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Woolpower: "The TTIP free trade agreement would enable us to employ more people"

A free trade agreement between the US and Europe would be highly significant for Woolpower, a company that manufactures woollen undergarments in Sweden. Duties would be removed, and common standards for flame-retardant clothes would be established.

The Woolpower company manufactures functional woollen undergarments for professional use. All production – from woollen thread to completed garment– takes place in the factory in Östersund. This is unique. It is currently the only textile company that manufactures clothes in Sweden.


“We focus on functionality. We manufacture high-quality products that keep you warm. Some of our largest customers are the police, armed forces, railway companies and electricity suppliers. People who work outdoors in the cold,” says Adam Brånby, who manages the company together with his brother Daniel.


The brothers manage also sister companies, Gränsfors bruk, which manufactures axes, and Svedbro smide, whose products include forged crowbars. All three companies export a significant fraction of their production. This is 70-80% in the case of Woolpower, where Europe, South Korea, Japan, the US and Canada are major export markets. Woolpower currently employs around 100 people, and estimated net sales for 2016 are SEK 90 million.


Since the US is an important market for Woolpower, Adam Brånby has looked carefully at the negotiations around a free trade agreement between Europe and the US. He believes that TTIP would bring two different types of advantage for the company. The first concerns certifications that are required for certain products and that differ between the two regions. For Woolpower, this principally concerns flame-retardant undergarments that are sold to certain parts of industries in which such clothes are necessary. These are people who work, for example, on oil platforms or electricians who work with high-voltage lines and who must have flame-retardant clothes in the outer shell, shoes, etc.


“Our products are certified according to European standards. We do sell a lot to the US, but it is, even so, a small part of our total sales. And flame-retardant products are only a small fraction of our sales in the US. So obtaining certification in the US for these products would be too expensive. This is too small a fraction of our sales and we can’t afford to take the chance until we have customers there.”


But, winning these customers can, in turn, be difficult without the correct certification.


“Some customers in the US say that they can purchase clothes that are certified according to European standards. ‘If it’s not flammable in Europe, it’s not flammable in the US,’ they say.  But other possible customers, in particular organisations in the public sector, such as the police and other government agencies, would like to purchase our products but require that they are certified according to American standards.


This means that Woolpower can’t sell its products to American government agencies. The market at the moment is too small to justify us applying for the certification that is required. Certification in itself is an expensive process, as is also maintaining it from year to year. And this is where TTIP can play a role,” says Adam Brånby.


“This is the crucial point. A garment burns just as rapidly or slowly no matter where it is. The problem is that different regions measure different properties, and everyone wants to use their own standard. We would have to maintain two different standards, which would be twice as expensive. And so we have decided not to apply for certification according to one of the standards, because we can’t afford it. And this is, of course, very frustrating. This is where we are convinced that the TTIP free trade agreement really would be a benefit.


Because, to be honest, it’s not a matter of one of the standards being better than the other: it’s just that the regions have decided to measure flammability in different ways. What’s most important is that the same regulations apply,” says Adam Brånby.


“The American government agencies don’t believe in the European standard, and the European government agencies don’t believe in the American standard. This is exactly what TTIP is about:  sitting down around a table and saying ‘We’re all adults, and if you buy our products we’ll buy yours’.”


The second area in which Adam Brånby believes that the free trade agreement would bring advantages for Woolpower is import duties. Everything sold to the US is currently subject to import duty of 8-18%.


“The amount of duty differs between upper-body garments and trousers, and between clothes for adults and those for children, for example. And the duty means, of course, that our products are a certain amount more expensive than those of our American competitors, which is a major problem for us when selling in the US. The price difference can be quite large, simply because we have to pay import duty.”


The duty also causes a certain amount of paperwork, but the company’s American distributor looks after this. It is the duty itself that is crucial from Woolpower’s point of view.


“So we have here two clear issues that lead to us selling less in the US than we otherwise would: the import duties that make our products much more expensive there, and the different certification that is required. And if our sales were to increase, we would be able to employ more people. It’s as simple as that.”


It’s difficult to estimate how much larger sales could be, but Adam Brånby believes that the amounts involved are considerable.


He also underlines the significance that the free trade negotiations have for the future coordination of regulations.


“TTIP would be incredibly important for us Europeans to be able to make our voice heard in the future when discussing standards. We would like to believe that we are the centre of the world. But if the US and China were to agree that they should be the ones to decide about standards and took the attitude ‘We don’t care what Europe thinks’, well, we would be left sitting here on our own wishing for things as we wanted them. But the US and China together would be such a large player in the field that the rest of the world would just have to adapt to what they decided. In that case we would have no possibility at all to influence what happened.”


Adam Brånby compares this with Sweden’s relationship with the EU and how important it is from a Swedish point of view that we have a place at the negotiating table there.


“This is just incredibly important. The most important legislation is the legislation that has not been passed yet. If TTIP comes about, we will be included in the decision-making process. This would not be the case without TTIP. And then, the US would probably sit down and start talking to China instead.”

Tags: SMEs

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