Automakers Hoping U.S.-EU Trade Talks Accelerate
Executive Summary
The European Union seeks to match its vehicle standards with those of the U.S. to reduce duplicate testing by automakers wanting to trade across the Atlantic. But there will be instances where the two sides cannot agree.
BRUSSELS – European and American automakers hope the pace of negotiations for a large-scale trade agreement between the European Union and the U.S. will pick up after publication of a new round of official documents by the European Commission.
Earlier this month, the EU’s executive body released a series of draft legal documents and position papers that had been presented to U.S. negotiators during the seventh round of Transatlantic Trade and Investment Partnership talks held in October in Washington.
These include a new-vehicles fact sheet, giving examples of what the negotiations are focusing on in the automotive sector. It stresses how the EU wants to identify current EU and U.S. industrial and safety standards that are equivalent, harmonize regulations and work with the U.S. in developing new regulations.
The EC says the unprecedented move is meant to ensure transparency and dispel the misconceptions that have surrounded the TTIP talks.
“It’s the first time ever the Commission is publishing legal documents while the negotiations are still ongoing,” EU Trade Commissioner Cecilia Malmström said when releasing the papers Jan. 7 in Brussels.
The automobile industry is a strategic sector for both sides in the negotiations. The documents highlight how European and U.S. regulators already are working on matching vehicle technical standards such as rules on seatbelt anchorage.
“Following a careful assessment, based on literature review and accident analysis, it appears that the two sets of requirements have proven to be working effectively and equally well with respect to the practical performance of seatbelt anchorages systems in real-world passenger-car collisions,” the EU executive body concludes in one of the documents.
Differences in technical requirements and testing conditions do not create “meaningful difference” in the real world, it adds.
This is only one of the many standards the EU is seeking to match with U.S. regulations, to ultimately reduce the duplicate testing by automakers wanting to trade across the Atlantic. But there will be instances where the two sides cannot agree that their standards are equivalent.
In such cases, the EU wants to develop with the U.S. global regulations under the United Nations (via its World Forum for Harmonization of Vehicle Regulations) and encourage other countries to adopt them.
Where there are no existing standards, such as for electric vehicles, the EU and U.S. should have the same rules from the outset, Brussels proposes.
The ACEA “hopes that negotiations will accelerate in 2015 and that substantial progress can be achieved, notably on the recognition of equivalence of existing safety regulations for passenger cars and on pollutant emissions for commercial vehicles,” a spokesperson for the European automakers’ organization tells WardsAuto.
The ACEA and its U.S. counterparts are conducting their own studies to show how technical standards are equivalent and how this is determined.
European lawmakers hope to conclude the TTIP negotiations by year’s end. The eighth round of talks is scheduled to take place Feb. 2-6 in Brussels.
The U.S. accounts for 18% of all EU vehicle exports and more than one in eight cars imported into the EU comes from the U.S., according to EC data.
Backing for the trade deal is growing in Washington, where both President Obama and opposing Republicans, who now control both the U.S. House and Senate, have publicly expressed support. “Republicans and Obama have agreed that trade is something they can act on,” says Daniel Hamilton, executive director of the Center for Transatlantic Relations.
However, he predicts there will be a battle between Congress and the White House by March for ultimate authority in trade talks, with Obama seeking a “fast track” mandate enabling him to propose any negotiated deal to Congress for a yes or no vote, without amendment. Regardless, Hamilton suggests a TTIP deal, or at least significant progress toward reaching one, could be seen in December, ahead of the 2016 U.S. presidential campaign season.
Without progress by then, he says, further negotiations might have to wait until 2017, when a new president will be in the White House.
“Now is the time to quicken the pace,” agrees Peter Chase, vice president-Europe at the U.S. Chamber of Commerce. “With a new European Commission just installed in November, our partners are ready to roll up their sleeves.”
Convergence of safety standards “would significantly lower the costs of bringing a new model to market, benefiting consumers and automakers alike,” Chase says.
Charles Uthus, vice president-international policy at the American Automotive Policy Council, identifies regulatory convergence as the primary issue for U.S. automakers in the TTIP negotiations.
“Converting vehicles to sell in Europe is very high-cost, and the current number of U.S. vehicles offered is limited by those associated costs,” he says.
Chris Moore, senior director-international business policy at the National Assn. of Manufacturers, reiterates the importance of accelerating negotiations in 2015 for a trade deal that U.S. automakers “strongly welcome.”
– with Craig Howie in Washington
