Industry favors U.S.-EU trade pact

WASHINGTON (July 26, 2013) —The U.S. and European tire and rubber product industries are in favor of efforts by the U.S and Europe to create a free trade agreement between the U.S. and the European Union, which could serve as a platform for increased international standards harmonization.

"There is some potential in this to achieve harmonization," said Dan Zielinski, senior vice president for public affairs for the Rubber Manufacturers Association (RMA), of the proposed Transatlantic Trade and Investment Partnership. "Harmonization is something the U.S. industry has long sought with Europe."

The Motor & Equipment Manufacturers Association (MEMA) also is excited about the opportunity for harmonization, as well as prospects for tariff reform.

"If you're a manufacturer in the U.S. with plants in Europe, you have to pay tariffs on the goods you ship yourself across the Atlantic," said Ann Wilson, MEMA senior vice president of government affairs and onetime RMA official.

"Any way we can address that is a good step forward."

Transatlantic trade in tires was a $1.5 billion business last year, according to U.S. Department of Commerce data. The U.S. imported $1.29 billion worth of car, light and medium truck tires from countries in Europe and exported $258 million worth.

President Obama proposed the TTIP during his Feb. 12 State of the Union address. In his speech, Mr. Obama noted that U.S.-EU trade accounts for nearly half of global economic output and more than 13 million jobs in both the U.S. and Europe.

Mr. Obama said he sought to negotiate a trade and investment agreement that would provide significant benefits to the U.S. in terms of international competitiveness, jobs and growth. Among the goals the president said he sought were to:

• Open markets further to expand the $465 billion in U.S. goods and services already exported annually to the EU;
• Strengthen rules-based investment to expand on the nearly $4 trillion in cross-investment between the U.S. and the EU;
• Tackle "behind-the-border" non-tariff barriers that impede the flow of goods and services; and
• Promote greater regulatory compatibility, transparency and cooperation between the U.S. and the EU, thus cutting the cost of differences in regulations and standards between the U.S. and the EU.

The day before Mr. Obama's speech, the U.S.-European Union High Level Working Group on Jobs and Growth issued its final report, making the same recommendations the president did.

"A comprehensive agreement that addresses a broad range of bilateral trade and investment issues, and contributes to the development of global rules, would provide the most significant mutual benefit of the various options we have considered," the working group said in its report.

The first round of TTIP talks concluded in Washington July 12, with more talks scheduled in Brussels this October.

"This inaugural round marked an important step in transatlantic relations," said U.S. Trade Representative Michael Froman in a prepared statement.

"During the meetings each side presented to the other its ideas on how to proceed, how various chapters might be addressed and how specific issues might be dealt with in an agreement," Mr. Froman said. "These very productive discussions set the stage for increased substantive engagement in a second round."

A USTR spokesperson said the agency couldn't yet say what specific topics will be discussed in Brussels.

Before the negotiations began, USTR formally requested comments from interested parties on the topics they most wanted to be addressed in the talks.

The RMA and MEMA joined their European counterparts to submit joint comments May 10, the deadline for submissions.

The comments by the RMA and the European Tyre & Rubber Manufacturers' Association concentrated on the development of a Global Technical Regulation for light vehicle tires.

Since 2006, industry stakeholders and government officials have pursued a light vehicle tire GTR through the World Forum for the Harmonization of Vehicle Regulations, also known as WP-29.

The forum is a subsidiary of the Inland Transport Committee of the United Nations Economic Commission for Europe.

"In a very competitive global tire industry, the reduction of technical barriers would reduce unnecessary and duplicative testing and lower costs without sacrificing safety," said the comments signed by Tracey Norberg, RMA senior vice president and general counsel, and ETRMA Secretary General Fazilet Cineralp.

A confirmation vote on the light vehicle tire GTR is expected in September, Mesdames Norberg and Cineralp said, with a GTR for light truck and commercial tires expected within two or three years.

Nevertheless, the GTR process does not provide a framework for the harmonization of some key provisions, they said.

"In particular, the GTR does not include administrative provisions for reciprocal recognition between contracting parties through a recognized, globally accepted certification mark to substitute national certifications marks," Mesdames Norberg and Cineralp said.

"The TTIP offers an opportunity for the U.S. and the European Union to chart a new path forward," they said. "We ask that the agreement create a framework to create a common certification mark to indicate compliance with tire requirements specified in the GTR for tires."

MEMA and the European Association of Automotive Suppliers, also known as CLEPA, argued for both harmonization and tariff reform in their comments.