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New study on preferential agreements and TTIP

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Logistics Insight Asia | 27 January 2015

New study on preferential agreements and TTIP

The new research study from AEB [supply chain logistics software provider] and DHBW [Baden-Wuerttemberg Cooperative State University] shows that companies expect TTIP to have almost no positive effects on employment and financial development.

Only about a third of the 177 participating global trade and logistics experts across various industries believe that their companies will benefit financially from the Transatlantic Trade and Investment Partnership (TTIP). Expectations are even more restrained when it comes to the effects on employment, with 82 per cent of respondents expressing doubt that TTIP will lead to positive developments in this area. Looking at the expected positive effects, most participants cite the elimination of non-tariff barriers (62.5 per cent of respondents) and easier access to markets (57 per cent of respondents) as the main advantages. Regardless of how the respondents feel about TTIP, 54 per cent of all participating industry experts believe that the agreement will be “very relevant” to their companies, while only 10 per cent feel that the topic bears no relevance to them.

78% of surveyed companies use preferential agreements

Businesses generally regard free trade agreements as part of their everyday operations. International business activities without the use of available preferential agreements tend to be the exception. The primary motivation for using preferential agreements is to reduce customs duties. The overwhelming majority of respondents report that customers expect to receive preferential documents for their goods. Due to the high cost of administration and IT, the cost-benefit ratio is often viewed quite critically.

Key GTM priorities for 2015

In addition to questions about trade agreements, this year’s study also asked about companies’ key priorities for global trade management (GTM) in 2015. Participants consider compliance with embargo regulations their most important task. Second and third place go to ensuring legal protection and implementing changes to customs regulations. In addition, the importance of minimizing supply chain risks has increased significantly: This topic climbed from eighth place in last year’s study to fourth place this year. “Lowering overall GTM costs” only ranks tenth in the list of key 2015 GTM priorities.

“These findings must be viewed in the overall context of numerous crises currently unfolding around the globe, which certainly influence perceptions of global trade risks,” explains Ulrich Lison, co-author of the study and global trade expert at AEB. “In particular, the developments in Russia and Ukraine are omnipresent, of course. Businesses today face the challenge of adapting their processes to comply with continuously changing regulations.”

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 source: Logistics Insight Asia