Crain News Service report
DETROIT (Aug. 6, 2015) — Harmonizing global auto standards and regulations is an elusive goal, but two pending trade pacts offer a window of opportunity to accomplish that.
Both the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership include a goal to reduce differences in country-specific rules, standards and regulations. If trade negotiators can hammer out the terms, the financial payoff for the auto industry could rival that of the treaties' primary target of lowering tariffs and duties.
The industry's stake is huge. If car makers didn't have to design and build dozens of substantially different versions of vehicles to meet the rules of various world markets, auto makers and suppliers would gain economies of scale and reduce the burden on their product-development staffs.
As capital demands mount for auto manufacturers, that's a critical advantage. Consumers also would benefit directly from more affordable autos and more choices.
It won't be easy. Governments hate to limit their power to set policy. Established automotive standards and trade law take on a life of their own.
Not every rule can be standardized. No country will switch which side of the road its citizens drive on, for example. But others may be easier — such as harmonizing crash standards, fuel purity, evaporative emissions and onboard diagnostics.
The path to greater harmonization is clear. The Alliance of Automobile Manufacturers, the American Automotive Policy Council and the European Automobile Manufacturers' Association have worked together to lobby for harmonization within the Transatlantic deal.
That's a laudatory approach. Regulators should listen to arguments based on sound data.
If harmonization is impossible, governments should at least recognize one another's standards if their safety or environmental outcome is effectively the same.
Auto makers and suppliers should keep lobbying for trade rules that reduce complexity and waste, communicating clearly with appropriate officials.
It's horse-trading time. The winners will be those that have decided exactly what they want and how to get it.
This editorial appears in Automotive News, a Detroit-based sister publication of Tire Business.