In November 2011, President Obama and leaders of the European Union (EU) named a High Level Working Group on Jobs and Growth to recommend steps to broaden transatlantic economic ties. In its final report, issued in February 2013, the working group called for a new bilateral agreement to govern transatlantic trade and investment. 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 negotiations, the President wrote, would seek greater compatibility of U.S. and EU regulations and related standards development processes, with the objective of reducing costs associated with unnecessary regulatory differences and facilitating trade, inter alia by promoting transparency in the development and implementation of regulations and good regulatory practices, establishing mechanisms for future progress, and pursuing regulatory cooperation initiatives where appropriate. The formal TTIP negotiations began in July 2013. Motor vehicle safety and emissions standards are areas where the United States and the EU could break new ground. Trade in vehicles and parts between the United States and the EU reached $57 billion in 2012, and numerous companies manufacture on both sides of the Atlantic. The major U.S. and European motor vehicle manufacturer associations have called for TTIP to provide for mutual recognition of existing technical standards and the creation of a U.S.-EU process for harmonization of future vehicle regulations. Such steps, an industry alliance has contended, would "increase trade, lower costs, create jobs and improve the international competitiveness of the industry" in both North America and Europe. The alliance estimates that current non-tariff barriers on vehicles are equivalent to a 26% tariff on vehicle imports. It projects that elimination of tariffs and just 10% of non-tariff barriers could raise U.S. vehicle and parts exports to the EU by over 200% and EU parts and vehicle exports to the United States by 71%. Safety, fuel efficiency, and emissions standards differ between the two regions (see Table 1 ), due to historical differences in producer and consumer preferences as well as the role of government in industry practices. The United States and the EU have different standards even for an item as simple as a seat belt. Some of these differences may reflect past efforts to protect domestic vehicle industries against foreign competition, and others may result from different legal traditions or divergent views as to the best way of achieving goals such as cleaner air and reduced oil consumption. Past auto agreements have been effective in leading to a more globalized auto industry. The 1965 motor vehicle agreement between the United States and Canada and the 1994 North American Free Trade Agreement (NAFTA) removed barriers to trade and cross-border trade in autos and established a more regional motor vehicle industry in the process. The Trans-Pacific Partnership, a separate negotiation involving the United States and 11 other Pacific Rim countries, could have a similar effect. With respect to the auto industry, TTIP represents another effort to extend these regional templates to encompass a greater share of trade and investment. The EU and the United States are the second- and third-largest vehicle producers in the world (see Figure 1 ), together accounting for nearly one-third of global auto production. In 2012, the EU 27 produced more than the United States—16.2 million vehicles compared to 10.3 million. Sales in each region were about the same in 2012: 14.8 million vehicles sold in the United States and 14.3 million in the EU. The remainder of EU production was exported, much of it to the U.S. market. Seventeen of the EU member states manufacture vehicles. Germany is by far the largest auto producer within the EU (see Figure 2 ). The five top countries—Germany, Spain, France, United Kingdom and Czech Republic—manufacture more than 76% of all vehicles produced in the EU. In the United States, vehicles are manufactured in 15 states. Unlike some consumer goods, such as computers and apparel, most vehicles are sold in the region where they are produced because of local consumer preferences and vehicle standards. In 2012, imports constituted about 20% of U.S. sales, and about 17% of sales in the EU. In some cases, a vehicle that is entirely legal in one country may not be sold in another due to differing fuel efficiency, safety, and emissions standards, unless the manufacturer is willing to make major investments to bring the vehicle into compliance. For example, Ford Motor Company's ECOnetic high-efficiency diesel engine, made in Great Britain, gets up to 71 miles per gallon (mpg) of fuel. This engine is not sold in North America because it does not comply with U.S. and Canadian emissions standards. Ford has determined that expanding its Mexican engine plant to make a redesigned version of the ECOnetic for North America would cost $350 million, and it does not believe consumer demand justifies the expenditure. Increasingly, however, auto manufacturers and their parts suppliers have sought to organize their production on a global basis. The German automaker BMW, as an example, produces sport utility vehicles for markets worldwide from a plant in South Carolina. Greater commonality in regulation would make it easier for automakers and parts makers to coordinate production across major markets. This is consistent with individual companies' efforts to reduce costs with new design and production plans, such as the following: Reducing platforms. Automakers are developing global vehicle platforms that will reduce the number of models sold around the world, while consolidating suppliers and cutting costs. For example, the new Jeep Cherokee and Dodge Dart are based on Fiat's Compact Wide platform. The Ford Focus was developed in Europe but is built with similar components in the United States, China, Germany, Russia, and Thailand and sold in 130 countries. Joining forces to meet tightening world emission standards. Many countries, including the United States, have adopted new standards that will be costly for manufacturers to meet. Automakers have responded by creating partnerships to develop more powerful batteries, multispeed transmissions, techniques to improve engine efficiency, and other technological advances. Along these lines, BMW and Toyota have agreed to jointly develop fuel cell technology. Growing U.S. interest in diesel-powered vehicles. About half of all the passenger cars sold in Europe have diesel engines, which are more efficient than gasoline engines and emit a lower level of some greenhouse gases. Many automakers believe that offering diesels (as well as higher-performing gasoline, electric, and hybrid vehicles) will be necessary to meet higher U.S. fuel efficiency and greenhouse gas emissions standards currently projected between now and 2025. Having similar standards for diesel engines in the two regions could reduce design and manufacturing costs. The processes by which the United States and the EU establish vehicle safety, fuel efficiency, and emission standards have evolved in different ways. In the United States, private standards and state regulation prevailed until the 1960s and 1970s, when federal legislation was passed. Since then, Congress has delegated vehicle regulation to federal agencies, occasionally providing specific direction through legislation. In Europe, a system of governmental control over autos was more prevalent, first in each country and later through the EU. EU directives passed by the European Parliament have the force of regulations, thereby vesting the legislators with a more direct role in the regulatory process than is the case in the United States. In the early decades of the automobile, U.S. vehicles were lightly regulated by a combination of state and private sector standards. While one industry magazine called for national motor vehicle standards as early as 1902, it did so mainly to reassure would-be buyers of the structural integrity these new, little-understood machines. Writing about this era, one author noted that Regulating either driver conduct or vehicle design at the national level did not conform to existing political ideas about the appropriate federal division of responsibilities or to contemporary jurisprudential understandings of the federal government's constitutional power to regulate interstate commerce.... The only useful and politically acceptable action Congress might take was to help the states and localities construct more and better roads. The Society of Automotive Engineers (SAE), a professional association founded in 1905, became the primary source of vehicle safety and emission rules for many decades. State governments often used SAE recommendations to enact requirements for vehicle equipment, such as dual brakes, headlamps, and windshield wipers. Other SAE standards were adopted directly by manufacturers. The first step toward a nationwide system of vehicle regulation came in 1926, when a voluntary Uniform Vehicle Code was drafted to replace the many different state rules. Among other things, the code specified the types of lighting, reflectors, brakes, mirrors, and tires that cars should have. These ideas were widely accepted by the states: by 1946, 30 of the then 48 states (plus the District of Columbia) had adopted the Uniform Vehicle Code; 13 had implemented portions and only six had taken no action. With the start of the Interstate Highway system in the 1950s, greater automobile travel, and rising highway deaths, the interest in vehicle safety grew. Between 1962 and 1964, Congress passed three safety bills into law, including a seat belt regulation. These laws set the stage for more ambitious legislation a few years later. For example, the legislation establishing safety requirements for federal fleet vehicles led to the promulgation of 17 standards by 1966, prompting some in Congress to question why similar standards did not apply to vehicles purchased by average consumers. The most significant change in U.S. vehicle safety regulation came with the National Traffic and Motor Vehicle Safety Act of 1966. Senator Abraham Ribicoff, one of the advocates of the new legislation, said during floor debate that "this problem is so vast that the Federal Government must have a role. It is obvious the 50 states cannot individually set standards for the automobiles that come into those 50 States from a mass production industry."