In 2013, we embarked on a national road show to explore how businesspeople and their companies, particularly those that fall within the definition of a small and medium-sized enterprise (SME), can benefit from a EU-US trade and investment agreement. Over the past 18 months, 580 participants from more than 300 companies and organisations joined us at 15 events in 12 different cities, from Bristol to Newcastle, from Glasgow to Birmingham, across the country.
We think it is time to share the wealth of knowledge we have obtained about the daily realities, best practices and barriers to trade between the UK and the US. There are a lot of success stories out there. But there could be more. SMEs especially have much to gain from TTIP as it will address many of the barriers they face, and their experiences make a case for why business and local economies stand to benefit from a trade agreement.
This report tells their stories in a special selection of 16 case studies, representing a range of sectors. The stories provide us with a unique and tangible insight into what the UK-US economic relationship means to the companies, what barriers they face when trading with the US, and the potential benefit they see in a trade agreement between the EU and the US. Our case studies range from very small companies with less than four employees to companies with 200 or little more. We focus on trade barriers that fall into the scope of TTIP. But we also want to show examples of barriers that go beyond the reach of a potential agreement to emphasise the importance of working towards a transatlantic marketplace.
SMEs are the backbone of the UK economy, constituting 99 percent of all private sector businesses(1). Almost 15 million people work for SMEs across the country(2). With a growth rate of 14 percent since 2008(3), SMEs are a driver of innovation and economic growth.
An important part of the success of many UK SMEs comes from their capacity to export their services and products. Around 25 percent of UK SMEs currently export, demonstrating that there is a high demand for British products and services around the world(4).
The US is the top export destination for UK SMEs. 55 percent of all exporting UK SMEs are doing business with the US(5). Many jobs are directly related to UK-US SME exports. SMEs help to make the UK-US economic relationship one of the largest and most important in the world.
More importantly, trade between UK SMEs and the US could be bigger. The case studies in the following pages will demonstrate how barriers to trade between the EU and the US, such as tariffs or different standards and regulations, can make it difficult for companies to expand their businesses across the Atlantic. Additional costs caused by these barriers are burdensome for even the largest companies, but they can be critical to a smaller company’s decision to export or not.
(1) Small Business Statistics, FSB, 2014
(2) Businesses Population Estimates for the UK and Regions, BIS, 2013
(3) BIS Analysis Paper Number 2: SMEs: The Key Enablers of Business Success and the Economic Rationale for Government Intervention, BIS, 2013
(4) FSB Voice of Small Business Index, Quarter 4, 2014
(5) US Tops Export Destination List for UK, Barclays Business, 2014