Stakes High for U.S., EU Automakers in Trade Talks

BRUSSELS – European and American automakers are urging U.S. and European Union negotiators to be ambitious as they try to forge a Transatlantic Trade & Investment Partnership (TTIP) agreement.

Erik Bergelin, European Automobile Manufacturers Association director-trade and economics, and Matthew Blunt, president of the American Automotive Policy Council, together are calling for the agreement to recognize the equivalence of engine emissions standards and safety regulations.

Speaking in Brussels ahead of a sixth round of negotiations to form a wide-ranging EU-U.S. trade agreement, the two association executives agree the auto industry stands to gain most from a deal.

The AAPC estimates U.S. and EU carmakers trading in each other’s market currently face non-tariff barriers amounting to 26% of the costs of production. “Convergence of U.S. and EU regulations would save automakers on both sides $3 billion to $4 billion annually from auto-safety regulatory efficiencies and $7 billion on environmental costs,” Blunt says.

He says sustained political support at the highest levels of government is necessary to overcome regulatory or public opposition. “What we’re trying to do here is cut the Gordian knot of regulatory divergence.”

The associations have jointly commissioned research to analyze whether cars manufactured under each regulatory code perform equally well on safety and environmental tests in real-world conditions. Auto industry representatives hope the research, due to be released by year’s end, will bolster their claim that there are few practical differences in outcomes produced by different regulations on either side of the Atlantic.

Despite this, Blunt concedes not all aims will be achievable within the TTIP agreement. “We want to work down the list of standards and try to integrate as much mutual recognition as possible into the agreement, with some standards and regulations being dealt with subsequently,” he says.

“It’s not going to be an easy discussion, but there is strong support on our side to working with negotiators to reach regulatory convergence.”

Bergelin adds: "TTIP is very important to us – the figures speak for themselves. The U.S. and the EU are the second- and third-largest producers of passenger vehicles in the world. Unfortunately China is ahead, but TTIP can give us the lead in global sales and production.

“What is at stake here in TTIP is relevant for manufacturing jobs on both sides of the Atlantic.”