US and Europe: syncing up standards

Products such as cars have different standards in the US and Europe. These amount to trade barriers that should fall.

Let's hop into a VW Passat. But which one? The one made for the US has different lights, wipers, and mirrors from the one made for Europe. It has passed a separate crash test. Same model, different cars – and both are more expensive for it.

This is just one of many examples of how mismatched rules and standards between the US and Europe add cost and production complications to products and services sold in both regions.

For more than a decade, politicians on both sides of the Atlantic have been talking about harmonizing standards and have attempted baby steps in this direction. But they're not even close to walking yet.

This idea needs to be held firmly by the hand and guided. That could happen if the US and the European Union (EU) agree on a timetable and road map to remove nontariff barriers in dozens of sectors, from biofuels to banking.

Such a commitment is being vigorously pushed by German Chancellor Angela Merkel. Germany holds the rotating presidency of the EU, and Ms. Merkel is intent on moving this idea through at the upcoming US-EU summit in Washington on April 30. It's encouraging that the White House also appears ready to commit.

The transatlantic economy is already deeply established – and huge. The commercial relationship between the US and Europe accounts for three-fifths of the global economy.

But going even deeper by harmonizing rules between the world's two richest regions – some call it creating a single US-EU market – makes sense in the face of increased competition from China and India. It would boost US and European economic growth. It would lead to commercial efficiency and lower costs for consumers. And on the political front, it would shore up a transatlantic relationship that has suffered under the strain of the war in Iraq.

The obstacles will be difficult to climb over, even if political leaders lace up their hiking boots.

Regulatory coordination requires cooperation between the European Parliament and the US Congress. Europeans and Americans also have different values, especially regarding risk. That's no small factor when it comes to, say, regulating genetically modified foods.

And harmonization could become very complicated. Back to the car example: The supposedly simple task of using the same standards for headlights could involve changing road signs. The signs are at lower or higher heights, depending on whether it's Europe or the US, and headlights are made to shine either lower or higher.

But here's how to get past the feeling that this project is just too big to tackle. First, take heart in what's been done – for instance, the recent agreement to open up transatlantic commerical air traffic, a deal expected to be signed at the summit. Second, pick target sectors and study the costs of barriers in those areas – and the benefits (and feasibility) of removing them.

Then start harmonizing the easier stuff, such as accounting, or newer, unregulated products, such as nanotechnology.

Not everything will be doable. But the US and EU need a goal and a plan. They can accomplish at least this much at their summit at the end of the month

You've read  of  free articles. Subscribe to continue.
QR Code to US and Europe: syncing up standards
Read this article in
QR Code to Subscription page
Start your subscription today