VDMA: The mechanical engineering industry requires a comprehensive TTIP agreement

The TTIP free trade agreement must also take account of the interests of the mechanical engineering sector as Germany’s biggest export industry. At the start of the Hannover Messe trade fair on 25 April, VDMA presented a ‘red lines’ paper setting out the industry’s expectations and minimum requirements in relation to free trade with the USA.

The TTIP free trade agreement must also take account of the interests of the mechanical engineering sector as Germany’s biggest export industry. At the start of the Hannover Messe on 25 April, VDMA presented a ‘red lines’ paper setting out the industry’s expectations and minimum requirements in relation to free trade with the USA. VDMA takes a critical view of a possible thinned-out agreement, referred to as ‘TTIP light’.

“The mechanical engineering sector is a key industry for Europe and faces special challenges. Companies could save unnecessary costs of between 5 and 18% by eliminating tariffs but above all by dismantling technical trade barriers. We expect the European Commission to fight for the interests of the European economy in the negotiations with the Americans,” indicated Ulrich Ackermann, head of VDMA’s Foreign Trade Department. “It is impossible to explain why companies in the mechanical engineering sector should not fully benefit from TTIP.”

The USA was the German mechanical engineering sector’s largest export market last year ahead of China and France. Besides tariffs, it is primarily technical trade barriers that are hampering trade with the USA. VDMA’s expectations of the TTIP free trade agreement include the following:

  • The complete removal of all tariffs in the mechanical engineering sector. Tariffs in this industry currently stand at between 2.0 and 4.5% for export to the USA.
  • The harmonisation of technical requirements concerning machinery via international standards systems as far as possible (ISO/IEC).
  • Facilitated access to the US market through uniform product tests based on the VDMA principle of ‘one standard, one test accepted everywhere’.

At the same time, VDMA warns that a thinned-down TTIP may not enable potential in the mechanical engineering industry to be harnessed to the fullest or could even have negative consequences. The following red lines, amongst others, should not be crossed in the agreement:

  • The TTIP should not exclude any mechanical engineering products from tariff dismantling. Transitional periods for tariff dismantling may only be provided for in well-justified, exceptional cases.
  • TTIP must not weaken the EU single market. Harmonised and, above all, consistent standards must continue to apply within Europe.
  • Certification by third parties must not increase. The European system of the declaration of conformity with the relevant legal provisions must be maintained by the manufacturers.

The mechanical engineering industry’s expectations of the agreement with the USA were also one of the main themes at the European policy reception held by VDMA and Deutsche Messe on 25 April entitled: “TTIP: what is in it for the mechanical engineering sector?”. At the event, VDMA’s President Dr Reinhold Festge presented the “red lines” paper to the guests European Trade Commissioner Cecilia Malmström, the US Trade Representative Michael Froman and the Chairman of the European Parliament’s Committee on International Trade Bernd Lange.

VDMA’s “red lines” paper on the TTIP can be found at this link.

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