El saber experto del asesor

The Transatlantic Trade and Investment Partnership (TTIP) is viewed as the single most-important trade deal undertaken by the US and the EU. The two partners have undertaken it in response to the changing geopolitical environment, resulting from, among other things, the stalled Doha Round of multilateral trade negotiations, the rise of Asia and Asian regionalism, and the economic slowdown and sovereign debt crisis. Although the deal is expected to promote jobs and growth and strengthen existing economic ties, the prospect for an ambitious preferential trade agreement is also derived from building on earlier initiatives and experience to promote trade, regulatory and financial cooperation between two economies that are highly interdependent (Hamilton, 2014; Pollack & Shaffer, 2001; Egan, 2005).

The progressive elimination of tariff barriers has shifted attention. The import-weighted tariffs have been reduced over time to less than 4% (with many tariff lines being zero), so the issue in many traditional regional free trade agreements (FTAs) is no longer tariffs, but rather technical barriers to trade (TBTs). These barriers consist of standards, technical regulations and conformity assessment procedures that have emerged in different administrative bodies and standardisation organisations at domestic, regional and international levels, often independently from one another, thereby creating duplicative costs of compliance (see Box 3.1). Standards are usually developed by private standards development organisations (SDOs), to avoid redundant variety (e.g. of components), for compatibility, but also to ensure the health, safety and quality of products, as well as

processes, production methods and other related technical matters. They can define a specific design or performance characteristics, determine performance criteria, or provide guidelines and definitions (NRC, 1995).

Standards are formally voluntary when adopted, but can acquire legal effect when ‘referenced’ in legislation, or may become dominant in the marketplace through widespread acceptance. Conformity assessment methods and procedures are used to assess whether a particular material, product, or process conforms to a specified standard. Conformity assessment bodies, which can be public or private entities, include testing, certification and inspection organisations. When technical standards are integrated into regulatory requirements, they can create or enhance technical barriers to trade, due to differences in performance, design, testing, and certification measures. Since these requirements are indispensable for entering their respective markets, it can lead to extra costs as the imported product has to be tested and certified acceptable or safe, or, in other words, meet specific safety, health, environment and consumer (SHEC) protection objectives.

TBTs do not concern the level and scope of regulation, i.e. SHEC objectives, but rather reduce the costs of given regulatory differences of instruments that impact market access. Such differences have become a central issue in the ongoing US-EU trade negotiations, so that standards and conformity assessment practices on both sides of the Atlantic remain one of the greatest challenges in TTIP. Removing or reducing the cost of such transatlantic TBTs is likely to result in possibly significant economic gains – which may vary by sector – but this does not mean that regulatory objectives in terms of levels of SHEC protection will diminish, as asserted – without any justification – in social and conventional media as well as stakeholder meetings. At issue are differences in instruments, methods or testing to meet given, specified objectives.

The chapter proceeds in section 2 to establish the significance of TBTs that stem from standards, testing and conformity assessment practices for the costs of international trade and the particular challenges of resolving them. The prior transatlantic efforts to address them are considered in section 3 and the scope of the TTIP TBT approach is addressed in section 4. Section 5 outlines the standards regimes and their respective legal and policy differences in order to illustrate the areas of contention for the ongoing TTIP negotiations. Section 6 shows how these regime distinctions impact bilateral trade

and section 7 focuses on the current state of negotiations in TTIP. The chapter concludes by elucidating the prospects and implications for achieving some form of agreement on TBT issues.

Box 3.1 TBT definitions for understanding TTIP negotiations

A technical regulation lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method (Annex 1, TBT Agreement).

A standard is a document approved by a recognised body that provides for common and repeated use, rules, guidelines, or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method (Annex 1, TBT Agreement). A technical standard is written by standard bodies and is always voluntary, whether in the US, the EU or elsewhere. This suggests that standards should not normally be regarded as a TBT. Although this is often correct, there are instances where different (voluntary) standards amount to barriers (e.g. no compatibility, requirements for insurance, etc.), that is, they raise the costs of effective market access. Most standards written by standard bodies are purely market-driven, for reasons which market players, including consumers, are expected to appreciate. The principal reasons why standards are advantageous (see Pelkmans & Costello, 1991; Swann, 2010; Blind, 2013) include:

i) well-defined information on measures, weights, or a host of other technical ‘codes’ which reduce the costs of information for engineers, designers, etc., whilst avoiding confusing differences for technicians;

ii) well-defined codification of certain quality features of goods (including intermediate goods, parts, components) – quality can of course include aspects of goods serving safety, health of consumers or workers, environment and/or consumer protection (and often will because markets appreciate it);

iii) agreed specifications needed for interoperability or compatibility of intermediate or final products; and

iv) agreed ways to reduce clear redundancy of variety in order to facilitate economies of scale.

Industry spends resources to write standards, because they want markets to function better and codify new technologies or production solutions, while also allowing variety to ensure competition, innovation and coordination across firms, sectors and supply chains.

An international standard (or guide or recommendation, as the World Trade Organization specifies) is widely understood as a standard issued by world bodies such as the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC) and the International Telecommunication Union (ITU), except in ICT where other consortia often play a role. The WTO TBT Committee has defined a set of six principles for determining whether a standard is ‘international’: openness, transparency, impartiality and consensus, relevance and effectiveness, coherence and the development dimension (see, e.g. USTR (2014), 2014 Report on TBTs, pp. 25-26).

Conformity assessment procedures are any procedure(s) used, directly or indirectly, to determine that relevant requirements in technical regulations or standards are fulfilled (Annex 1, TBT Agreement).