Britain’s small and medium-sized enterprises (SMEs) are ill-prepared for the introduction of the Transatlantic Trade and Investment Partnership (TTIP), new data from Close Brothers reveals.
The TTIP is a new trade agreement between the US and the European Union due to be finalised by the end of the year. The timing means the new rules are likely to come into effect well before the UK is able to conclude negotiations on how it will withdraw from the EU.
Despite this, the TTIP is not yet on the radar of many firms.
The latest Close Brothers Business Barometer reveals just 39% of SMEs are aware of the potential implications of the TTIP.
Of those SMEs that are aware of the ongoing TTIP negotiations, some 38% believe the agreement is likely to have a positive impact on their business, against 24% who fear the effects could be negative. A further 38% say they are not yet sure what the agreement will mean for them.
There has been suspicion surrounding the TTIP as negotiations over the fine print of the agreement have been conducted behind closed doors.
While business groups hope the deal will be good news for British companies that export to the US, others fear the benefits will disproportionately favour larger organisations – and also disadvantage British firms that generally have to cope with more regulation than their US counterparts.
“SMEs are not yet clear about the potential impact of the TTIP,” warned David Thomson of Close Brothers. “For one thing, not enough businesses are yet aware that this is a significant issue that really should be on their radars; but even amongst those firms where awareness is good, there are very different views about whether this will be a good deal for SMEs.”
Close Brothers’ figures show that amongst SMEs looking forward to the TTIP, improved export opportunities and lower costs are seen as the biggest potential gains. For those concerned about the deal, the major worry is that larger companies will gain the greatest advantage.
“Close Brothers’ latest Business Barometer suggests SMEs need to do some serious thinking over the next few months,” added Close Brothers’ David Thomson. “And while the EU referendum may have been distracting, it would be a mistake to think that the UK’s decision to leave the EU will mean our businesses no longer need to consider the TTIP relevant to them.”