Automakers slam the GTR process

24 May 2013

Claiming “there is little to show for these efforts”, US and European automakers propose to bypass WP.29 in favor of a new bilateral US-EU regime.

“In the past fifteen years, only seven safety regulations have been globally harmonized through participation in the United Nations Working Party 29 (UN WP.29 1998 Agreement),” reads the joint statement by the American Automotive Policy Council (AAPC) and the European Association of Automobile Manufacturers (ACEA).

Instead, the automakers propose a bilateral “mutual recognition” system where “vehicles in compliance with either the U.S. or EU safety or environmental regulations are considered to offer the same level of safety and environmental performance in both markets”.

The AAPC/ACEA statement was one of several automotive-related submissions to the Office of the US Trade Representative in response to a request for comments on the proposed Transatlantic Trade and Investment Partnership (TTIP), an ambitious US-EU bid to expand trade between the two economies.

Not all shared the automakers’ view.

The Advocates for Highway and Road Safety oppose a move away from the GTR process, fearing that a US-EU agreement on automotive safety regulation “will circumvent the efforts and guiding principles of the already established [1998 Global Agreement].”

Given these varying views, it seems worthwhile to offer some additional perspectives.

“Mutual recognition” is not only a question of agreeing on common standards for vehicle performance, but also of agreeing on the methods for ensuring that these standards are being met.

The World Forum|WP.29 is on the cusp of launching an International Whole Vehicle Type Approval (IWVTA) system that would make mutual recognition of vehicle approvals a reality across the type-approval world.

But IWVTA does not (and cannot) address self-certification regimes such as used in the US.

The problem, therefore, lies not in WP.29, but in the absence of a bridge to render self-certification and type-approval enforcement regimes compatible.

In short, even if the US and EU had identical regulations, mutual recognition would still be a challenge.

Moreover, the goal of the World Forum is not harmonization; the goal is to save lives and enhance the environmental performance of vehicles while reducing the compliance costs for manufacturers.

The number of global technical regulations is irrelevant. The issue is whether the impact of a new global regulation warrants the costs of harmonization.

An early interest in brake standards was abandoned largely because global divergence was marginal. The safety impact would have been negligible with no meaningful reduction in costs for manufacturers.

Unless, of course, there had been mutual recognition. Were a system present to render self-certifications and type approvals compatible, then the possibility of “tested once, accepted everywhere” becomes a reality. And the prospects for cost reduction increase.

This explains why the forces behind establishing type-approval regulations (i.e., the 129 UN Regulations created under the 1958 Agreement) are stronger than those behind GTR and the 1998 Global Agreement.

When you have mutual recognition of approvals, maintaining a common set of test procedures and performance requirements becomes imperative.

Absent mutual recognition, things are not so black and white. The value of harmonizing to a single regulation depends upon a host of factors rather a primordial need to maintain a functioning global system.

Moreover, there is little reason to believe that a bilateral approach would be more effective than the UN system.

The upcoming Pole Side Impact GTR owes much to Australia’s leadership and investment of resources. Japan has been in the forefront of minimum sound levels for quiet vehicles while China is investing heavily in electric vehicle safety.

Sharing resources worldwide clearly offers more potential than limited bilateral cooperation.

Lastly, US and EU regulations respond to different market structures and driver behaviors.

Tire-pressure monitoring systems, for example, were a safety issue in the US given the American penchant for large SUV’s and cases of catastrophic tire failures. In Europe, where vehicles are generally smaller and driven at higher speeds, the main interest was tire rolling-resistance and its effect on CO2 emissions.

Thus, while some differences across regulations are cosmetic, many respond to real differences in local needs.

A process of aligning US and European requirements, including justification of the costs to manufacturers in each market, does not look to be a simple affair.

Clearly, the World Forum|WP.29 should be a topic of discussion as the US and EU consider how best to facilitate automotive trade by improving regulatory efficiency.

But the AAPC/ACEA view of the GTR process seems misplaced.

Certainly the automakers are right that TTIP offers an opportunity for the EU and US to consider whether mutual recognition could work across type-approval and self-certification systems.

But the EU and US commitment to building a global regulatory system should remain intact.

Success in reconciling US-EU differences through TTIP should be used to strengthen the World Forum|WP.29 and the GTR process, not to weaken them through a bilateral bypass.

All comments received by the USTR’s office can be found at the website.

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