Regulatory Convergence in the Transatlantic Trade and Investment Partnership*

The Transatlantic Trade and Investment Partnership (“TTIP”) has been hailed as an opportunity for the world’s two largest consumer markets to expand inter-regional trade, investment and jobs, and to secure greater regulatory convergence that could considerably reduce costly and market-distorting extra-territorial non-tariff regulatory trade barriers.1 As fears of potential adverse effects on the World Trade Organization’smultilateral trading systemhave abated after the Doha round stalled,2 the initiation of the TTIP has been welcomed by the business communities on both sides of the Atlantic.3 Notwithstanding the anticipated benefits, questions arise with respect to both the way the negotiations are conducted and the topics covered. The TTIP negotiating mandate covers three main elements: (i) market access, (ii) regulatory convergence, and (iii) trade rules addressing shared global challenges. Of the three, regulatory convergence offers by far the greatest potential for substantial and lasting benefits. Regulatoryconvergencecouldpotentiallybeachieved through presumptive mutual recognition,4 voluntary unilateral recognition of equivalence,5 voluntary asymmetric recognition,6 some formof regulatory cooperation,7 or a combination of these approaches. As the Commission acknowledges, “[i]n today’s transatlantic trade relationship, the most significant trade barrier is not the tariff paid at the customs, but socalled ‘behind-the-border’ obstacles to trade, such as different safety or environmental standards for cars.”8 The plan is to negotiate ambitious agreements on sanitary and phyto-sanitary (SPS-plus) and technical barriers to trade (TBT-plus) measures, regulatory compatibility in specific sectors, such as chemical, automotive, ICT, and pharmaceutical (to be specified in annexes to the agreement), the so-called ‘cross-cutting’ disciplines, and an institutional framework for regulatory cooperation going forward. This opportunity notwithstanding, Europe’s precautionary principle (“PP”) has been identified as a