Monday 28th April 2014
A year is a long time in transatlantic trade.
This time last year, I was embarking on my UPS « on-boarding » program, a period of training new “UPSers” undergo in order to better understand all parts of the business. In addition to delivering packages in London from one of our infamous brown trucks, this also involved spending time on the road with a UPS Account Executive. We diligently knocked on doors in W1 to meet with customers from small companies who had delegated the logistics of their fast-growing supply chains to UPS, to find out firsthand about the evolving needs of their business and how we could help.
Meanwhile, in that same timeframe last year transatlantic policy-makers and stakeholders were digesting the contents of the final report of the U.S.-EU High Level Working Group on Jobs and Growth, a committee tasked with preparing recommendations for transatlantic trade negotiators. Two months later in the margins of a G8 summit in Lough Erne, Presidents Obama, Barosso, Van Rompuy and Prime Minister Cameron announced the launch of negotiations for a Transatlantic Trade and Investment Partnership (TTIP). Ten months on, U.S. and EU negotiators have four negotiation rounds under their belts, and a host of policy areas ranging from healthcare to customs modernization carefully placed on the proverbial negotiating table.
How is my UPS training relevant to the progression of the TTIP? Two memorable customers with whom I interacted while shadowing our Account Executive taught me how the TTIP can have a concrete impact on the opportunities available for small businesses to grow.
Amidst the “big brand” streets of New Bond, Regent, Oxford and Jermyn are hundreds of small businesses; family-owned, young entrepreneurial start-ups, those selling quirky specialty products, and those vying to compete with bigger neighbors. Our first stop during my training was one of the latter, a small store selling high-quality men’s shirts and ties as well as tailoring services. This company competes with century-old brands in central London for customer footfall -no easy feat when tucked away on a side-street between the sprawling multi-floored showrooms of their competitors.
When speaking to the owner, I learnt that despite a gentle decline in in-store sales, and a low advertising budget, business had never been better. Online sales, accompanied with the delivery and returns services we provided had resulted in a large portion of repeat customers, including tourists and even expats who stuck with the company despite geographical distance. Our responsibility as their chosen carrier is to ensure consistent and reliable delivery services to complement the high quality product they sell, and our ability to navigate international customs processes plays an important role in retaining long-term customers across the Europe. An increase in the threshold under which customs duties are not applied (the “de minimis”), as part of the TTIP, would exempt most shirts and ties from this extra cost and paperwork, and could help further expand such businesses across the Atlantic.
Later that day we met with a young entrepreneur who had founded and now manages a specialty fabric company, selling beautiful fabrics to individuals by the meter squared and to wholesale customers by the roll. When asked about their intention to expand their business internationally, they told us that although that may be a long-term goal, it wasn’t an immediate priority, in large part due to their inexperience in foreign markets, and lack of knowledge of the export process itself. TTIP discussions which simplify customs processes, and enable traders to deal with only one customs authority or a “Single Window” at EU and U.S. borders for customs clearance, would encourage many of those who currently stick to domestic trade to consider “going transatlantic” and expanding their business horizons.
The lesson I took away from meeting with our customers is that if TTIP is to matter at all, it must deliver tangible benefits which truly make it easier to sell products or services from one side of the Atlantic to the other.
If we want our small businesses to compete and survive, trade negotiators must shine a light on the sometimes wobbly road ahead. The TTIP can do so by raising customs duty exemption thresholds for low-value goods, reducing the number of authorities traders must deal with via centralised customs clearance, and by broadening the scope of trusted trader programs so that smaller businesses may benefit too.