Case #1676.0

International Trade Meets Domestic Regulations: Negotiating the US-EU Mutual Recognition Agreements

Publication Date: December 12, 2002
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In 1998, the United States and the European Union (EU) recognized each other's inspection, testing, and certification requirements for a wide range of traded products in a set of agreements known as Mutual Recognition Agreements (MRAs). The MRAs applied to nearly $50 billion in transatlantic trade in six sectors: medical devices, pharmaceuticals, recreational craft, telecommunications, electromagnetic compatibility (EMC), and electrical equipment. The purpose of the MRAs was to enhance the US-EU trade relationship by eliminating duplicative testing, streamlining procedures, lowering costs, and decreasing the amount of time needed to bring new products to market. According to the US Commerce Department, the agreement would save US industries more than $1 billion annually in testing and certification costs. According to Stuart Eizenstat, the MRAs would "cut red tape and save money for industry, consumers, and regulators and make the USA more competitive." The catalyst for the MRA negotiations was the Trans-Atlantic Business Dialogue (TABD), a group of American and European business leaders that came together as part of a US Government initiative. The MRA negotiations were also notable for involving regulatory agencies, such as the US Food and Drug Administration, in trade talks. Domestically in the US, tension arose between the regulatory agencies and trade agencies due to their differing missions. Tension also arose between US and European regulatory agencies which had different standards and methods for certifying products.

Other Details

Case Author:
Charan Devereaux
Faculty Lead:
Robert Lawrence and Michael Watkins
Pages (incl. exhibits):
United States, Europe