Going International. German industry s experiences and perspectives in international business INTERNATIONAL AHK

Transcription

1 INTERNATIONAL AHK Going International German industry s experiences and perspectives in international business Results of the IHK-company survey Nationwide analysis

2 2 Going International Going International 2014/2015 German industry s experiences and perspectives in international business The DIHK s nationwide survey Going International 2014 was issued with the support of 80 chambers of industry and commerce. Altogether, 2,000 Germany-based companies with a presence abroad participated in the online survey in November The current survey continues the analysis of the same name from 2005 to Association of German Chambers of Industry and Commerce (Deutscher Industrie- und Handelskammertag, DIHK)

3 Going International TTIP of utmost importance Assessment of a trade agreement with the U.S. 3% 27% Positive Neutral Negative 70% Source: DIHK Foreign Trade Report 2014 Wanted: TTIP The largest economic area in the world According to the DIHK survey Foreign Trade Report (Außenwirtschaftsreport) from October 2014, the treaty has considerable backing from German industry. In light of existing non-tariff trade barriers, German companies would largely welcome TTIP s successful completion. It is therefore unsurprising that, according to the surveyed IHK experts, some 70 percent of the German Mittelstand with a presence abroad regard TTIP positively for their business. The transatlantic economic area is globally the largest market together, the EU and the United States account for half of global GDP, a third of global trade, and 60 percent of all foreign investment. Trade in goods and services between both blocs reaches some two billion euros everyday. The largest goal of the negotiations on a transatlantic free trade area (Transatlantic Trade and Investment Partnership TTIP) is precisely to facilitate bilateral trade. Since July 2013, the EU and the United States have been negotiating more than a simple elimination of tariffs

4 4 Going International a core issue in TTIP is, indeed, the easing of so-called non-tariff trade barriers. For Germany itself, the United States is, after France, the second most important export market: German exports to the United States reached in 2013 around 90 billion euros und correspondingly accounted for eight percent of all German exports. These numbers do not include trade in services. Trade in goods with the United States is directly and indirectly responsible for 600,000 jobs in Germany. High significance for German federal states German exports to the United States in 2013 came mainly from 3 federal states Bavaria (24 percent), Baden-Württemberg (23.8 percent) and North Rhine- Westphalia (13.4 percent). Proportionally speaking, trade with the United States is particularly important for Bremen (21.5 percent of all exports), Brandenburg (13.6 percent), Bavaria (11.3 percent), Hessen (10.9 percent), Baden-Württemberg (10.8 percent), and Saxony (9.1 percent). German motor vehicles, machines, and chemical products are especially popular among Americans. German federal states have specialized on specific areas of German-U.S. trade; correspondingly, the following products make up the main share of federal state exports to the United States (in percent): Automobiles and parts (45.2 in Baden-Württemberg, 42.6 in Bavaria, 21.7 in Berlin, 82.7 in Bremen, 38.6 in Lower Saxony, and 63.1 in the Saarland) Miscellaneous vehicles (66 in Hamburg) Machines (38 in Mecklenburg-Vorpommern, 25.6 in North Rhine- Westphalia, 30.4 in Schleswig-Holstein, and 27.3 in Thuringia) Metals and metal products (21 in Saxony-Anhalt) Pharmaceutical products (50.4 in Brandenburg, 39.8 in Hessen, 40.1 in Rhineland-Pfalz). German investment in the United States Recognition and adaptation of equivalent standards at the top of priority list The United States is also the number one destination for German investors since 1990, German investment in the United States has increased by almost 500 percent. According to data from the Bundesbank, German investment stocks reached some 266 billion euros and account for 22 percent of German foreign direct investment abroad. The adaptation or mutual recognition of equivalent norms, standards, and certifications features at the very top of the list of necessary steps for facilitating bilateral trade 85 percent of respondents view this as important or very important. With the sole exception of personnel-related services (72 percent), the number of proponents of immediate action in this regards stands at more than 80 percent in each industry sector for machine construction, this number even reaches 88 percent. Currently, companies are forced to carry out certifications twice, with high complexity and corresponding costs, despite equal safety requirements on both sides of

5 Going International the Atlantic. In addition, there are different rules for the approval of products and technical standards in the United States and in the EU. These rules force companies to maintain two different production lines for the same product. Simplification of customs clearance also crucial Simpler customs clearance comes in second among companies main goals. For 83 percent of respondents, this goal is important or very important; this number is even higher in specific industry branches for example, for retail and for the agrifood sector (91 and 90 percent, respectively). Companies report all sorts of difficulties, particularly in light of security measures in the United States. Some firms have, for instance, problems with the so-called known consignor status and with the X-ray scanning of products. As a result, companies hope that TTIP may bring about more simplified customs procedures that enable quicker transfer times for customs and export clearance. Tariff elimination of key importance Tariff elimination takes up the third spot of companies wishes for the TTIP agreement. In fact, 75 percent of them see progress in this direction as important or very important. Such progress would, however, be especially significant for the retail and the agri-food sectors (both 82 percent), as well as for the automobile industry and suppliers (81 percent). While tariff rates for imports into the United States are on average merely 2.8 percent, their elimination would unburden local companies by more than two billion euros given the enormous export volume. Individual products and product groups are, to be sure, still subject to higher tariff rates for instance, alcoholic drinks and tobacco (82 percent), milk products (10.9 percent), and apparel (10.8 percent).

6 6 Going International Mutual recognition of equivalent standards, norms, and certifications Relevance of individual issues Simplification of customs procedures Tariff elimination Development of uniform transatlantic standards More flexible visa solutions Investment protection Better market access in services sector Better access to public procurement 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percentage breakdown of responses "important" and "very important" Investment protection requested 55 percent of respondents view rules on investment protection as important or very important. Should TTIP contain such a chapter, this should be in the form of a modern text that tackles current deficits in the investment protection system and sets new standards that can serve as model for reform in existing treaties. A modern investment protection system in TTIP can offer the German Mittelstand a faster, unbureaucratic alternative to the costly, risky U.S. legal system, where the outcome of court proceedings may be more unpredictable and where the missing codification of the legal foundation can also lead to unforeseeable verdicts. More flexible visa solutions kept in focus The issue of more flexible visa solutions for company staff remains an important and very important wish for German firms (55 percent). Admittedly, it is little surprise that the personnel-related services sector is particularly in favor of reliefs in this area (94 percent). On this topic, it would make sense to ease the movement of persons through the expansion or creation of new visa categories. This would be helpful, for example, for the temporary, internal transfer of technicians for the installation of factories and machines, or for general staff training. Services not to fall under the The services sector, too, hopes for better market access (41 percent). This position

7 Going International table Access to public procurement should be strived for is especially supported by business and personnel-related service providers (78 and 72 percent, respectively). Simpler approvals are as important as comparable rules for online retail. In particular, the alignment of heavily regulated sectors, such as insurance and financial products, could considerably facilitate trade. 34 percent of surveyed German companies regard better access to public procurement as important and very important. This would primarily be a priority for personnel-related services and business service providers (55 and 47 percent, respectively). Correspondingly, German firms wish that public tenders become more open and accessible to foreign bidders at each level of American administration. Timely announcements and reasonably long time periods would make it possible for small companies to better plan for submitting their offers.

8 8 Going International Copyright All rights reserved by the publisher. The reproduction of this document, in full or in part, is permitted only with the express approval of the publisher. Publisher DIHK Deutscher Industrie und Handelskammertag e. V. Postal address: Berlin Address: Breite Straße Berlin-Mitte Telephone (+4930) Telefax (+4930) Internet: Facebook: Twitter: ISSN-Number Editorial Team X International Economic Policy and Law Department Dr. Volker Treier, Heiko Schwiderowski Layout Friedemann Encke, Stefanie Scheibe Stand December 2014