discussions over the past year between the two largest global trading powers, the United States and the 27-nation European Union, the issue of non-tariff barriers continues to be a central area of discussion in the effort to increase trade and economic growth in the worldwide logistics industry.
The United States and European Union together account for nearly half of the world’s gross domestic product, or more than 40 percent of total world trade. While the reduction of customs duties has been a common focus, one of the largest stumbling blocks between these two trading “superpowers” has continued to be the non-tariff trade barriers put in place to protect domestic industry segments and support individual nations’ trade policies. Related factors, such as different opinions on and regulations around environmental concerns, food additives, and what is often referred to as the “cultural exception,” (seen, for example, in France’s requirement that a certain percentage of imported media be in French, excluding additional imports of products from other nations) are also on the table. These key topics were recently discussed in the 7th round of negotiations by the U.S. and EU’s TTIP Advisory Group which took place in Washington from Sept. 29-Oct. 3.
If successful, the elimination of customs duties and reduction of non-tariff barriers would bring irrefutable benefits to both parties on either “side of the pond,” potentially resulting in the creation of nearly 2 million jobs with a projected GDP increase for EU members of 0.4 percent and the United States of 1 percent. According to experts, even if only half of the current non-tariff barriers are done away with, both the United States’ and European Union’s GDPs will increase by 3 percent. Additionally, these efforts would bring with them continued growth across the global logistics industry by increasing the number of shipments flowing across the Atlantic, by both air and sea, and the number of customs entries filed as a result.
The most recent round of discussions on these issues, which have taken place regularly since the advisory group’s launch in January 2014, have centered largely around regulatory coherence, sectors, investment protection and ISDS, and sustainable development. This latest round also saw forward progress at a deliberate pace. Continued action is expected through the end of the year, most notably around non-tariff barriers. Negotiators are still trying to complete the agreement by the end of 2014.
Ann Bruno
Chief Operating Officer,
ICAT Logistics,
Elkridge, Md.
This article was published in the January 2015 issue of American Shipper.
