President Obama Announces Launch of US-EU Trade Negotiations

TIA Supports a Free Trade Agreement that Addresses Regulatory Alignment

February 15, 2013 | President Barack Obama announced during his State of the Union address on February 12, 2013 that the Administration intends to launch negotiations on the Transatlantic Trade and Investment Partnership (T-TIP) with the European Union (EU).

T-TIP would promote U.S international competitiveness, jobs and growth by boosting the more than 13 million American and European jobs supported by transatlantic trade and investment.  It would likely include a chapter on regulatory alignment to cut cost differences in regulations and standards by promoting greater compatibility, transparency and cooperation.

The announcement coincides with the release of a final report by the United States-European Union High Level Working Group on Jobs and Growth (HLWG), which was tasked at the U.S.-EU Summit in November 2011 with identifying policies and measures to increase U.S.-EU trade and investment. 

In regards to regulatory alignment, the HLWG recommends:

  • Cross-cutting disciplines on regulatory coherence and transparency for the development and implementation of efficient, cost-effective, and more compatible regulations for goods and services, including early consultations on significant regulations, use of impact assessments, periodic review of existing regulatory measures, and application of good regulatory practices.

  • Provisions or annexes containing additional commitments or steps aimed at promoting regulatory compatibility in specific, mutually agreed goods and services sectors, with the objective of reducing costs stemming from regulatory differences in specific sectors, including consideration of approaches relating to regulatory harmonization, equivalence, or mutual recognition, where appropriate.

  • A framework for identifying opportunities for and guiding future regulatory cooperation, including provisions that provide an institutional basis for future progress.

“The Toy Industry Association (TIA) is generally supportive of efforts between the U.S. and EU to launch comprehensive free trade agreement negotiations,” said Joan Lawrence, TIA vice president of standards and government affairs. “However, in order to be of any benefit to the U.S. and European toy industries, a free trade agreement must comprehensively address regulatory divergences that present significant barriers for companies selling in both markets.  Additionally, the success of any regulatory cooperation depends on addressing these barriers at a technical, detailed level.”

Complementing these trade agreement discussions, the U.S. standard-setting organization ANSI and EU’s CEN (among others) have agreed to intensify collaboration for future standards alignment. ASTM is closely monitoring this partnership, as the standards setting organization is also looking to work with CEN to promote similar objectives. Such an agreement could positively impact future alignment between European and U.S. toy safety standards.  

TIA has long worked with both the U.S. and EU governments, as well as through the relevant standards processes, to promote greater standards alignment – particularly relating to the U.S. toy safety standard, ASTM F963 and the European toy safety standard, EN 71. In order to sell in both markets, companies often have to spend significant sums on duplicative testing to demonstrate compliance and/or invest in design and/or manufacturing changes in order to meet both sets of requirements, or forego trade. These costs to the toy industry add up to an estimated U.S. $3 billion annually.