Harmonization of EU-U.S. regulatory standards: challenges and opportunities

honors thesisCollege of Social & Behavioral ScienceEconomicsStephen E. ReynoldsThe prevailing trend of lower tariffs over the past half century has dramatically increased global trade flows and has exposed many previously invisible non-tariff barriers to trade, including trade-distorting regulatory practices. In this paper, I provide a broad overview of current practice and theory in harmonization between the United States and the European Union. While numerous articles, books, and studies relating to the topic have been published, little has been done to bring the various aspects of harmonization -- legal, social, and economic -- together and examine them as a whole. I argue that, if implemented properly, the benefits of regulatory convergence o economies on both sides of the Atlantic would be significant. I begin with a basic overview of the process and purpose of harmonization, a process that has been increasing, albeit in an uneven manner, over the past several decades. I then provide a basic review of U.S.-UE trade relations as a background for the current prospects of harmonization. An overview of economic analyses of the effects of harmonization between the U.S. and EU is provided in order to demonstrate the benefits accompanying such measures. Although the economic benefits are demonstrable there remains considerable opposition to harmonization. I examine the domestic arguments against harmonization, as well as international disagreements that slow the process of harmonizing standards. Although recognizing the validity of some of the concerns of opponents of harmonization, I conclude that most of their fears are relatively easily addressed by simple consultative and cooperative processes involving the public and private sectors and that on the balance the benefits of harmonization are many, while the drawbacks are relatively few and frequently overstated