2005 European Trade & Investment Interest Survey

European Trade &

Investment Interest

Survey

June 2005

The U.S. Chamber is gauging U.S. business interests in deepening and broadening trade and investments with Europe. The U.S. government is currently assessing what should be included in a regulatory cooperation and investment agreement with Europe. The results of this survey will help us understand U.S. business barriers and priorities.

Highlights from Companies that do Business in/with Europe

  • Regulatory cooperation was ranked the highest as a sector that should be included in a regulatory cooperation and investment agreement with Europe;
  • Accounting standards and security rules and competition/anti-trust laws were also ranked high;
  • 72% of responding small enterprises want to do more business with Europe;
  • All responding companies with 100 or more employees want to do more business with Europe;
  • The more companies are already involved in the European market, the more the companies have plans to significantly increase their business with or in Europe within the next 5 years;
  • Exchange rate fluctuation and regional and local rules/procedures appear to be the most problematic of the trade and investment obstacles with Europe;
  • State and regional aids to competing local companies, EU regulations, the ability to find partners and technical standards and certification are ranked as problematic by a majority of the respondents;
  • Large companies with a European presence (affiliates) are more interested in a regulatory agreement than in a free trade agreement.

Summary Findings

I.Respondent Demographics

  • Of the responding companies, 44% represent companies with “20 or more employees.”
  • For reporting purposes, respondents in the “101 to 500 employees” category have been combined with those having “more than 500 employees.” Therefore, the new category of those having “more than 100 employees” represents 10% of total respondents.

II.Commercial Activities in Europe

Commercial Activities / % of all
Respondents
Export/Import products / 36.5%
Export/Import services (other than financial) / 3.2%
Export/Import services financial services / 2.4%
Invest in European ventures/partnerships / 1.6%
Transit of goods to/from third markets / 1.6%
Research and development / 0.8%
None / 51.6%
Other* / 1.4%
  • Approximately half of the survey respondents engage in some form of commercial activity in Europe.
  • Due to the respondent demographics, and the large proportion of SMEs that responded to this survey, “export/import of products” category gathers the larger percentage in this chart. However, in overall numbers, trade in goods accounts for less than 20% of transatlantic commerce, which consists mainly of investment flows and foreign affiliate sales.

III.Commercial Activities of Those Respondents Who Do Business in or with Europe

  • Of the responding companies that presently engage in commercial activities with Europe, over three-fourths export/import products, while about one in twenty respondents have non-financial export/import service or Europeanventures/partnerships.
  • Size was not a factor in whether a company exports/imports products or services.

IV.Percentage of Revenue Associated with Commercial Activities in or withEurope

  • Of the responding companies that presently engage in commercial activities with Europe, half derive 10% or more of their revenue from commercial activities with or in Europe.
  • Those companies with a higher percentage of their revenue currently associated with activities in Europe are more optimistic about their future activity in Europe.Note that increase and substantially increase have been combinedas well as decrease and substantially decrease.

For example, 65% of the companies that currently derive less than 10% of their revenue from European activities expect to increase or substantially increase their business with Europe over the next five years, compared to 93% or those who derive 25% or more of their revenue from European activities.

  • A majority of the respondents that engage in European commercial activities would like to do more business with or in Europe.
  • Almost three out of four companies with less than 20 employees (72%) and companies with between 20 and 100 employees(71%), wanted to do more business with Europe.However, all responding companies with 100 or more employees were interested in doing more business with Europe.

V.Regulatory Cooperation and Investment Agreement with Europe

  • Nearly half of the respondents (43%) believed that regulatory cooperation was the most important sector to be included in the regulatort cooperation and investmentagreement.
  • Well over half of the participants selected regulatory cooperation (60%) or competition/anti-trust laws (57%) as the most important or 2nd most important sector for the agreement.

VI.Trade and Investment Obstacles When Doing Business withEurope

Trade and Investment Obstacles / Very
Problematic / Somewhat
Problematic / Not
Problematic / N/A
Exchange rate fluctuations / 24% / 44% / 22% / 10%
Regional and local rules/procedures / 21% / 32% / 38% / 9%
EU Regulations / 19% / 32% / 37% / 13%
Customs procedures / 14% / 20% / 58% / 9%
Technical standards and certification / 13% / 41% / 38% / 9%
Taxes / 13% / 23% / 43% / 21%
Difference in accounting and securities rules / 12% / 23% / 42% / 23%
Ability to find partners / 8% / 47% / 35% / 10%
Market uncertainty/risks / 8% / 40% / 42% / 10%
State and regional aids to competing local companies / 8% / 38% / 32% / 22%
Market access restrictions for your sector / 8% / 22% / 55% / 16%
Level of information / 5% / 43% / 44% / 8%
Labeling/advertising rules / 5% / 28% / 47% / 20%
Ability to secure funding / 5% / 20% / 44% / 31%
Other* / 5% / 14% / 19% / 62%
Quality control/consumer protection / 2% / 38% / 43% / 17%
  • Of the responding companies that presently engage in commercial activities with Europe, one in fourview exchange rate fluctuations as very problematic. The larger companies view EU regulations as much more of a problem than the smaller firms, (i.e., 11% of respondents with less than 20employees and 33% of those respondents with more than 100 employees view EU regulations as very problematic).
  • Customs procedures are found to be very problematic or somewhat problematic for the companies at 38%for companies with less than 20 employeescompared to 20% (very problematic or somewhat problematic) for organizations with more than 100 employees.

About the U.S. Chamber of Commerce

The U.S. Chamber of Commerce represents more than 3 million businesses, nearly 3,000 state and local chambers, 830 associations, and over 100 American Chambers of Commerce abroad (AmCham).

For more information in regards to this report, please contact:

Scévole de Cazotte

Senior Policy Director, European Affairs

US Chamber of Commerce

Tel: +1 202 463 5482

E-mail:

Deiadre Rauch

Permanent Representative

US Chamber of Commerce

Avenue Des Arts 19 A-D

B-1000 Brussels

Telephone: 02 218 32 97

E-mail:

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U.S. Chamber of Commerce