Ford Wants U.S.-E.U. Free Trade Agreement, Mutual Vehicle Standards
Talk about a company’s dream come true: Ford and its fellow U.S.-based automakers are lobbying Congress in favor of a proposed Europe-U.S. free trade agreement. No surprises there: big businesses typically love agreements that lower trade barriers (though the companies were not universal in their praise of the recent free-trade deal with South Korea, or for a proposed one with Japan).
One other tidbit from Ford, though, is that they are proposing an agreement as part of the FTA whereby Europe and the U.S. would accept one another’s auto standards. Currently, Europe has the ECE standard for new vehicles,while the U.S. has FMVSS (Federal Motor Vehicle Safety Standards). Though similar in both scope and purpose, the two sets of standards are not the same. For instance, ECE has strict pedestrian-safety standards while the U.S. does not. FMVSS has strict requirements for vehicle lighting, while the rest-of-world (outside of the U.S. and Canada, mainly) requirements allow for more innovation and flexibility.
FMVSS 108 is the reason the U.S. was stuck with nothing but sealed-beam headlamps until the mid-80s, when aerodynamic composite headlamps had been available for years outside of the U.S. It’s also the reason we don’t yet see the latest lighting technology in the U.S.; the standards are written such that new technologies have to be explicitly permitted.
Ford and others aren’t proposing that the U.S. adopt the U.N. standards, just that Europe accept U.S. standards as good enough without requiring modification prior to sale within the EU, and the U.S. accept European standards as good enough without requiring modification prior to sale in the U.S.
Even such a simple concession would have a huge impact on automakers – not to mention on fans of low-volume niche products. Regulatory barriers to selling a particular car or even powertrain would fall. Want a not-for-the U.S. Focus RS? Maybe you will be able to buy one in a few years, without having to wait for its 15th birthday. How about a Thai-built Ford Ranger? Maybe. The prospects are almost unlimited if it actually worked out that way.
For automakers, it would have the potential of saving a ton of money that must be spent today to localize a vehicle for sale in a market other than in the one it was originally intended. For instance, two sets of crash tests may not be necessary. Two sets of headlights – ditto. Further, free trade would allow automakers to produce a given vehicle wherever it was most cost effective to do so, without regard for tariffs or other artificial barriers.
Sounds good to me. I wonder how the automakers’ unions in Europe feel about the possibility of “their” products being built in lower-cost countries, like the U.S., further eroding their factory’s utilization. That may be a larger obstacle than corporate opposition (which appears to not exist anyway). Of course companies want more efficiency, but would assembly workers feel that the improved efficiency pushed them right out of their jobs?
If you feel like reading the FMVSS 108 regulation on vehicle lighting, here’s the link. Zzzzzz.
