Both the EU & US automotive economies account for nearly half of the world’s automotive GDP and represent 35% of global automotive sales.

EU & US total trade in automotive parts and accessories (2013)

$9.61bn (+2.5% 2012)

EU export figures = $7.5bn (+3%)

US export figures = $2.07bn (+0.4%)

The numbers

  • Anticipated gains deriving from a break-down of bilateral tariffs and NTBs
  • US tariffs are approx. 2.5%, EU tariff rates are approx. 8%.
  • In 2011, $1.7 billion in tariffs was paid bilaterally.
  • Main costs come from divergent regulations and standards, relating to emissions and safety, (NTBs), amounting to an estimated $12.8bn.Automotive regulations add an average cost of 26.5% to bilateral trade.
  • According to the Centre for Economic Research (CEPR) study:

The elimination of tariffs and 10% of existing EU & US NTBs would:
– Increase EU vehicle and parts exports to the US by 71%
– Increase US vehicles and parts exports to the EU by 207%

The elimination of tariffs and 25% of existing EU & US NTBs would:
– Increase EU vehicle and parts exports to the US by 149%
– Increase US vehicles and parts exports to the EU by 347%

Existing and Future Regulations

– Support Mutual Recognition, provided that safety levels are not lowered, environmental protection and added-value are maintained

– Support continued harmonisation in other cases

Future regulations

Promoting a strong worldwide system of future harmonised regulation, building upon the efficacy and functionality of the existing GTR process under the UN 1998 Agreement

CLEPA Position

A recent EU impact assessment report found that EU vehicle and parts exports to the U.S. would increase by 149%, and U.S. vehicle and parts exports to the EU would increase by 347%, ten years after the implementation of a U.S.-EU agreement to eliminate tariffs and reduce 25% of existing non-tariff barriers. A successful TTIP will bring about economic gains, enhanced job creation, innovation, and investor confidence. Specifically, CLEPA supports a TTIP that:

Attains regulatory convergence while preserving high standards of vehicle safety, environmental performance and innovation. The EU and U.S. automotive industries face regulatory costs in the region of $12.8bn. Automotive regulations add an average cost of 26.5% to US and EU trade. It is estimated that a reduction of 25% ($3.2bn) of automotive regulatory costs would nearly double the savings that would result from 100% elimination of bilateral automotive tariffs under TTIP.

Promotes opportunities for a strong worldwide system of harmonised regulations, making the existing UN International Agreement (the 1998 Agreement) more efficient. Together the U.S. and the EU represent a significant market for motor vehicles. A focus on the harmonisation of future regulations will eliminate unnecessary regulatory burdens worldwide.

Eliminates tariffs, reciprocally, and secures 100% liberalisation with relatively short phase-out periods. EU tariff rates applied to automotive component parts are as high as 8%; US tariffs are 2-3%. In 2011, $1.7 bn in tariffs was spent on bilateral automotive exports. Furthermore, the simplification of customs procedures, cooperation on public procurement,   dual use items and export controls would provide a significant boost for transatlantic trade.

Addresses the gaps between our respective position on intellectual property protection and Rules of Origin.

Commands a strong and sustained political commitment, at the highest levels of government and regulatory authorities, allowing for transparency and regular consultation with automotive stakeholders.

A robust TTIP would send a message to other trading partners globally, that important economic benefits can truly be derived from trade liberalisation, when partners are free from both tariff duties and technical barriers.