Ref. Ares(2016)323074 - 21/01/2016
ACEA Position Paper on
TECHNICAL BARRIERS
TO TRADE
TOWARDS A WORLDWIDE SYSTEM OF
CERTIFICATION FOR WHOLE VEHICLES,
SERIAL AND AFTERSALES PARTS
NOVEMBER 2015
EXECUTIVE SUMMARY
Technical barriers to trade are a phenomenon that increasingly hampers worldwide automobile
trade. In fact, market-specific regulatory systems and requirements do not result in higher safety
standards on the respective market (which is frequently cited as the reason for introducing them),
but instead merely increase costs and require more efforts from vehicle manufacturers, suppliers
and customers. Therefore, ACEA is calling for necessary reforms of the UN framework as well as
for the introduction of a globally harmonised homologation and certification scheme within a UN
framework.
Whole vehicle homologation: work on the UN International Whole Vehicle Type Approval
(IWVTA) should continue to receive top-priority support.
Serial parts and aftersales parts: the aim should be to establish a globally harmonised
certification scheme within a UN framework, based on the condition that type approval of
a whole vehicle includes all OEM serial parts and aftersales parts, and that any additional
certification is not necessary.
Remanufactured parts: in today’s automotive industry, remanufacturing is considered an
integral and vital part of the overall process to provide a sustainable and cost-effective
supply of past model service parts. However, some countries still forbid the import of
remanufactured parts, it is important to remove these barriers.
Mutual recognition: efforts towards mutual recognition of existing regulations should be
supported, provided that this does not lead to a lowering of existing UN standards.
PREFACE: THE ‘ONE WORLD, ONE REGULATION’ CONCEPT
The main purpose of regulatory standards is to ensure the proper safety and environmental
performance of products.1 It is a state’s key role to ensure that consumers are highly protected. The
framework of the United Nations Economic Commission for Europe, based in Geneva and founded
in 1947, with its UNECE World Forum for Harmonization of Vehicle Regulations (WP.29), is widely
accepted as the most suitable instrument to ensure high safety and environmental standards
combined with a high degree of liability for automakers and suppliers. The European automotive
1 Caroline Freund and Sarah Oliver: Gains from Harmonizing US and EU Auto Regulations under the Transatlantic Trade
and Investment Partnership. Peterson Institute for Economic Study, Policy Brief 15-10, June 2015, p2.
ACEA Position Paper on Technical Barriers to Trade – November 2015
1
industry has taken its responsibility seriously and has continuously improved its products through
technical innovations. Because of the high standards, and liability for industry, many non-European
countries joined the WP.29 and its central UN 1958 Agreement.
The UN 1958 Agreement is the most comprehensive agreement on technical regulations for
automobiles to date and it is the most influential global one as its regulations were adopted by
many contracting parties all over the world or were used as a model for national legislation by a
large number of other countries. It establishes a set of uniform standards for vehicles and their
components relating to safety, environment, energy, and antitheft requirements. By now, the
agreement covers 135 single regulations.2 The UN International Whole Vehicle Type Approval
(IWVTA) regulation is planned to be finalised by 2017. An integral part of the regulatory system is
the type approval method, by which a country’s approval authority and/or an accredited test
institute certifies the product according to certain testing methods.
In order to open the successful UN system for countries using self-certification instead of type
approval, the UN introduced a second key agreement, the 1998 agreement. It established a process
for defining new global technical regulations (GTR) not related to type approval. The United States
joined the agreement, given that they are not a contracting party to the 1958 agreement. In the
US, automakers certify their products themselves to conform to the US Federal Motor Vehicle
Safety Standards (FMVSS self-certification method), while certification for the vehicle models is
required for environmental issues (EPA/CARB). The main difference to the 1958 agreement is that
the 1998 agreement does not provide for the mutual recognition of approval, because approval
cannot be granted on the basis of global technical regulations.
However, also countries using self-certification can become a contracting party to the 1958
agreement and apply UN regulations. The only obligation in such a case is that approval certificates
are accepted as proof that the vehicle system or part complies with the legislation (if requested).
In a country using self-certification, a manufacturer has to ‘self-certify’ that its vehicle system or
part complies with national legislation. If that same country decides to apply a particular UN
regulation, the manufacturer could ‘self-certify’ that its vehicle system/part complies with the UN
regulation and could provide the type approval certificate as additional proof, if needed.
Furthermore, even if a country uses self-certification on its own territory, this does not prevent it
from issuing type approvals related to any UN regulations it applies (for use of such approvals in
2 UN R136 was adopted in June 2015 and is currently in the notification phase at the UN Secretary-General in New York.
ACEA Position Paper on Technical Barriers to Trade – November 2015
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other contracting parties).
TECHNICAL BARRIERS TO TRADE
Hence, a worldwide framework is provided by these two agreements. But some obstacles have
hindered the successful adoption of the ‘one world, one regulation’ concept: each regulation of the
1958 and the 1998 agreements has to be adopted by the national governments or has to be
transposed into national law. Unfortunately, there has been a significant increase in country-
specific regulatory requirements in recent years, both in countries in and outside of the UN
agreement. Depending on the individual country, these requirements reach from labeling or
registration obligations to certification and even completely different testing methods. In some
cases the UN specific marking system called ‘e-marking’ is not accepted any more.3 Until a few
years ago, the focus was largely on UN, FMVSS and the China Compulsory Certification (CCC).
Other schemes have been introduced in recent years, such as INMETRO (Brazil’s National Institute
of Metrology, Quality and Technology), KC (Korea Certification for South Korea) and EAC
(EurAsian Community for Russia, Kazakhstan and Belarus). While Brazil is not a signatory of the
1958 and 1998 agreements, both South Korea and Russia are.
Some countries establish mixed forms in their respective systems. The rising number of country-
specific certifications also creates challenges when it comes to physical marking, some parts (like
the rear number plate lamps) are so small that not all the different country-specific certification
marks fit onto them. Furthermore, physical marking (eg stamping on pistons) can alter parts in such
a way that the physical properties and the functionality of the components have to be modified.
Beside these challenges related to extra certifications (for all kind of parts), approvals (for whole
vehicles), labeling, registration, or marking requirements, some countries require additional
procedures for conformity assessment. These procedures can vary from additional paperwork to
costly production audits – in case which the usual certificate of conformity is not accepted, stating
compliance with community legislation by the automaker itself. Some countries define the system
for their market-specific tests in a way that no clear interpretation regarding the scope is possible,
and they do not provide enough lead time to start the test. Last but not least, a rising number of
countries restrict or ban the import of remanufactured parts4, which unnecessarily restricts market
3 The UN Regulations have their own marking scheme known as E-marking, which is fully accepted in the EC (EC
regulations provide e-marking).
4 A remanufactured part fulfils a function which is at least equivalent compared to the original part.
ACEA Position Paper on Technical Barriers to Trade – November 2015
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opportunities for the automotive industry.
Overview:technical barriers to trade
Definition
Countries
ACEA position
Countries concerned should accept
Approval of vehicles, certification
international standards and
of parts, components following
Brazil,
Certification /
regulations, sign and adopt UN 1958
national specific tests, in own
China,
type Approval
a/o 1998 Agreement. Promote the
national laboratories or
Indonesia
finalisation of the International
institutes.
Whole Vehicle Type Approval.
Brazil,
China,
Physical labeling of whole
Labeling,
Indonesia,
Accept the e-marking scheme based
vehicle, parts and components
registration
Saudi
on the UN Regulations.
with national specific label.
Arabia,
South Korea
Additional requirements besides
the OEM‘s Certificate of
Conformity
Conformity (CoC) in order to
Elimination of regulation, accept the
Argentina,
assessment
receive the import licence,
established Certificate of
South Korea
procedures
varying from extra formulas up
Conformity (CoC).
to cost-intensive production
audits.
Brazil,
Remanufactured products are high-
Colombia,
Remanufacturi
quality products and have to be
Import restriction or ban on
China,
ng restriction
distinguished from used parts.
remanufactured parts.
Ecuador,
or ban
Therefore, imports and use should
India,
be allowed without exception.
Turky
In general, market-specific standards do not result in higher safety standards on the respective
market - which is frequently cited as the reason for introducing them. The potential objective of
promoting localised production at national (state) level is not achieved either, because both locally
made products and imported ones are subject to certification, registration, etc.
Depending on the national requirements the magnitude of these additional costs varies
significantly, and comprehensible cost estimations are scarce.
ACEA Position Paper on Technical Barriers to Trade – November 2015
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A study conducted by the Peterson Institute for International Economics5, undertaken in the
framework of the EU-US free trade negotiations (TTIP), analysed the benefits of joining the UN
1958 Agreement or applying regulatory convergence of equivalent effect. The study concluded that
improved regulatory convergence in the automobile sector could achieve the following benefits
(among others):
-
reduced costs (production, R&D, certification, better inventory management, etc.)
-
more efficient allocation of resources (for instance, more resources can be used directly for
R&D instead of double testing with no safety or environmental advantage)
-
benefits for consumers (lower prices, better choice, latest technologies available)
-
increase in trade with the other 58 agreement members and increased foreign direct
investment ( around 20% increase in trade)
These findings also give an indication of possible benefits should non-tariff barriers be reduced or
eliminated.
ACEA POSITION AND RECOMMENDATION
Free market access, harmonised global regulations and mutual recognition in the automotive
market (based on international standards and technical regulations), can generate savings in
technical resources, which can have better use elsewhere. For instance, to produce better, cleaner
and safer vehicles, parts and components.6 Moreover, joining the UN 1958 agreement has boosted
the international trade of all contracting parties.
Without doubt, the UN 1958 Agreement is the most important agreement on technical
prescriptions for automobiles to date. Regulatory convergence would decrease production costs,
reduce price discrimination across markets, and allow for improved market offering. But still, the
UN system can be improved to strengthen the ‘one world, one regulation’ concept even more.
In this context, the EU automotive industry calls for the following: recognition of UN regulations at
international level should continue to be promoted with top-priority. The World Forum for
5 Peterson Institute, June 2015, Gains from Harmonizing US and EU Auto Regulations under the Transatlantic Trade and
Investment Partnership.
6 See also OICA, http://www.oica.net/category/worldwide-harmonization/.
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Harmonization of Vehicle Regulations (WP.29) has begun reforming the UN 1958 Agreement7, this
is a step in the right direction and should be accelerated in order to make acceptance of the UN
framework more attractive for future signatories.8 The major reform topics are:
A contracting party applying a UN regulation may issue type-approvals pursuant to earlier
versions of the UN regulation (ie pursuant to preceding series of amendments or the
original version of the UN regulation).
Implementation of the new scheme for the International Whole Vehicle Type Approval
(IWVTA) via draft UN regulation no. O.
Introduction of the possibility of virtual testing (if so foreseen in the specific UN
regulation).
Introduction of the possibility to grant exemption approvals for new technologies not
meeting all requirements of a UN regulation (but safeguarding an equivalent level of
safety and environmental protection).
Standardisation of type-approval documentation via the obligation to include information
documents in UN regulations.
Establishing a UN ‘Database for the Exchange of Type Approval documentation’ with the
marking ‘unique identifier’ between all contracting parties. The aim is to simplify and
harmonise the complex type-approval marking procedures.
Modifying the voting conditions for the adoption of new UN Regulations or their
amendments to existing UN regulations (consideration of 4/5 majority instead of 2/3
majority). It is anticipated that if the majority voting threshold is raised to a higher ratio,
the chances to attract new contracting parties such as Brazil, India and the ASEAN
countries would become more realistic.
Strengthening the current rules with the aim to improve the functioning of the type
approval procedures and the conditions for their mutual recognition (ie certification and
conformity of production procedures, the tasks, responsibilities and competences of
involved parties).
It is of eminent importance that the contracting parties of the 1958 and 1998 agreements are
motivated to adopt the international regulations and to transpose them into national law. Besides
that, the automotive industry welcomes a proactive WP.29, consulting and assisting countries
which have not yet signed the UN agreements, to develop efficient regulatory schemes according
7 Also “The internal "WP.29 Regulation Development Process" and the process of implementation of GTRs into national
/ regional law should be improved”. See Draft of the “Trilateral White Paper: Improvement in the Implementation of the
1998 Global Agreement”, June 2015, of EU, USA and Japan.
8 See 1st draft of UN 1958 modifications, http://www.unece.org/fileadmin/DAM/trans/doc/2014/itc/ECE-TRANS-2014-
12e.pdf.
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to the requirements defined in the UN regulations or at least in line with them.
With respect to specific regulatory challenges and technical barriers to trade right now, the
European automotive industry calls for the following:
On whole vehicle homologation: work on the IWVTA should continue to receive top-
priority support.
On serial parts and aftersales parts: the aim should be a globally harmonised certification
scheme within a UN framework, based on the condition that type approval of a whole
vehicle includes all OEM serial parts and aftersales parts, and that any additional
certification is not necessary. A specific challenge lies in the aftermarket, where additional
costs of certification, registration, documentation, marking, etc. are accompanied by
relatively small quantities, over which these costs have to be spread. In very many cases
this is not economically feasible and ultimately leads to higher consumer prices, without
improving the quality for customers. These problems are exacerbated by the requirements
of retrospective legislation which apply to the parts supply not only for new vehicles, but
also for older vehicle models that are no longer produced. Although the specific legislation
sometimes covers only individual replacement parts or groups of parts (eg filters), it may
have far-reaching consequences on series production. Since in production usually no
distinction is made between a series part and a replacement part, it may become necessary
to adapt the entire assembly line. It is essential that rules for exceptions (eg for small
quantities) can continue to be used and certain general conditions (no retroactive
applicability, sufficient transitional periods, etc) are applied when formulating regulations.
On remanufactured parts: in today’s automotive industry, remanufacturing is considered
an integral and vital part of the overall process to provide a sustainable and cost-effective
supply of past model service parts. Important arguments for remanufactured parts are:
-
At least equivalent function compared to original parts;
-
Cost efficiency for both the manufacturer and the consumer;
-
Guaranteed availability even after volume production has ended; and
-
Reduced CO2 emissions as well as energy consumption in the production process
by taking advantage of the residual value of material and energy preserved in
defunct parts. Up to 85% of the energy and raw material that was put into the
manufacture of the original part can be reused.9 It is absolutely vital to promote
9 MIT study 2011: Massachusetts Institute of Technology, Remanufacturing and Energy Savings. Available at:
http://web.mit.edu/ebm/www/Publications/reman-est.pdf.
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and strengthen remanufacturing as an equivalent source of service parts rather
than treating it as a second-rate solution.
On mutual recognition: efforts towards mutual recognition of existing regulations should
be supported, provided that this does not lead to a lowering of existing UN standards.
Some progress has been made, for example when looking at the case of the Canadian
Motor Vehicle Safety Standards (CMVSS) versus UN Regulations. The current discussions
on mutual recognition through the Transatlantic Trade and Investment Partnership (TTIP)
between the US and the EU might also yield some benefits.
ACEA is more than willing to provide constructive support to policy decisions and standards
institutions. Moreover, the European automobile manufacturers welcome all initiatives that
improve international market access by eliminating trade barriers.
APPENDIX
List of Contracting Parties UN 1958 and 1998 Agreement:
http://www.unece.org/fileadmin/DAM/trans/doc/2015/wp29/ECE-TRANS-WP29-2015-040e.pdf
ABOUT ACEA
ACEA’s members are BMW Group, DAF Trucks, Daimler, Fiat Chrysler Automobiles,
Ford of Europe, Hyundai Motor Europe, Iveco, Jaguar Land Rover, Opel Group, PSA
Peugeot Citroën, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars,
Volvo Group. More information can be found on
www.acea.be.
ABOUT THE EU AUTOMOBILE INDUSTRY
Some 12.1 million people - or 5.6% of the EU employed population - work in the
sector.
The 3.1 million jobs in automotive manufacturing represent 10.4% of EU's
ACEA Position Paper on Technical Barriers to Trade – November 2015
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manufacturing employment.
Motor vehicles account for €396 billion in tax contribution in the EU15.
The sector is also a key driver of knowledge and innovation, representing
Europe's largest private contributor to R&D, with €41.5 billion invested annually.
European Automobile Manufacturers' Association – ACEA
Avenue des Nerviens 85 | B-1040 Brussels | www.acea.be
T +32 2 732 55 50 | M +32 485 886 647 | F +32 738 73 10 | xxxx@xxxx.xx | @ACEA_eu
ACEA Position Paper on Technical Barriers to Trade – November 2015
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