Such an agreement, the working group urged, should provide for "the promotion of more compatible approaches to current and future regulation and standard-setting and other means of reducing non-tariff barriers to trade." One month later, President Obama notified Congress that the United States would enter into negotiations with the EU to seek a free trade agreement, referred to as the Transatlantic Trade and Investment Partnership (TTIP). The formal TTIP negotiations began in July 2013. How the United States and the EU Set Standards

The processes by which the United States and the EU establish vehicle safety, fuel efficiency, and emission standards have evolved in different ways. A National Traffic Safety Agency was established to carry out the provisions; it was renamed the National Highway Traffic Safety Administration (NHTSA) in 1970. It provides that "A manufacturer or distributor of a motor vehicle or motor vehicle equipment shall certify to the distributor or dealer at delivery that the vehicle or equipment complies with applicable motor vehicle safety standards prescribed under this chapter.... Certification of a vehicle must be shown by a label or tag permanently fixed to the vehicle ..."
The law also makes manufacturers responsible for testing of vehicles and liable for recalls and penalties if they are later found not to meet NHTSA's standards. U.S. Emission standards for engines and vehicles, including emission standards for greenhouse gases, are currently established by the U.S. Environmental Protection Agency. In addition to exhaust emission standards, U.S. regulations address many other emission-related issues. This approval process differs from the self-certification used by NHTSA and is closer to the EU type approval system for safety and emissions regulations. Comparison of U.S. and EU Vehicle Emission Standards

Vehicle emissions standards established by the EU and the United States are not directly comparable because of the differences in the testing procedures and approval processes. Both the European and the U.S. systems of compliance are based on a version of "type approval." Fuel Economy and Greenhouse Gas Emission Standards

			U.S. Standards Process

In the United States, establishing fuel economy standards is a function of direct statutory authority from Congress, with NHTSA administering the congressionally established standards. The first carbon dioxide emission targets for new passenger cars in Europe were set in 1998-99 through voluntary agreements between the European Commission and the automotive industry. A similar bilateral regulatory initiative has been under way since 2011 with Canada. Pathways to Convergence

There are different ways in which the United States and the EU could address convergence of automotive regulations under TTIP. Harmonization need not mean having identical rules in both regions. From the viewpoint of auto manufacturers, it means minimizing unnecessary differences in regulations so that a "single vehicle standard can be built to satisfy all requirements." F orward-looking rules . If the TTIP effort to obtain mutual recognition or harmonization affects agencies' authority or changes the ways in which automotive regulations are developed and implemented, Congress may well be asked to modify the underlying statutes that govern motor vehicle safety, emissions, and fuel efficiency. U.S. emissions standards are shown in Table A-1 . Fuel Economy and Greenhouse Gas Standards
U.S. Fuel Economy and GHG Standards and Implementation 
The 2012 CAFE and GHG vehicle standards call for combined passenger car and light truck greenhouse gas emissions of no more than 163 grams per mile by 2025. EU GHG Standards and Implementation 
The EU does not issue fuel economy standards similar to the U.S. CAFE standards.
In March 2013, President Obama notified Congress that his Administration would seek a comprehensive Transatlantic Trade and Investment Partnership (TTIP) with the European Union (EU). In addition to addressing tariffs and other trade restrictions, the negotiations seek to reduce regulatory barriers to transatlantic commerce. Among the barriers under discussion are those affecting motor vehicles. Although many automakers build and sell cars in both regions, they must comply with very different safety, fuel economy, and emissions standards, as well as different regulatory processes. TTIP negotiators are seeking to identify ways to narrow the regulatory differences, potentially reducing costs and spurring additional trade in vehicles. U.S. and EU automakers support this initiative, which they see as furthering economic and vehicle design trends already under way. The complexity of complying with different greenhouse gas emissions regulations is also a factor in the industry's support.
This report looks at ways in which TTIP might lead to a convergence of motor vehicle regulatory regimes on both sides of the Atlantic. These regimes govern three distinct aspects of vehicle manufacturing and involve a number of U.S. and EU agencies.
Safety. U.S. automakers self-certify that they are meeting U.S. vehicle standards. In Europe, vehicles must obtain "type approval" from a government before an automaker can bring out a new model. Emissions. U.S. and EU emissions regulations are administered by the U.S. Environmental Protection Agency (EPA) and the European Commission (EC), respectively. While U.S. and EC rules address a similar range of pollutants, including carbon monoxide, nitrogen oxide, and non-methane organic oxides, allowable emissions levels in the EU are different from those in the United States—and they are stricter in more than a dozen U.S. states than in the other states. The United States and the EU have similar "type approval" systems for new engine models. Fuel Efficiency. Auto manufacturers selling in the United States must meet the Corporate Average Fuel Economy (CAFE) standards enforced by the National Highway Traffic Safety Administration (NHTSA). Under the Obama Administration, greenhouse gases (GHG) in vehicle emissions are being regulated for the first time, making fuel economy standard-setting a joint venture between NHTSA and EPA. The EU does not directly set fuel economy standards, but it effectively does so by regulating greenhouse gas emissions of new vehicles.
There are several different ways a TTIP agreement could promote convergence of automobile regulation, from harmonizing existing U.S. and EU rules to providing for mutual recognition of some or all automotive standards. If a TTIP agreement is reached, it will be subject to congressional approval. To the extent that such an agreement would require changes in motor vehicle regulatory processes or standards, it is possible that Congress will be asked to modify statutes that govern motor vehicle safety, emissions, and fuel economy.