1. Daniel P. Malone Director Global Automotive Practice Butzel Long – Detroit Global Technical Regulations What are They? A Brief Introduction Korean International Trade Association Seoul, South Korea October 25, 2005

2. © 2005 Butzel Long 2 KITA/Butzel Long Thank you to KITA. Goal: Keep KITA’s automotive members apprised of select legal developments that apply to their company. Educational information - Not legal advice.

3. © 2005 Butzel Long 3 Global Technical Regulations November 18, 2004 – first global standard on vehicle safety – door latches and hinges. More than 20 countries, including Korea and United States have agreed to the standard Dr. Jeffrey Runge – Administration of NHTSA – “This is really a pioneering achievement and should lead the way to greater global harmonization of rules that will provide even more safety benefits down the road.”

4. © 2005 Butzel Long 4 What Is It That More Than 20 Nations Have Agreed To?

5. © 2005 Butzel Long 5 GTRs – What Are They? Global Technical Regulations (GTRs) are part of a larger, laudable attempt by the United Nations to drive the global harmonization of vehicle safety standards. “Harmonization” involves the effort of two or more countries to encourage free trade in goods or services by standardizing applicable laws. Standardizing laws governing vehicle safety standards could also lead to the adoption of best safety practices and reduced design, engineering, and production costs. Standardizing such laws could encourage yet another level of bureaucracy, international in nature and lacking the constitutional protections.

6. © 2005 Butzel Long 6 What Does the Process Involve? The United Nations has long encouraged harmonization of vehicle safety standards. In 1953, the United Nations established the “working party on the construction of vehicles,” also known as WP.29. WP.29’s initial task was to facilitate the adoption of uniform conditions for the manufacture and approval of motor vehicles, their equipment and parts. To expand the reach and scope of WP.29, in 1998 the United States proposed a new agreement, which was supported by Japan and the European Community. On August 25, 2000, a new agreement was reached and officially became known as the “World Forum for Harmonization of Vehicle Regulations” (“the 1998 Agreement”).

7. © 2005 Butzel Long 7 The Result of These Efforts? The result is a global forum and process “by which contracting parties by all regions of the world can jointly develop technical regulations regarding the safety, environmental protection, energy efficiency, and anti-theft performance” of motor vehicles. To accommodate the U.S. and Canadian systems of “self-certify” compliance with safety standards, the 1998 Agreement does not require countries to recognize each other’s system of approvals or certification. In addition, the 1998 Agreement seeks to insure that the “GTR process” features transparency and harmonization.

8. © 2005 Butzel Long 8 What Criteria Is Used? First, it must “clearly describe” the vehicles, equipment, or parts that can be fitted or used on vehicles which are subject to the proposed regulation. Second, it must “provide for high levels of safety, environmental protection, energy efficiency or anti-theft performance.” Third (similar to requirements for Federal Motor Vehicle Safety Standards (FMVSS), a GTR must be “expressed in terms of performance instead of design characteristics.” Fourth, a proposed GTR also must have a corresponding test method “by which compliance with the regulation [can] be demonstrated.” Fifth, where applicable, adequate lead time must be provided.

9. © 2005 Butzel Long 9 What Does the First GTR Involve? Designed to minimize the likelihood of occupants being ejected from a vehicle as a result of a crash by regulating the performance of door locks and door retention components. Fourteen other proposed GTRs are pending. 42,000 such failures in U.S. annually 1.2 million people die on roads annually (2/3s in Asia)

10. © 2005 Butzel Long 10 Many Other Key Issues WP.29 and the 1998 Agreement provide a desirable common forum and process for the automotive world to discuss and harmonize a range of regulations, several key issues remain. But, –Transparency. Are all (or only some) meetings documented? Are ex parte communications documented? Are “dockets” created in which interested parties can follow developments and comment? –Effect of GTRs. If the United States (NHTSA) does not adopt a GTR, but other countries do, should (must?) automakers nevertheless design their vehicles to these standards to protect themselves against allegations of defective design? –Judicial review. Is judicial review available to ensure constitutional protections are afforded to the governed parties, such as ensuring due notice?

11. © 2005 Butzel Long 11 What Other GTR Proposals Are Pending? Proposals for developing GTRs, Adopted by A.C3 Exhaust emissions from non-road mobile machinery Head restraints Common definitions of vehicle categories, masses and dimensions Protection of pedestrians and other vulnerable road users in collision with vehicles Braking of passenger and motor vehicle equipment

12. © 2005 Butzel Long 12 What Other GTR Proposals Are Pending? (continued) Installation of lighting and light-signaling devices On-board diagnostic system for heavy-duty vehicles and engines Location and identification of motor vehicle hand controls, tell-tales and indicators Motorcycle brake systems Heavy-duty off-cycle emissions vehicles Safety glazing materials for motor vehicles and motor vehicle equipment Heavy-duty vehicle exhaust-emissions type/approval/certification procedure Motorcycle emissions test cycle

13. © 2005 Butzel Long 13 Where Can I Find More Information More information on the global role of WP.29 and its organization can be found either in the WP.29 publication “WP.29 How it works – How to join it” at the address: http://www.unece.org/trans/main/wp29/wp29wgs/wp29gen/wp29pub.html http://www.unece.org/trans/main/wp29/wp29wgs/wp29gen/wp29pub.html or on the WP.29 homepage: http://www.unece.org/trans/main/welcwp29.htm

14. © 2005 Butzel Long 14 What Does This Mean? Designers and Engineers – at a minimum, add another item to your “checklist” before giving sign-off (i.e. does your product conform?) Auto Industry Associations - at a minimum – vigilance and full participation in the process

15. © 2005 Butzel Long 15 Will These GTRs “Work”?

16. © 2005 Butzel Long 16 Kamsahapnida!

17. © 2005 Butzel Long 17 Questions and Answers Daniel P. Malone Butzel Long 150 West Jefferson Suite 100 Detroit, MI 48226 Office 313 225 7032 Fax 313 225-7080 malone@butzel.com