Bulgaria strongly supports the spirit and purpose of the envisaged Transatlantic trade and investment partnership agreement between the United States and the European Union and would like to see it signed as soon as possible, President Rossen Plevneliev said on October 24 2013.
Plevneliev was speaking in Sofia at a forum organised by the American Chamber of Commerce in Bulgaria entitled “Transatlantic Economic Cooperation competitiveness and growth . Transatlantic Partnership on Trade and Investment : Perspectives of Bulgaria”.
The partnership was expected to contribute to GDP growth of 0.4 to 0.5 per cent by 2020, and the effect of implementation through removal of excess tariffs and red tape for business would be an annual 540 euro for families in the EU and $650 for a US family, Plevneliev said.
“As one of the countries with sound fiscal performance and economic growth in recent years, we support any attempt to stimulate the economy, especially when the price is the release of the business from red tape . The success of the negotiations would increase US investment in Bulgaria , will significantly increase trade volume and trade in goods and services on both sides of the Atlantic. There will also be many new jobs,” he said .
He said that the main priorities for Bulgaria in terms of transatlantic trade and investment partnership included the removal of tariffs and improved access to the US market, especially for agricultural commodities and food products, for the production of Bulgarian industry, eliminating non-tariff barriers to trade , the approximation of the regulatory framework and standards , as well as approximation of the rules of origin and to improve market access for services and procurement in the US.
Bulgaria would work to enforce the rules of intellectual property and geographical indications, Plevneliev said.
For Bulgaria, a basic principle in the negotiations should be concessions for small and medium businesses in Bulgaria, which are the backbone of a market economy, but which are also experiencing the greatest difficulties when entering foreign markets.
Therefore, one of the objectives in the negotiations on the agreement would be to build cooperation in support of small and medium businesses, improving access to information and to find appropriate partners and comply with the requirements of the US market.
US ambassador Marcie Ries told the AmCham forum that the partnership agreement would, when implemented, make it easier and more profitable for Bulgarian companies to look into accessing the US market.
The ultimate goal of the agreement was not deregulation but better alignment of US and EU rules, she said, also acknowledging that negotiations between the EU and US were likely to be difficult.
Joseph Quinlan, managing director and chief market strategist, US Trust, Bank of America, said that the EU was the largest economy in the world, 30 per cent larger than that of China.
The EU economy was not only large but it was wealthy, in contrast to the economies of India and China, large but with substantial proportions of the population who were poor.
Developing economies were not living up to expectations, he said, which in turn was a consequence of the European economy having slowed – again an illustration of the significance of the European economy.
Quinlan said that he was “cautiously optimistic but more cautious than optimstic”about the future planned agreement, pointing to the risk of it being a “grand plan being hatched by elites” while for countries to be involved, the message about it was not widely known.
Hendrik Bourgeois, president of AmCham to the European Union, told the discussion that for the past four to five years, it had been difficult for American affiliates in Europe because the attention of boardrooms in the US was directed elsewhere, to markets such as India, Australia and the Middle East.
Bourgeois said that the partnership agreement would be a very good tool to bring Europe to the attention of the boardrooms of America.
He underlined the advantages that would result, for example, from the removal of import tariffs.
He said that it was not a conventional free trade agreement but one that sought convergence on product regulation, with examples of advantages being trade between the US and the countries of the EU in the pharmaceutical products industry.
Another example was in the energy sector, where the partnership would ease the export licensing system, a significant step given the sharp difference in natural gas prices in the EU and the US, with these prices being much lower in the latter.
He said that key issues in the negotiations would include for Europe to speak with one voice, in spite of it being not accustomed to doing so, and for the US also to make concessions in the negotiations.
Exploratory talks concerning an EU-US trade agreement had taken place in 2007, when Germany held the rotating presidency of the European Union and was keen on such an agreement, but yielded no result, German ambassador in Sofia Matthias Hoepfner said.
Instead, a push was made at the time to pursue a similar agreement with Canada, where Hoepfner was then German ambassador. These talks concluded earlier this month with the Comprehensive Economic and Trade Agreement.
“I do believe that it might very well serve as a benchmark for the Transatlantic Trade and Investment Partnership and could, at least to some extent, guide the way in the negotiations,” he said.
Hoepfner underscored the need to address non-tariff trade barriers, both to goods and services – issues such as regulatory norms, mutual recognition of qualifications, intellectual property rights and movement of employees.
In Bulgaria, such non-tariff obstacles included “continued deficiencies in the law enforcement system, corruption, weaknesses in the administration, the need to improve the protection against unfair competition, quality standards and the ethics of the media, and another topic that needs improving is the vocational training system, which has very high importance for investors,” he said.
“If these basics are fixed, I’m sure that the Transatlantic Trade and Investment Partnership would greatly enhance the prospects for foreign direct investment in Bulgaria,” he said.
Bulgarian MP Tomislav Donchev, who was EU funds minister in Bulgaria’s previous centre-right government, meanwhile sought to raise a note of caution, saying that the removal of trade barriers, while indisputably a positive development for markets and consumers, also carried certain risks.
“Those regions and businesses that suffer from structural deficiencies, when they face a sudden strong competitive pressure, not always manage to make it to foreign markets,” he said.