Non-Tariff Measures in EU-US Trade and Investment – an Economic Analysis
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Non-Tariff Measures in EU-US Trade and Investment – An Economic Analysis Reference: OJ 2007/S 180-219493 Final Report Client: European Commission, Directorate-General for Trade ECORYS Nederland BV Dr. Koen G. Berden Prof. Dr. Joseph Francois Mr. Martin Thelle Mr. Paul Wymenga Ms. Saara Tamminen Rotterdam, 11th of December 2009 This report was commissioned and financed by the Commission of the European Communities. The views expressed herein are those of the Consultant, and do not represent any official view of the Commission. ECORYS Nederland BV P.O. Box 4175 3006 AD Rotterdam Watermanweg 44 3067 GG Rotterdam The Netherlands T +31 (0)10 453 88 00 F +31 (0)10 453 07 68 E [email protected] W www.ecorys.com Registration no. 24316726 ECORYS Macro & Sector Policies T +31 (0)10 453 87 53 F +31 (0)10 452 36 60 ii Non-Tariff Measures in EU-US Trade and Investment Non-Tariff Measures in EU-US Trade and Investment iii iv Non-Tariff Measures in EU-US Trade and Investment Table of contents List of abbreviations used vii Preface xi Summary xiii Main results xiv Sector-specific results xv Extended Summary of the Study xvii Main findings of the Study xvii Sector-specific findings of the Study xxi Aerospace xxiv Automotives xxv Chemicals, cosmetics & pharmaceuticals xxvi Electrical machinery (Electronics & Office Information & Communication Equipment) xxviii Food & beverages xxix Communication services xxx Financial services xxx Insurance services xxxi Transport services xxxii 100 percent container scanning xxxiii Public procurement xxxiv Intellectual property rights (IPR) xxxiv Methodology xxxv 1 Introduction 1 1.1 Aims of this study 1 1.2 Definition of non-tariff measures and regulatory divergence 2 1.3 Structure of the report 2 2 Study context 3 2.1 Importance of the Transatlantic relationship 3 2.1.1 The importance of EU-US investment flows 3 2.1.2 The importance of EU-US trade flows 4 2.2 The importance of reductions in NTMs and regulatory convergence 4 2.3 Transatlantic policy developments and regulatory cooperation 4 2.4 Raising international awareness on both sides of the Atlantic 6 2.5 Looking forward to 2018 7 Non-Tariff Measures in EU-US Trade and Investment i 3 Methodology 9 3.1 Introduction 9 3.2 Literature review 9 3.3 Business survey 10 3.4 Special regression analysis: gravity regressions 11 3.5 Computable General Equilibrium (CGE) analysis 13 3.6 Competitiveness analysis 17 3.7 Forward-looking element 18 4 Quantifying NTMs and regulatory divergence 21 4.1 NTM indexes of regulatory divergence 21 4.2 Gravity estimations 22 4.2.1 Pooled regression results 22 4.2.2 Sector level regression results 23 4.3 Computable General Equilibrium (CGE) results 25 4.3.1 Overall macro-economic results of economy-wide NTM reductions 26 4.3.2 Economy-wide NTM reductions 27 5 Aerospace sector 33 5.1 Introduction 33 5.2 Identified NTMs and regulatory divergence 33 5.2.1 NTMs and regulatory divergence faced from EU to US 33 5.2.2 NTMs and regulatory divergence faced from US to EU 34 5.3 The importance of NTMs and the effects of NTM reductions 37 5.3.1 Overall level of restrictiveness of NTMs in the sector 37 5.3.2 Future EU & US trade and investment potential 37 5.3.3 Effects of NTM reductions on competitiveness 38 5.4 Conclusions 40 6 Automotives 43 6.1 Introduction 43 6.2 Identified NTMs and regulatory divergence 44 6.2.1 NTMs and regulatory divergence faced from EU to US 44 6.2.2 NTMs and regulatory divergence faced from US to EU 46 6.3 The importance of NTMs and the effects of NTM reductions 48 6.3.1 Overall level of restrictiveness of the NTMs in the sector 48 6.3.2 Future EU & US trade and investment potential 49 6.3.3 Effects of NTM reductions on competitiveness 50 6.4 Conclusions 52 7 Chemicals 53 7.1 Introduction 53 7.2 Identified NTMs and regulatory divergence 53 7.2.1 NTMs and regulatory divergence faced from EU to US 53 7.2.2 NTMs and regulatory divergence faced from US to EU 55 7.3 The importance of NTMs and the effects of NTM reductions 58 7.3.1 Overall level of restrictiveness of NTMs in the sector 58 7.3.2 Future EU & US trade and investment potential 59 ii Non-Tariff Measures in EU-US Trade and Investment 7.3.3 Effects of NTM reductions on competitiveness 60 7.4 Conclusions 61 8 Cosmetics 63 8.1 Introduction 63 8.2 Identified NTMs and regulatory divergence 63 8.2.1 NTMs and regulatory divergence faced from EU to US 63 8.2.2 NTMs and regulatory divergence faced from US to EU 64 8.3 The importance of the NTMs and the effects of NTM reductions 66 8.3.1 Overall level of restrictiveness of the NTMs in the sector 66 8.3.2 Future EU & US trade and investment potential 67 8.3.3 Effects of NTM reductions on competitiveness 67 8.4 Conclusions 69 9 Electronics 71 9.1 Introduction 71 9.2 Identified NTMs and regulatory divergence 71 9.2.1 NTMs and regulatory divergence faced from EU to US 71 9.2.2 NTMs and regulatory divergence faced from US to EU 73 9.3 The importance of NTMs and the effects of NTM reductions 75 9.3.1 Overall level of restrictiveness of NTMs in the sector 75 9.3.2 Future EU & US trade and investment potential 75 9.3.3 Effects of NTM reductions on competitiveness 76 9.4 Conclusions 78 10 Food & beverages 79 10.1 Introduction 79 10.2 Identified NTMs and regulatory divergence 80 10.2.1 NTMs and regulatory divergence faced from EU to US 80 10.2.2 NTMs and regulatory divergence faced from US to EU 82 10.2.3 NTMs and regulatory divergence faced both ways 83 10.3 The importance of NTMs and the effects of NTM reductions 85 10.3.1 Overall level of restrictiveness of NTMs in the sector 85 10.3.2 Future EU & US trade and investment potential 86 10.3.3 Effects of NTM reductions on competitiveness 87 10.4 Conclusions 89 11 Office, information & communication equipment 91 11.1 Introduction 91 11.2 Identified NTMs and regulatory divergence 91 11.2.1 NTMs and regulatory divergence faced from EU to US 91 11.2.2 NTMs and regulatory divergence faced from US to EU 92 11.3 The importance of NTMs and the effects of NTM reductions 94 11.3.1 Overall level of restrictiveness of the NTMs in the sector 94 11.3.2 Future EU & US trade and investment potential 95 11.3.3 Effects of NTM reductions on competitiveness 95 11.4 Conclusions 97 Non-Tariff Measures in EU-US Trade and Investment iii 12 Pharmaceuticals 99 12.1 Introduction 99 12.2 Identified NTMs and regulatory divergence 99 12.2.1 NTMs and regulatory divergence faced from EU to US 99 12.2.2 NTMs and regulatory divergence faced from US to EU 101 12.3 The importance of NTMs and the effects of NTM reductions 104 12.3.1 Overall level of restrictiveness of the NTMs in sector 104 12.3.2 Future EU & US trade and investment potential 104 12.3.3 Effects of NTM reductions on competitiveness 105 12.4 Conclusions 106 13 Communication services 109 13.1 Introduction 109 13.2 Identified NTMs and regulatory divergence 109 13.2.1 NTMs and regulatory divergence faced from EU to US 109 13.2.2 NTMs and regulatory divergence faced from US to EU 111 13.3 The overall importance and effects of NTM reductions 113 13.3.1 Overall level of restrictiveness of the NTMs in the sector 113 13.3.2 Future EU & US trade and investment potential 113 13.3.3 Effects of NTM reductions on competitiveness 114 13.4 Conclusions 118 14 Financial services 119 14.1 Introduction 119 14.2 Identified NTMs and regulatory divergence 120 14.2.1 NTMs and regulatory divergence faced from EU to US 120 14.2.2 NTMs and regulatory divergence faced from US to EU 121 14.3 The importance of NTMs and the effects of NTM reductions 122 14.3.1 Overall level of restrictiveness of the NTMs in the sector 122 14.3.2 Future EU & US trade and investment potential 122 14.3.3 Effects of NTM reductions on competitiveness 123 14.4 Conclusions 125 15 Insurance services 127 15.1 Introduction 127 15.2 Identified NTMs and regulatory divergence 127 15.2.1 NTMs and regulatory divergence faced from EU to US 127 15.2.2 NTMs and regulatory divergence faced from US to EU 129 15.3 The importance of NTMs and the effects of NTM reductions 130 15.3.1 Overall level of restrictiveness of the NTMs in the sector 130 15.3.2 Future EU & US trade and investment potential 130 15.3.3 Effects of NTM reductions on competitiveness 131 15.4 Conclusions 132 16 Transportation services 133 16.1 Introduction 133 16.2 Identified NTMs and regulatory divergence 133 16.2.1 NTMs and regulatory divergence faced from EU to US 133 iv Non-Tariff Measures in EU-US Trade and Investment 16.2.2 NTMs and regulatory divergence faced from US to EU 136 16.3 The importance of the NTMs and the effects of NTM reductions 137 16.3.1 Overall level of restrictiveness of the NTMs in the sector 137 16.3.2 Future EU & US trade and investment potential 137 16.3.3 Effects of NTM reductions on competitiveness 138 16.4 Conclusions 140 17 Other sectors 141 17.1 Other sector summarised CGE results 141 17.2 Travel services 143 17.2.1 NTMs and regulatory divergence faced from EU to US 144 17.2.2 NTMs and regulatory divergence faced from US to EU 145 17.2.3 Overall levels of restrictiveness – Travel services 145 17.3 Construction services 145 17.3.1 NTMs and regulatory divergence faced from EU to US 146 17.3.2 NTMs and regulatory divergence faced from US to EU 147 17.3.3 Overall levels of restrictiveness – Construction services 148 17.4 Other business services 148 17.4.1 NTMs and regulatory divergence faced from EU to US 148 17.4.2 NTMs and regulatory divergence faced from US to EU 149 17.4.3 Overall level of restrictiveness – Other business services 150 17.5 Personal, Cultural and Recreational Services 150 17.5.1 NTMs and regulatory