The EU-Korea Free Trade Agreement

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1 The EU- Free Trade Agreement Motor Vehicles and parts Addressing non-tariff barriers and promoting convergence and recognition Fernando PERREAU DE PINNINCK Head of Unit Industrial Tariff and Non-Tariff Negotiations, DG Trade European Commission

2 Content Background EU and n regulatory approaches The Motor Vehicles Annex - Coverage and objectives - Obligations - Implementation WG on Motor Vehicles - Dispute Settlement Conclusion

3 Background Divergences in technical regulations (safety and other standards) have act as hidden tariff in terms of additional costs, and can act as a significant non tariff barrier to trade Divergences can be justified by differences in regulatory approach, and regulators have the duty to ensure the safety of motor vehicles and to act to protect the environment International efforts to harmonise motor vehicle regulations UNECE, of which both and the EU are members

4 Divergences between EU and n car regulations EU has chosen to refer to the largest extent to UNECE Regulations for its legislative objectives. has a combination of standards some similar to UNECE, others to FMVSS, others are own standards, e.g.: - application of EU/UNECE regulations for diesel emissions or (planned) for CO2 emissions - application of US-based regulations for gasoline emissions - specific n standards for bus maximum width or seat size EU has a type approval system, selfcertification except for environmental regulations

5 EU- Annex 2B - Coverage Products covered - Motor vehicles and parts - Not covered: tractors, snow and golf cars, construction machinery other than trucks Objectives - Reciprocal market access - Compatibilty of regulations based on international standards - Promotion of cooperation UNECE and its «Working Party 29» recognised as the relevant international standard setting bodies, both parties to cooperate within UNECE

6 Main obligations 1. Recognition of equivalence of international standards 2. Certification and application of regulations 3. Convergence of future regulations 4. Avoidance of new non-tariff barriers 5. New technolgies or features 6. MFN for taxation and emission regulations

7 1. Recognition of equivalence of international standards (Art. 3) EU to accept any n product complying with UNECE regulations (list of 74 items/areas) to accept EU products complying with UNECE regulations listed (34 items/areas covering 42 KMVSS) EU and to harmonise regulations to UNECE regulations: 1 item/area for the EU, 29 items/areas for, within 3 years Recognition of equivalence and harmonisation to cover the core of n safety standards (2/3rds) and the most significant ones For standards not recognised/harmonised, consultation procedure in case of market access problems

8 Equivalence for 34 items with UNECE and KMVSS Regulations

9 Equivalence for 34 items with UNECE and KMVSS Regulations

10 Equivalence for 34 items with UNECE and KMVSS Regulations

11 Equivalence for 34 items with UNECE and KMVSS Regulations

12 Equivalence for 34 items with UNECE and KMVSS Regulations Passenger Car Break Seating Systems Emission Driver s Visibility Bumper Impact Tyres Head Restraints Engine Power Lighting & Signalling Systems

13 2. Certification and application of regulations (Art. 8) When a Party accepts equivalence with, or harmonises according to, UNECE regulations, UNECE type approval certificates shall provide presumption of conformity without prejudice of verification of conformity in a way that is not contrary to the presumption of conformity, i.e. by random sampling the EU, as UNECE member, can issue UNECE certificates for all the UNECE regulations subject to recognition or harmonisation Possible refusal in case of lack of conformity, or in exceptional cases for compelling safety, heal or environmental risk

14 3. Convergence of future regulations (Art. 4) UNECE to be the benchmark: Commitment not to introduce new domestic regulations diverging from UNECE, unless strongly justified Commitment to introduce in domestic legislation new UNECE regulations if available National regulations diverging from UNECE to be reviewed every three years to assess reasons for divergence In areas where there are no UNECE regulations, consultation to develop new international standards and/or approximation of national regulations

15 Other provisions Avoidance of new non-tariff barriers: no other measures to be adopted if they nullify/impair the benefits of the Annex, unnless necessary to protecty safety, health or the environement (art. 7) New technolgies or features allowed in the other Party to be permitted, can be refused only if proved that they create a risk for health, safety or the environment (Art. 6) MFN provisions for taxation and emission regulations

16 OBD and emissions OBD: EURO 6 OBD to be considered accepted as complying with LEV and ULEV OBD Till the end of 2013 (EURO 6 OBD to be available in 2014), transitional arrangements under quota for sales of cars with EURO 5 OBD car makers on the basis of their previous sales of cars with EOBD Emissions: derogations from the application of the n Non Methane Organic Gases fleet averages for car makers selling less than , or 250 motor vehicles per year

17 Implementation Close cooperation and consultation to address market access and regulatory issues Working Group on Motor Vehicles and Parts: - Supervision of implementation - Address any questions of interpretation/application - Monitor progress towards harmonisation - To meet at least once a year and when needed

18 Dispute settlement Expedited procedures: Urgency procedure Period for consultations halved to 15 days Period for interim panel report brought to 60 days from 90 days Immediate compliance in principle, if not reasonable period of time for implementation to be between 90 and maximum 150 days in case no legislative action needed

19 Conclusion Convergence towards UNECE clear objective Implementation is the key Mechanisms in place to address market access problems even before they become real Cooperation between the EU and to be strengthened fundamental for the successful application of the Annex