RESULTS OF TTIP NATIONAL CONSULTATION ‘’TTIP: ROMANIA’S VOICE’’

 RESULTS OF TTIP NATIONAL CONSULTATION ‘’TTIP: ROMANIA’S VOICE’’ 

MAY-OCTOBER 2015

 

Offensive interests:

  1. Footwear Industry

Remove tariffs for EU shoe exports, currently undermined by significant tariff peaks. According to shoe type, tariffs can reach 37.5% of the FOB prices. Romania has an important tradition in this sector, it has market players for different quality scales, some of whom are already present on the American market or testing it, even under their own brand. Hence, reducing tariffs would represent a major direct benefit for them.

  1. The Ceramic Sector

Remove tariffs for the EU ceramic sector, currently undermined by significant tariff peaks. This is another traditional Romanian sector, highly affected by competition coming from Asia, with problems in accessing the US market, because of high tariffs that vary for different categories of ceramics, ranging between 8.5% and 28%. Nowadays such a tariff is completely prohibitive.

  1. Software, engineering, industrial goods and equipment

Remove barriers for temporary detachment of workers travelling to supply services in the context of sale or services contracts (ITC, engineering, machinery). Beyond the general discussion related to visas in the US, this refers to the detachment, for a very short period, of days or weeks, of specialised personnel that could train clients on how to use software, engineering or consultancy solutions made in Romania, or provide maintenance and servicing for goods and industrial equipment in the USA. These are activities for which, in general, the direct or permanent establishment of a company in the US does not make economic sense. You cannot sign or honour a contract without reasonable reassurance that you have the possibility of sending your team to apply its clauses, in a predictable period of time.

  1. IT&C

Data localisation obligations: Romania is a powerhouse in the IT sector, thus the odds of having data centres located in Romania are higher than for other countries. This is why potential data localisation obligations in other states limit the chances of growth for this sector in Romania. Because of this, but also taking into account the cultural development and globalization trends, the Romanian IT industry wishes to avoid, through or inside the TTIP, unreasonable constraints related to data localisation: the market and local skills should decide. Therefore, policy should follow technological development: define jurisdiction in non-physical ways so as to avoid strict geographical obligations on data localisation.

 

  1. Automotive

Car parts and accessories: this is another field in which Romania became an industrial powerhouse.  This is why, the more standards and regulations are identical or mutually recognized between the EU and US, the better are the chances that suppliers of car parts, components and accessories can sell to the US.  Maximise regulatory convergence for parts and components: would boost Romanian generalist and specialised suppliers of parts and components.

  1. Energy intensive industries

Romanian energy intensive industries, particularly the chemical one, have difficulties competing on the US market because of the very cheap energy that American companies benefit from. To fully liberalise energy markets, in particular LNG, is therefore also a Romanian demand, as this should reduce the price differential between the two shores of the Atlantic, besides the benefits for the European energy security. European negotiators must bear in mind this reality when negotiating the reduction of customs tariffs for products like aluminium: if the existing protection is removed, the difference in the energy price, in addition to the existence of a carbon price in Europe expose these industries to a major risk of downsizing their activities or even disappearing. Here, the offensive interest is closely linked to the defensive one.

  1. Innovative engineering technologies

An innovative Romanian engineering technology (vacuum degassing for liquid steel) applied in the steel industry that has been widely adopted worldwide has not been adopted in the US because the US has less stringent carbon emissions rules in addition to cheap energy. This example shows how points 6 and 7 together form a core industrial competitiveness dilemma for the EU-US relationship.

  1. Exports of mineral water:

Exports of Romanian mineral water in the US are made difficult by the fact that currently separate licensing is required by 19 out of the 50 US states. California and New York have particularly heavy – and of course different – market access systems for mineral water, covering both a water license and factory homologation. The US legislation requires UV lamps to be used on mineral water to remove bacteria; the use of these lamps is forbidden by European legislation and creates the necessity of building distinct bottling lines.

Requests:

  • Recognition by as many US states as possible of water/spring licenses issued by Romanian/European authorities; this does not necessarily contradict American federalism as at the very least they could separately agree in the TTIP to accept mutual recognition of European standards;
  • Mutual recognition of testing laboratories;
  • Removal of the obligation to use UV lamps, which in the EU are not allowed to be used on mineral waters, a request leading to separate bottling lines for water destined to the US and EU markets for no valid reason, as EU rules require an original purity of water that by definition meets American purity standards.
  1. Aeronautics

US Federal Aviation Administration (FAA) should apply national treatment to EU maintenance service providers (and beyond). Inspections for certification conditioning market access on aircraft maintenance contracts should be made available to American and European providers equally.

  1. Access to newest technologies

Remove Romania (and other Central and Eastern European countries, allies of the US) from the list of Controlled Countries/Technologies, requiring special licensing for the export of, for example, High Performance Computing. This status is inherited from a long gone era, whereas as an ally Romania should not be subjected any such restrictions, which are affecting its economic competitiveness.

  1. Meat and processed meat exports

Recognise the equivalence of the Romanian/European inspection systems and the American one for meat and meat products exports. Recognition may be bolstered by a system of mutual inspections with lesser frequency.

Until the recognition of full equivalence, introduce and respect deadlines for the submission of post-inspection reports by FDA/FSIS.

  1. Pharma: see separate paper.
  1. Industrial parts, components

Recognise equivalence of Welding and Non Destructive Testing Procedures (under ASME in US and EN in the EU). Even unification/harmonisation can be considered for such processes which technically are fundamentally the same or rely on the same principles. Romanian suppliers and their personnel have to be certified by independent auditors for sometimes low business volumes when supplying specialised industrial components. This means additional costs and longer lead times.

  1. Wine exports

Eliminate remaining customs duties. Although rather small, they still affect proportionately more exporters of cheaper wines. Other voices in industry would prefer to keep existing import duties on US wines, and therefore do not ask for the removal of American import duties. Several exporters want to see a shorter and simpler wine label approval process (current length of process approximately six months).

  1. Pălincă (traditional national spirit) exports

US import license is prohibitive for smaller exporters, which need to rely on a broker that registers the label, pays the import license cost and thus has a monopoly on further distribution in the US. De facto, the import license acts as a market entry barrier. It could be made cheaper or quasi-automatic for European spirits producers that market legally in the EU.

 

Defensive interests:

  1. Poultry imports

Keep chlorinated chicken out (both society and industry). American chicken drumsticks treated with growth hormones and sold on the Romanian market in the 90s, whether reality or myth, is still present in the collective memory. At industry level, the actors consider they have to deal with more, higher and more costly standards for the entire production chain in comparison to their American competition.

  1. Textile exports

Part of the Romanian textile industry is afraid that reducing tariffs on imports from the US will result in displacing products made in Romania on the European market. Others consider this danger is not real, Romanian products, generally manufactured in lohn, being already well positioned on global markets in comparison with the American and Chinese competition, and, as a consequence, able to compete on premium markets.

  1. Furniture

Keep a competitive edge of market access compared to Vietnam, in particular following conclusion of TPP, which risks boosting the market share of our competitors. With the concessions obtained through the TPP, Asian competition can replace the Romanian furniture on the US market.

Customs facilitation:

  1. Pasta exports: for companies with a positive track record, give up obligation of filling in a P2 pasta export certificate for each and every consignment. This created unnecessary costs, paperwork and delays.
  1. In case of random or risk based custom checks for containers (x-ray), or unannounced FDA checks, limit the duration of the procedure to days rather than two to three weeks at present; communicate clearly with the exporter the details of the procedure; unexpected delays lead to breaches of contracts obligations.
  1. In case of supplementary checks on consignments which take more than a small specified number of days, if the check shows no fault with the exporter, the invoice for the extra-days of storage should not be issued to the exporter, as is the case at present but rather to the customs, FDA or other responsible inspecting authority.

Horizontal requests:

  1. Better information on rules, procedures, requirements, etc., to access the US market.
  1. More/better promotion activities, including participation in fairs and exhibitions in the US.
  1. Removal of visas (as a first step) for business travellers.

 

Social and environmental requests from trade unions and civil society:

  1. Introduce an SME chapter with real, helpful provisions to facilitate mutual market access.
  1. Push the US to ratify all core ILO conventions.
  1. Avoid any erosion of the EU system of collective bargaining using the TTIP
  1. Do not lower or allow the erosion of any health and safety at work standards.
  1. Do not lower social or environmental standards generally
  1. Widespread concern among the unions and civil society that ISDS can be used to induce self-censorship by governments with regard to future legislation/regulations.
  1. ISDS is seen as a systemic risk, beyond its own nature and features.