Auto-Parts Makers Eager for Passage of Trade Pact

BRUSSELS – European auto-parts manufacturers are so convinced of the potential benefits of the proposed Transatlantic Trade and Investment Partnership between the U.S. and the European Union that they want an agreement reached before 2017.

Speaking Feb. 4 in Brussels during an event dedicated to interest groups affected by TTIP, Paul Schockmel, CEO of the European Association of Automotive Suppliers, called on negotiators to step up their efforts so an agreement can be finalized by the end of next year.

His enthusiasm has been whetted by anticipated gains auto-parts makers on both sides of the Atlantic would accrue if existing tariffs were eliminated and some differing regulations and standards are leveled out or at least mutually recognized.

U.S. tariffs on European car parts are about 2.5%, while EU duties stand at about 8%, Schockmel says, noting, “In 2011, $1.7 billion in tariffs on parts was paid bilaterally.”

Tariffs are only the tip of the iceberg, he says, as the main costs incurred by European and U.S. parts producers – estimated at $12.8 billion – result from “divergent regulations and standards relating to emissions and safety.”

Automotive suppliers on both sides of the Atlantic thus want to see the differences harmonized, Schockmel says, adding, “If not possible, we support mutual recognition provided that safety levels are not lowered.” However, future regulations in the sector should be harmonized, he says.

Schockmel also asks for customs procedures to be simplified and for the establishment of a transatlantic regulatory cooperation body “to facilitate regulatory approximation and an early warning mechanism to consult on planned legislation.”

CLEPA’s latter wish could be granted if talks on a regulatory cooperation council proposed by the EU are successful. Concrete discussions on the issue took place for the first time last week in Brussels during the eighth round of TTIP negotiations, says Garcia Berero, the EU’s chief TTIP negotiator.

While precise terms of the EU proposal presented to the U.S. will be made public Tuesday, Berero says the EU wants to establish good regulatory practices and enhance regulatory cooperation with the U.S. through this body. This would include assessments of a proposed new regulation’s impact on transatlantic trade and consultations with interest groups on specific issues, he says.

This council also would ensure there is an ongoing organized dialogue between regulators on the two sides, especially to agree on future transatlantic auto-industry issues that might not be resolved by the TTIP negotiations.

U.S. negotiators last week also presented a proposal on the cooperation body that “focuses on good regulatory practices – that the stakeholders can know what the proposed regulation is about and there is an accountability for the regulators to take their comments into account,” Dan Mullaney, the chief U.S. TTIP negotiator, says during the Feb. 4 meeting.

Representatives of EU and U.S. automakers support the regulatory cooperation council, which they would want to see help develop future regulations in the automobile sector.

ACEA, the European automobile manufacturers’ association, the American Automotive Policy Council (AAPC) and the U.S. Alliance of Automobile Manufacturers (Auto Alliance) have commissioned two studies on passenger-car regulations and standards, which are ongoing. One is meant to highlight and recognize the equivalence of existing automotive technical standards based on comparable outcomes and performance; the other is examining the costs created by the diverging regulations between the EU and the U.S.

There also is some ongoing work on recognizing the equivalence of emissions standards for commercial vehicles, ACEA Secretary General Erik Jonnaert says at the Brussels event.

That group is analyzing “in‐use/real-life emissions data to establish the functional equivalency of emission performance of heavy‐duty engines according to the Euro VI or EPA 10 criteria emission standards,” he says.

The analysis is being conducted in cooperation with the U.S.-based Truck and Engine Manufacturers Assn.

Negotiations are expected to intensify, according to the chief EU and U.S. TTIP negotiators, with a view to agree on as much as possible this year. In Europe, however, the European Commission, which is negotiating the agreement on behalf of the EU, is facing increasing public opposition to the trade agreement.

In the U.S., President Obama still has to secure the trade-promotion authority from Congress, with a bill on the issue expected to be voted on in March. The outcome of the vote is still uncertain.

“While many Republican members of the U.S. Congress may be willing to give that authority to the president, many Democrats are worried about the consequences of the trade agreements being negotiated for U.S. workers, and strong support from both will be necessary,” Charles Uthus, AAPC vice president for international policy, tells WardsAuto.