TTIP: EU exporters worry about US harmonisation issues

On 15 March, the TTIP advisory board for Germany's economy minister Sigmar Gabriel discussed this problem.

According to information obtained by the Berlin-based newsroom Correctiv.org, Gabriel was informed about the issue shortly afterwards and thought it was “highly interesting”.

It became clear to the German ministry that instead of one central testing and certifying organisation like the German TUV, in the US there are 17 so-called Nationally Recognised Testing Laboratories (NRTLs) issuing technical certifications.

Moreover, a certificate from one of these 17 laboratories does not automatically mean the product in question may actually go in use – this decision belongs to local authorities. This way it might be the local sheriff or the fire marshal deciding whether a grinder may eventually go into industrial use.

It is not only the certificates that are different, but the norms as well.

Volker Treier of the German Chambers of Commerce gives an example: “For machinery there is a different colour regulation in every US state for power, aerial and water cables, which makes it costly to adapt for exporting companies.”

If a European manufacturer wants to export machinery in the US, it has to dig deep to pay for additional certifications. Products have to be tested again on the other side of the Atlantic.

These barriers should be eliminated with TTIP – at least this is one of the main arguments European governments try to win small and medium enterprises with (SMEs) for the trade agreement.

But as mentioned above, US negotiators are not able to control these regulatory issues. The 17 NRTLs are accredited by a federal agency - Occupational Safety and Health Administration - but they are not under its control.

While an EU regulation provides consistency and harmonisation among the national accreditation bodies across the member states, there is no such comprehensive guideline in the US.

Some of the US regulations on testing, verifying and authorising an engineering product were taken on a federal level, but many of these are state or local regulatory provisions defined by local NRTLs.

Commission's concern

A major problem with these testing laboratories (NRTLs) is that they do not recognise each other's test results.

This means that if a European manufacturer certifies its product at one of these NRTLs this does not automatically mean that it can be sold or put into operation in every federal state.

This mainly concerns electronic machinery, but the lack of an internal market in the US poses a costly obstacle for European exports in other areas too.

This fragmented market has been causing serious concerns for European manufacturers for decades.

An internal meeting report of the European Commission obtained by Correctiv quotes the concerns of the European engineering industry: “They noted strong divergences in regulatory approach, especially regarding liability issues.

“Their main concerns are the local element (local inspections and regulations), complexity of the US regulatory system, tariffs and certification its related costs – for instance number of audits by NRTLs.”

The meeting report concludes: “The US certification industry is a key player; It will prove difficult to change the status quo.”

The German Association for Small and Medium-sized Businesses representing over 270.000 German businesses is also concerned about the issue.

“Mutual recognition of norms is a one-way road,” says the association's president Mario Ohoven, who fears a distortion of competition causing disadvantages for the European industry.

While for US companies exporting to the EU there is a unitary EU guideline for standards and norms, European SMEs have to find their way in the US through the above mentioned maze of norms and certificates.

The German Electrical and Electronic Manufacturers Association suggests that the US should recognise the internationally accepted ISO and IEC standards. Big companies like Siemens support this claim.

Up to now the US is one of the countries adopting only a few of the international norms. This explains why the issue of standards and norms plays such a crucial role in the EU-US free trade agreement negotiations.

Justus von Daniels and Marta Orosz are reporters with the non-profit newsroom correctiv.org. This text is published in cooperation with correctiv.org