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SMEs in EU Trade Policy-Making: What Drives the Representation of their Preferences in the TTIP Negotiations?

Matthias Goetz

The Transatlantic Trade and Investment Partnership (TTIP) has been presented to provide large economic gains particularly for European Small and Medium Enterprises (SMEs). The aim of this paper is to analyse how and to what extent SMEs were able to enter their preferences into the TTIP negotiations. In line with recent demands of the interest group literature to focus on how organisational features of interest groups influence their strategies, this paper examines if the internal organisation and EU-level activities of business associations representing SMEs determines how SMEs can articulate their preferences to decision-makers. The theoretical part of this paper defines preference formation of firms derived from economic interests as well as the organisation and activities of business associations which represent them. Empirically, this paper compares TTIP preferences of German manufacturing and food SMEs, drawing on expert interviews with representatives of firms and their business associations. Due to their comparatively strong political organisation German SMEs are "most likely" to have great access to EU decision-makers. German manufacturing and food SMEs are, however, "most different" with regard to the fragmentation, internal organisation as well as the EU-level representation of their business associations. This paper finds that the weak representation at the EU level and the national fragmentation of business associations creates obstacles for food SMEs to communicate their preferences to decision-makers at the EU level. The high vertical integration and hierarchical internal organisation of manufacturing business associations give manufacturing SMEs better access to EU decision-makers, but make it difficult to articulate SME-specific concerns. Public consultations and European Commission Stakeholder Dialogues are difficult to use for many SMEs because they presuppose high legal and technical expertise. The findings on challenges for SMEs to communicate their TTIP preferences to decision-makers are assessed in the implications for the democratic legitimacy of EU interest group politics.

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