"The challenge of complying with technical rules and regulations for all goods is the most frequently cited issue. In some cases, EU SMEs say they are legally excluded from the market," the report states.
In an online survey of 869 European companies, respondents in manufacturing industries highlighted sector-specific rules, while those in the service sector pointed to movement restrictions.
Among other difficulties presented to SMEs by TTIP is access to information relating to product regulation.
"An agreement needs to be ambitious, comprehensive, and maintain our high levels of regulatory protection," Trade Commissioner Malmstrom said in a press briefing accompanying the report's release.
According to the report, European SMEs account for 88 percent of total exports to the United States, valued at over $82.5 billion or nearly a third of all EU export value to the US.
Over the weekend, hundreds of thousands of activists have staged anti-TTIP protests across European towns and cities in nearly 750 demonstrations.
Activists, including some European lawmakers, believe the agreement under negotiation threatens European social, privacy and environmental standards.
Advocates defend TTIP as a measure paving way to a wider US export market. Opponents argue the agreement, and the speed and secrecy surrounding the negotiations, undermines Europe's market regulation abilities.
