10 Reasons why the Transatlantic and Trans-Pacific Partnerships are Good for America
3. TTIP Will Lead to Greater Compatibility and Less Regulations
The biggest payoff will come if the EU and the US can make significant progress with regard to regulatory compatibility and coordination. At the moment, many EU and US standards are comparable but not mutually recognized. This leads to increased costs on both sides of the Atlantic; for instance many products have to go through safety tests twice in order to be certified in both regions. Better compatibility would lead to huge savings and an increase in trade.
Auto safety is one area where the US and EU can reduce unnecessary non tariff barriers. The EU and the US do not recognize many of each other’s safety regulations. For example, the US and EU require different models of crash test dummies for certain auto safety tests, even though the dummies are essentially the same size and ultimately accomplish the same goal. For carmakers, this means that they have to do the same test twice – which adds greatly to the cost of the cars. A Third Way study finds that different regulations on auto safety standards end up adding about 25% to the costs of American cars sold in the EU.
