NCPA - National Center for Policy Analysis

Removal of Non-Tariff Barriers Will Benefit U.S. Small Businesses

July 17, 2015

With Trade Promotion Authority (TPA) signed into law June 29, 2015, the Obama administration now has the authority it needs to complete high profile trade agreements such as the Trans-Pacific Partnership (TPP) that is among 12 Pacific Rim countries, and the less controversial Transatlantic Trade and Investment Partnership (TTIP) with all 28 European Union countries.

The TTIP will strengthen an already substantial trade relationship with Europe, says research associate Gene Lattus of the National Center for Policy Analysis.

  • In 2013, Europe accounted for 16.2 percent of all U.S. exports and 17.1 percent of all U.S. imports. 
  • In 2011, small businesses exported $76 billion worth of goods to the European Union, representing nearly 17.5 percent of all U.S. exports to those countries. 
  • An estimated 32 percent of U.S. small businesses export some good or service to Europe.

Only a few U.S. industries face significant E.U. tariffs; thus, the removal of tariffs, by itself, would have little effect. With projected annual gross domestic product (GDP) growth of €119.2 billion (Euros) in Europe and €94.9 billion in America under the agreement, removal of nontariff barriers are most beneficial to small businesses and the overall economy: 

  • The most comprehensive version of the transatlantic agreement has the ambitious objective of removing 25 percent of costs linked to nontariff barriers.
  • With TIPP, U.S. GDP is projected to grow an additional 0.39 percent annually through at least 2027. 
  • The reduction in nontariff barriers would account for three quarters of this growth.

Costly barriers such as standards and regulations, intellectual property protection, logistics and financing will be harmonized with U.S. standards, increasing small business access to the European market, allowing small businesses to export more effectively.


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