Editor's note

Increased trade is crucial for the EU-2020 strategy as well as for the member states’ plans in stimulating job creation. The most promising path in these plans’ implementation, at least for the EU-27, is multilateral global trade agreements. One among the most important in this sense is the EU-US negotiating process, which if formally known as Transatlantic Trade and Investment Partnership, or TTaIP.

Trade between the two most powerful blocks in the world- the EU and US- amounts presently to about € 650 bln, or about € 2 bln a day. What is important for business to know is that 2/3 of this trade occurs between companies; very often through investments. So, for example, the companies in the Baltic States can strive for attracting such investments.   

Actually, the pace of investments is growing on both sides of the Atlantic: already presently, the American investments in the EU are 3 times higher than in Asian states, whereas EU investments in the US is higher than in India and China, according to DIIS report in Copenhagen. 

As Financial Times acknowledged recently (22.03.2013), referring to the German Marshal Fund, the removal of trade barriers between the two blocks “might raise the GDP in the EU by € 190 bln and in the US by €100 bln”.

Food safety

Agricultural issues are becoming important (as well as difficult) in bilateral relations for several reasons: i.e. the sector is heavily subsidized both in the EU and the United States; technical issues dominate in transatlantic differences; the EU is unlikely to agree on the American biotech and GMP’s approaches, to name a few.  

On the other side, few US politicians would support the adoption of a numerous costly food quality regulations that have been introduced in Europe as a result of 30 years of public pressure. 

However, the common denominator is clear – the higher are the food safety standards the better for the consumers in both blocks. And private sector can easily clarify food market differences depending on the perception of consumers’ willingness to pay.  And in this market sector farmers in the Baltic States have a competitive advantage.

Something to worry about

The Baltic States “freewill” is restricted by the Euro Plus Pact which these states ratified in December 2011; though these restrictions are with good intentions. For example, the Pact envisaged that about 3 per cent of the 27 member states’ GDP should be invested in R&D, the backbone of innovation process. However, only Estonia has committed to the target with 3% of investments; Lithuania could manage 1,9% and Latvia only half –1,5%.

On one side, present budgetary constraints and crisis’ effects explain low investments; on another side, this is the prospective path for getting higher employment and creating more jobs and something should be done…    

The bottom line is: modern trade is becoming more and more international.  In essence, trade has transferred to the so-called “value added chain” where a numerous companies (usually in various countries around the world) take part in producing a final product.

Very often participating companies are chosen on labour quality, educational skills and stability; all these factors are present in the Baltic States. So, opportunities abound, there is a need for politically ambitious efforts.

After all, the EU-US free trade would enhance competition among companies; the future Partnership is going to be a background of a much large common market, e.g. of about 800 mln customers. It is here that the Baltic companies can have their share of profit.