Last week, the 12th round of negotiations on a Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union is taking place in Brussels.
The importance of TTIP cannot be overstated. An agreement would be of great geostrategic and geo-economic value in terms of strengthening Transatlantic ties and enhancing our ability to define a global rules-based architecture. This is crucial in order to promote economic growth, liberalism and democracy globally.
TTIP is a great opportunity for the U.S. and EU to create growth and jobs as well as further investments across the Atlantic. The ambition is an agreement unprecedented in scope and depth. Even though tariffs on Transatlantic trade are already fairly modest compared to many other regions, there are still considerable gains to be made by a further reduction or complete elimination. Even bigger gains can be made from closer regulatory cooperation, easing costly and cumbersome regulatory burdens for U.S. and European export companies. This is where TTIP goes beyond other existing free trade agreements and has the most to offer.
Denmark is among the strongest TTIP supporters in the European Union. In fact, labor unions and employer organisations as well as a large majority of the population are united in the support for TTIP. While we support the aim of reaching an agreement this year, it is equally important that we uphold our high level of ambition as to the content. Trade deals are not easy. But we have a great point of departure with the already strong economic ties between our economies and the fact that our respective consumer and environmental standards are at comparably high levels. TTIP is not about harmonizing at the lowest common denominator, but rather aligning regulatory processes where it makes sense to the benefits of businesses and consumers alike. It is important to stress that this can – and must be achieved - without sacrificing each other’s right to regulate and set standards nationally as high as wanted the same way we do today.
We are a small country, but as a result of the size of the Danish economy our private sector is geared towards markets abroad, not least the U.S. The U.S., in fact, is our largest trading partner outside the EU. Last year, Danish exports to the U.S. were valued at more than $14 billion. Danish investments in the U.S. are also on the rise. At the end of 2014, Danish foreign direct investments in the U.S. totalled $12.5 billion. In addition, a recent study by the Confederation of Danish Industry and the Danish Trade Council in the U.S. shows that the number of Danish companies with U.S. subsidiaries has increased by 35 percent since 2013. Danish companies and their U.S. subsidiaries employ more than 60,000 people in the United States.
American-owned companies also have a strong presence in Denmark with more than 500 subsidiaries, supporting close to 39,000 jobs*. U.S. foreign direct investment in Denmark is valued at over $14 billion and last year total U.S. exports to Denmark amounted to $7.8 billion.
The future economic potential between our two countries is promising. In a number of sectors, including environmental technologies, renewable energy, healthcare and life sciences, food and agriculture, shipping as well as defence, Danish companies have the experience, advanced products and solutions that are in high demand in the U.S.
One example is the Danish experience of ensuring that economic growth and green energy policies go hand in hand. Denmark is a world leader in wind energy and Danish companies have played a leading role in Denmark’s transition towards an economically efficient low-carbon energy mix. The U.S. has vast potential for developing off shore wind energy in the Northeast and elsewhere and Danish companies are ready to provide the solutions.
Another example is the Danish healthcare and life sciences sector. In 2015, pharmaceuticals alone accounted for 25 percent of all Danish exports to the U.S. Our companies are global market leaders in the treatment of such diverse diseases as diabetes, depression, Alzheimer’s, skin disorder and allergies. With demographic trends and ageing populations, demand for these treatments will rise and Danish companies are ready to provide. The list goes on.
Our goal—and hope—is to unlock this market potential, thereby helping the American people and businesses benefit from Danish exports and investments and vice versa.
Open markets and increased trade are conducive to promoting democracy and liberal values and to ensure growth and prosperity. TTIP provides a great opportunity for the US and Europe to strengthen our partnership on this agenda.
Lose is Denmark’s ambassador to the United States. Dybvad is president and CEO of the Confederation of Danish Industry.