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Why family companies need free trade and TTIP

Way up north by the Arctic Circle, a Swedish family has been making world-class windows for more than 30 years. Bullet proof, fire proof, sliding in all directions – they do it all. They just can’t export to the US – not without a free trade agreement.

Why family companies need free trade and TTIP
Svalson CEO Maud Spencer. Photo: The Confederation of Swedish Enterprise

Maud Spencer started working at Svalson 15 years ago but she has always been surrounded by Svalson glass.

Svalson is a family company. It was founded by my father and his brother-in-law, and I took over as CEO about ten years ago,Spencer tells The Local.

Now my brother and my cousin work here, and during the summer my two sons come and work here as well.

It’s a small company, employing just about 40 people in the small northern Swedish town of Öjebyn, but its been going strong for 35 years now, thanks to its one-of-a-kind products.

We are world leaders when it comes to sliding windows,” Spencer says. “We have totally changed the way a reception looks, and all of our windows are tailor-made.

In fact, Svalson is the creator of the only fireproof automatic sliding window in the world a niche market, but nevertheless an important one, Spencer says. The window has been tested and approved by European standards and is accepted throughout Europe.

That means we can sell it over the world Australia and Japan accept it as well.


Svalson glass wind barriers. Photo: Svalson

Theres just one notable exception: the US.

America doesnt accept it,” Spencer says. “If we want to sell it in America then we need to do the tests again in the US.

That would involve flying not just staff but the massive windows themselves to the US and would cost at least €32,000.

For a big company that wouldnt be a problem at all,” Spencer muses. “But for a family company of our size, its an issue.

Svalson has always been an international company, selling to other European countries very early on. But for decades they have been forced to avoid the US.

We always received lots of requests from the States but we said no,” Spencer explains. “It’s just too complicated.

Recently, the company has discovered a loophole that allows them to reach some customers in the US: exporting via a distributor in Canada.

The United States’ northern neighbour accepts the standards and certification of Svalsons products. Yet it’s a cumbersome and expensive way to export – when they should be able to go direct to their American customers:

They dont have to pay the duties or get stuck with paperwork like we do, but they definitely hike the price. It becomes much more expensive for the end user.

In a sense, the Canadian loophole illustrates the absurd nature of many of the trade and regulatory barriers that exist between Europe and the US. Standards are similarly high on both sides of the Atlantic, but are not mutually recognized.

For small businesses like Svalson and the end customers on the other side of the Atlantic TTIP would be a game changer, saving both customers and manufacturers time and money.

TTIP would make a huge difference for small companies,” Spencer says. “It takes away the bureaucracy and would speed up customs, and obviously it would help with the prohibitive costs.

Accessing the American market would double not only sales for the company, but the size of their team as well.  And it would be only natural, Spencer says.

We really would like to take our products to the US. We have the same values, the same needs. Why not?

Spencer says that Svalson would gladly accept US standards. But then it should be enough to allow their products through without additional costly testing.

We can very easily adjust to new standards as long as we know what they are. So that is what we need, to have the same standards and not have to go through expensive tests so many times. Its a shame to burn so many of your products,Spencer remarks.

And its a two-way street, the Swede adds. European companies could learn a lot from American regulatory standards as well.

For example, one of our products is a railing we use for balconies,” Spencer explains. “But in the US it is only allowed for use on the ground floor because the top of it is flat. In the US railings have to be round so you cant put a glass on it or something.

Spencer says thats exactly the type of standard that Europe should adopt as well.

We would make safer and better products if we could use the best of both standards.

This article was produced by The Local in partnership with Svenskt Näringsliv, The Confederation of Swedish Enterprise.

TRADE

‘Exports have steadily sunk’: Brexit sends Britain sliding down German trade rankings

Britain is slipping down the list of Germany's most important trade partners, official data showed Monday, after its 2016 vote to quit the EU marked an end to growth in exchanges.

'Exports have steadily sunk': Brexit sends Britain sliding down German trade rankings
A Eurotunnel employee checks a truck with a British flag sticker. Photo: DPA

Between January and July, Britain was only Germany's seventh-most important partner with combined imports and exports of almost €68.5 billion, federal statistics authority Destatis said.

Exports to Britain fell back 4.6 percent compared with a year earlier, to 47.1 billion, while imports shed 3.7 percent, to 21.3 billion. In 2015, Britain was fifth in the ranking.

Ahead of the island nation were China, the Netherlands, the US, France Italy and Poland, while Britain outstripped Austria, Switzerland and the Czech Republic among the top 10.

“Before the referendum, German exports to Britain rose continually from 2010 to 2015,” the statisticians noted.

“Since the referendum in 2016, exports have steadily sunk.”

For all The Local Germany's Brexit coverage CLICK HERE

The picture is different in imports, with Germany buying slightly more from Britain since the Brexit referendum.

But the gap between the two figures remains wide.

In the year to July, Britain bought €25.8 billion more of German goods than it sold in the opposite direction.

Auto industry woes made a strong contribution to weaker business between Germany and Britain, with cars and parts accounting for just below 25 percent of trade volume.

German auto exports to Britain fell 9.7 percent in January to July, while imports fell 9.1 percent.

READ ALSO: Brits face residence permit costs of up to €150 in no-deal Brexit

'Massive tariffs overnight'

As The Local reported in July, European trade association Business Europe warned against a no-deal Brexit. The consequence of a no-deal would be “massive tariffs overnight”, said the General Director of Business Europe, Markus Beyrer, to Funke Media Group newspapers.

Even if Boris Johnson claims the opposite, he is mistaken, Beyrer said, adding: “Yes, there will be customs duties.”

Beyrer said without a withdrawal agreement, the UK would move from fully integrated EU country status to absolute non-status. “There is hardly a country in the world, perhaps apart from North Korea, that would have an even worse level of agreements with the EU,” he said at the time.

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