Please find below the Orgalim priorities for Working Group 10 - Global Trade Challenges
Advance cooperation on conformity assessments
The reduction of non-tariff barriers is vital, especially for our industries' many small and medium-sized enterprises. For example, our products for the US market cost between 5 and 18% more than a comparable product for the EU market, because they must be specifically manufactured to meet the requirements of the US market. Greater regulatory cooperation should, therefore, be promoted, with the goal of harmonising diverging technical legislation. Having a harmonised and reliable set of relevant technical legislation is essential to ensure smooth trading between the EU and the US. This is even more important for new technology areas, for which regulatory frameworks are being developed.
Consequently, we call upon the EU and the US to conclude the negotiations on a trade agreement on conformity assessment as soon as possible. The overarching principle regarding technical standards and market access conditions is no mutual recognition without prior harmonisation. The harmonisation of technical product requirements is the fundamental precondition for the abolition of the existing technical trade barriers on both sides of the Atlantic. The rule here should be: ‘One standard, one test, accepted everywhere’. Only after successful harmonisation should mutual recognition be considered. Harmonisation should be done at the level of the International Organisation for Standardisation (ISO), the International Electrotechnical Commission (IEC) and the International Telecommunication Union (ITU).
The mutual recognition of the results of conformity assessments should be promoted in EU-US negotiations for a Mutual Recognition Agreement (MRA). The EU-Canada Comprehensive Economic and Trade Agreement (CETA) may serve as a template for future discussions, while the EU-US MRA for inspections of manufacturing sites for certain human medicines3 shows that sectorial regulatory cooperation is possible. The mutual recognition of test and conformity assessment results would facilitate market access, limiting duplication and allowing better use of resources for both parties.
Mutual recognition is an instrument that can be used in three different ways:
1. Mutual accreditation of conformity assessment bodies: When third party involvement is required, the mutual accreditation of conformity assessment bodies is helpful for manufacturers, as the conformity assessment body is situated in the same region as the manufacturer. The accreditation of a conformity assessment body by the authorities in another region should be based on the rules of the International Laboratory Accreditation Cooperation (ILAC), the International Accreditation Forum (IAF) and the International Organisation for Standardisation (ISO 17000 standard series). This model of mutual recognition already exists in CETA and leads to easier certification processes by reducing language barriers, lowering the distance between manufacturer and certification body, and by enhancing the possibility to obtain certification for both regions from one single certification body.
2. Bilateral mutual recognition of product test results and certificates by third party bodies in the EU and the US: The prerequisite for the bilateral mutual recognition of product test results and certificates by third party bodies are identical requirements for products and conformity assessment procedures in both regions. Where third party involvement is required in the electrical sector, the International Electrotechnical Commission Certification Body Scheme (IECEE CB Scheme), which has been established internationally based upon Electrotechnical Commission Certification standards, should be used.
3. The recognition of test results among Nationally Recognised Testing Laboratories (NRTLs): Mutual recognition of existing mandatory third party certification and the associated conformity marks must be guaranteed among NRTLs. In our view, the US Administration should establish an NRTL mutual recognition system with a uniform NRTL label, which would provide for the full and mandatory mutual recognition of test reports and labels between NRTLs in the US and prevent duplicate – and thus unnecessary – product testing. This mirrors what happens in the EU and would mitigate de facto monopolistic behaviour from some US certification providers.
Eliminate tariffs on industrial products
Market access should be enhanced for all industrial sectors represented by Orgalim, and industrial tariffs between the EU and the US should be eliminated in the long term. Although these tariffs are relatively low, their elimination would lead to significant savings for our industry’s clients and customers, considering that the US is our biggest export market. Therefore, we call upon both sides to finalise the negotiations on a trade agreement on the elimination of industrial tariffs as soon as possible.
The preferential rules of origin should be in line with other existing Free Trade Agreements so that SMEs can reap the full benefit of the EU-US agreement. For our sectors, we support Rules of Origin entailing a change of Harmonised System heading or subheading (for example, manufacture from materials of any heading, except that of the product and of heading or subheading YYY) or, alternatively, the value-added rule (for example, products in which the value of all the materials used does not exceed 50% of the price of the product).
Finding a permanent solution to the Airbus-Boeing dispute
The Airbus-Boeing dispute has been a source of significant conflict between the EU and the US. Even though the resulting tariffs are World Trade Organisation (WTO)-compliant, they impacted the technology sector – which is unconnected to aircraft subsidies – on both sides of the Atlantic. For example, until the suspension of tariffs, manufacturers of certain tools, induction furnaces and special excavators had been subject to US retaliatory tariffs.
In this context, Orgalim welcomes the 15 June agreement on the Airbus-Boeing dispute suspending tariffs for five years and reiterates our call for a permanent solution.
Scrapping steel and aluminium tariffs
While there is progress on the Airbus-Boeing dispute, the US 232 tariffs on steel and aluminium, in place since July 2018, and the related EU counter-tariffs are still in place. In this context, we support the European Commission’s efforts to find a negotiated solution and we welcome the agreement reached on 15 June to set up a working group to work on the steel tariffs, aiming to resolve this situation. Orgalim advocates for a permanent solution scrapping the tariffs.
Support EU-US cooperation at WTO level
The EU and the US have agreed to work cooperatively on efforts to achieve meaningful World Trade Organisation (WTO) reform. Orgalim supports these joint efforts, in particular on (i) fixing the Dispute Settlement Body; (ii) tackling subsidies, forced technology transfers, state-owned enterprises (SOEs) and self-declaration as a developing country; and (iii) supporting relevant trade negotiations at WTO level such as the e-commerce Agreement and the expansion of the Information Technology Agreement (ITA). We also believe that the EU and the US should cooperate on conformity assessment and international technical standards in the framework of the WTO, for example through the WTO Technical Barriers to Trade Committee.
You can download our priorities for future EU-US trade relations further below.