‘Clear statements and above all transparency are important’
Interview with Dr Tarik Vardag, Managing Director of the KROENERT group. The Hamburg-based mechanical engineering SME specialises in machinery for coating web-formed materials such as paper, film, foil and cardboard.
What in your view is the greatest benefit of TTIP?
Dr Tarik Vardag: For the mechanical engineering industry, the dismantling of trade barriers will be the greatest benefit. The harmonisation of standards will also greatly relieve the strain on us. The simplification of customs procedures and investment protection are benefits of TTIP. The simplifications will mean that we will be able to process orders from the US more efficiently.
What long-term consequences would a free trade agreement with the US have?
Dr Vardag: The abolition of trade barriers will strengthen trade between Europe and the US. As a result, a counterweight to the major emerging developing countries, especially in Asia, will be created. As an export nation, Germany of all countries has benefited greatly from the European Single Market. An agreement with the US would similarly strengthen our national economy.
The powerful economic regions of the world at the moment are Europe, with Germany to the fore, and the US, which is right now experiencing a revival of the manufacturing industry. Asia, with China taking the leadership role and an up-and-coming India, is getting stronger and stronger. Today, the European-American region accounts for about two thirds of global economic performance, but this proportion can easily change. For the Asian market is growing quickly, also because major new markets are constantly emerging, such as Indonesia for example.
Germany benefits most from free trade, but at the same time the biggest critics can be found here. How can the critics be silenced?
Dr Vardag: Clear statements and above all transparency are important. It is necessary to make clear to everyone what this agreement means and especially what benefits arise from the abolition of trade barriers. The free trade area creates growth, which in turn creates jobs. If discussions are transparent, it will swiftly become clear that the arguments in favour of TTIP clearly prevail.
Shouldn’t the politicians have to argue more clearly in favour of the agreement in public?
Dr Vardag: Definitely. But it is also especially important that critical issues are also addressed and not swept under the carpet. That includes the issue of the arbitration courts, for example. If critical points are not discussed transparently, credibility is then lost. Negotiations essentially always mean a balancing act. In this kind of an agreement, it’s nothing to do with one side absolutely wanting to enforce its standards. It’s to do with finding out together what is sensible for everyone in the individual case. The politicians have to say all this to the public.
There is of course also the option of removing critical issues from the negotiations.
Dr Vardag: That is basically possible and should be considered if an agreement can't be reached on controversial questions. But that should remain the exception. It simply won’t add up to much if TTIP doesn’t regulate important matters. A free trade agreement that leaves out the harmonisation of standards, for example, would not prove to be useful.
What would be the medium and long-term consequences if TTIP didn’t materialise?
Dr Vardag: That would not have any consequences for KROENERT in the short term. In the medium and long term, we will just not be able to strengthen the competitive position we enjoy over others, in Asia for example. And of course we would not get the growth in an enlarged single market that we were recently able to realise in the European Single Market. We are simply depriving ourselves of the opportunity for growth.
Wouldn't we also start to fall behind others as a result?
Dr Vardag: The mechanical engineering industry has long stood at the heart of globalisation. We have up to now been able to assert ourselves very well here with our high-technology products. I don’t want to paint a bleak picture and say that this position would be at risk. We will still be able to assert ourselves, but we will not get the additional growth arising from this free trade agreement.
KROENERT already fulfils the standards and regulations for the US market. Don’t you fear that new standards will again be defined as part of TTIP that you will have to comply with?
Dr Vardag: It is quite normal for standards to be constantly revised. If that were to happen on a harmonised basis in the future, then that would be far more efficient and make things significantly easier for us.
What is the most important argument that you as a representative of a traditional, yet innovative SME that is focused on sustainability can put forward for TTIP?
Dr Vardag: One value in a classic SME is job security. This value is one of the most important. A free trade agreement such as this one with the US would support the objective of securing jobs. A second value that ensures the survival of us SMEs is investment protection. As an SME, we cannot afford to squander an investment.
A third point is innovation. We are already good in this field. But with a free trade agreement, we could also benefit from the very good climate for innovation in the US. Here at home, our innovations are focused more on products and equipment, but in the US in contrast they relate to completely new fields. . And it is that above all that can give us new impetus.
Source of the image : Julien Eichinger--Fotolia / KROENERT