By Emre Peker 

BRUSSELS -- U.S. and European trade negotiators are chasing quick wins to cement a July cease-fire. Problem is, even seemingly simple trade moves can take years.

President Trump and European Commission President Jean-Claude Juncker agreed at the White House on July 25 to avert a trade fight and work toward "zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods."

As trade teams prepare to meet in Washington on Tuesday, some U.S. officials, led by Commerce Secretary Wilbur Ross, are warning the EU not to test Mr. Trump's patience with delays.

The president wants "quick negotiations that produce tangible results," Mr. Ross said in Brussels on Wednesday, a day after meeting EU Trade Commissioner Cecilia Malmstrom. "This is not meant to be a five-year project," he said.

Negotiators, after disagreeing about the scope of a quick mini trade deal, are now focused on aligning American and European regulations on goods and services. U.S. Trade Representative Robert Lighthizer hopes for "an early harvest in the area of technical barriers to trade," his office said last month after his first round of talks with Ms. Malmstrom.

The July détente suspended, for now, the threat of U.S. levies on car imports, a top concern in Europe; EU officials say talks to cooperate on auto regulations "could be particularly fruitful."

Because of the cost of adapting products to slightly different standards, coordination could yield huge savings for both sides, industry and trade officials say. When the U.S. and EU tried aligning regulations a decade ago, Dutch consulting firm Ecorys estimated their economies together would gain more than $200 billion a year by eliminating duplicative standards.

The EU-funded analysis remains the benchmark on regulatory barriers, which industry officials say have increased. Putting a price on regulation is difficult because it entails elements including testing, inspections, legal analysis and filings.

In comparison, trans-Atlantic tariffs average less than 3% on more than $1 trillion of annual trade in goods and services, or roughly $30 billion.

But this is the third U.S.-EU attempt since 2007 to eliminate non-tariff barriers. Finding common ground on regulations is "very difficult and will not happen quickly," said Iain MacVay, a London-based lawyer at King & Spalding who has advised clients in the pharmaceutical industry during EU-U.S. trade talks.

Adjusting industrial standards can be technically complex, and further complicated by lobbying on all sides. Unifying regulations is no easy task even in industries where regulators and businesses march in step, such as commercial aviation.

It took five years for Washington and Brussels to negotiate mutual recognition on air-safety standards, and implementation of their 2008 deal was delayed another three years over one sticking point.

Chemicals companies long ago gave up on harmonizing regulations across the Atlantic and now seek minor steps on the classification and labeling of chemical products.

Relabeling the same product for sale in two different markets costs billions of dollars a year. For U.S. chemicals exporters, the cost of different safety labeling requirements runs at some $475 million annually, according to White House estimates.

Eliminating half the non-tariff barriers for chemicals would result in total economic gains of more than $10 billion in the U.S. and the EU, according to Ecorys estimates.

"The compliance costs are higher than the tariffs -- the possibilities to really lower those cost are limited but still very worthwhile," said René van Sloten, executive director for industrial policy at the EU chemical industry lobby Cefic. "The less divergence there is the better."

One path to quick results is to resurrect past agreements. During three years of talks on the proposed Trans-Atlantic Trade and Investment Partnership, which collapsed in 2016, the two sides reached some preliminary agreements on standards, which got filed away.

Officials could claim results by plucking out "an agreement somewhere in the drawer" and presenting it as a deal, an EU official said.

"We have done, over the years, a lot of preparatory work," Ms. Malmstrom said on Oct. 5. "There are certain things that are quite low hanging fruits."

An example is the EU-U.S. mutual recognition agreement on good manufacturing practices for pharmaceuticals, which promises to cut costs by ending duplicate inspections. Negotiated over three years during TTIP talks and signed by the U.S. the day before Mr. Trump took office, the agreement was built on a 1998 pact that U.S. regulators refused to implement due to concerns about lax standards in some EU countries.

The accord has been in force since November 2017 and is set to be fully applied by July 2019. Industry officials and the European Commission said the agreement could be expanded to include vaccinations and veterinary medicines, two areas highlighted by EU officials as ripe for potential deals.

For negotiators looking at trans-Atlantic differences in regulations, "the deliverables in a very short period of time will be limited," said Luisa Santos, international relations director at lobbying group Business Europe. "The main change is that now we have a positive narrative" following the July agreement, she said.

Mr. Lighthizer meets again with Ms. Malmstrom next month. He notified Congress on Tuesday of the administration's intent to negotiate a trade deal with the EU. "We are committed to concluding these negotiations with timely and substantive results," he wrote.

On Thursday, Mr. Juncker, the EU's top executive, said his agreement with Mr. Trump "will be done."

Write to Emre Peker at emre.peker@wsj.com

(END) Dow Jones Newswires

October 21, 2018 08:14 ET (12:14 GMT)

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