11th Construction Equipment Joint Technical Meeting

11th Construction Equipment Joint Technical Meeting CEMA , CIMA, EMI and CECE

2001 April 9,10 Rottach-Egern, Germany

Agenda Item 11.1.1 – Engine Emissions - USA The USA EPA has been regulating nonroad engine emissions since 1996. Tier II started for the 225 to 450 kW power band 1 January 2001. Subsequent power bands will fall under Tier II on a year by year basis until 1 January 2006. While EPA published a Tier III rule previously, they had left open the Particular Matter limit until the technical review process. This technical review is now in process. In the meantime since the publication of the Tier III NOx, HC and CO limits, there has been substantial activity with regard to the off-cycle emissions. This has resulted in many discussions concerning the need for a “not-to-exceed” qualification for the Tier III. In addition, for PM there has been concern that a “transient test method” was needed to fully evaluate the PM emissions of the engine. Both of these issues are being discussed between the engine manufacturers and the EPA. The process to complete the Tier III requirements is already well behind the needed schedule to allow the manufacturers to needed lead time to provide designs to meet the application of the rule in 2005 for consent decree signers, and 2006 for non-consent decree signers. This process of discussion between the EPA and the industry will run its course over the next months. At some point the EPA proposal will have to be released at which time industry will provide their views. Then EPA will finalize the rule. Depending on how well EPA addresses the real issues of implementation of lower emissions limits, the industry will have to exercise any provisions for redress as appropriate, or comply with the rule when it becomes effective. As Tier III is not the end of the process, there is discussion of the requirements for Tier IV. Tier IV discussions are mostly associated with exhaust aftertreatment in terms of PM traps or filters. A major factor in the effective use of traps or filters is the sulphur content of the diesel fuel. Currently the nonroad diesel fuel is a mixture of various fuel streams. Some fuel comes from the on-road fuel stream. Other fuel comes from the nonroad fuel stream and then the third comes from the heating fuel stream. As each of these most probably has and will continue to have different sulphur contents, the issue of aftertreatment is complex as use of such would require the low sulphur fuel which will start at the onroad distribution, but will not be implemented into the nonroad and heating fuel streams well into the 2010 timeframe. Thus, until there is the needed synergy between the engine technology and the fuel supply, no conclusion can be rendered as to when the engine technology of traps or filters can be made effective. There are mixed opinions of the state of readiness of traps and filters for application. Suppliers of the components are keen to have the market develop. Engine manufacturers have worked on the technology of application and effectiveness. Machinery manufacturers are a long way from having machines on which the traps and filters can be effectively packaged.

There is also considerable interest in the retrofit of traps and filters to what would be pre Tier IV machines. This obviously makes emissions sense in that once the low sulphur fuel is available, maximum use of it should be made to lower engine emissions. Whether or not machines can be readily retrofitted and if there will be sufficient economics for this to be viable have not been addressed. There will be obvious interest from the EPA, the fuel industry, and the trap and filter suppliers to achieve the maximum use of the low sulphur fuel. Thus, there will be numerous challenges for the machinery industry in the next years. Gerald H. Ritterbusch 12 March 2001

Annex to item 11.1.1Engine emission-USA

11th Construction Equipment Joint Technical MeetingCEMA, CIMA, EMI and CECE2001 April 9, 10Rottach-Egern, GermanyAgenda Item 11.1.1Currently Promulgated Regulations Page 1USA Emission Regulations for Nonroad Mobile Machines

USA EPA RegulationPower (kW)

>560 NOx: 9.2 / PM: 0.54 NOx + HC: 6.4 / PM: 0.2

450 =< 560 NOx: 9.2 / PM: 0.54 NOx + HC: 6.4 / PM: 0.2 NOx + HC: 4 / PM: ?



75 =< 130 NOx: 9.2 / PM: - NOx + HC: 6.6 / PM: 0.3 NOx + HC: 4 / PM: ?

37 =< 75 NOx: 9.2 / PM: - NOx + HC: 7.5 / PM: 0.4 NOx + HC: 4.7 / PM: ?

19 =< 37 NOx: + HC: 9.5 / PM: 0.8 NOx + HC: 7.5 / PM: 0.6

8 =< 19 NOx: + HC: 9.5 / PM: 0.8 NOx + HC: 7.5 / PM: 0.8

< 8 NOx: + HC: 10.5 / PM: 1.0 NOx + HC: 7.5 / PM: 0.8

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

No Limits USA Tier I USA Tier 2 USA Tier 3 USA Tier 3 pull aheadNOx & HC only for consent signers

1



Agenda Item 11.1.2 – Engine Emissions - Europe The DG-Environment like its US counterpart EPA is in the process of completing the stage III requirements for diesel engine exhaust emission. The European Construction Industry had two majors concerns about this process a) Made the viewpoint of the machine builders more known by the EU authorities. b) Assure an international alignment To respond to the first concern , CECE participated with others European Sector Committee (CEMA, Europgen, FEM, EGMF, Europump, Pneurop) and the Industrial engine manufacturers association Euromot to an industry task force. This group released this 14 December 2000 the JEIP 1on exhaust emission Regulation of non-road diesel engines, Stage III. This proposal was discussed during an EC/Member States expert meeting. The document 11.1.2 Attachment A is the JEIP 's recommendation for the Stage III limits. The document 11.1.2 Attachment B is the JEIP 's recommendation concerning the time schedule of the Stage III combined with the time schedule of the noise framework directive 2000/14/EC Concerning the second concern, the JEIP also defined what is meant by Alignment. The JEIP said that alignment means:

♦ Identical test procedures and limit values ♦ Introductory time optimised (max 2 years difference) ♦ Applies primarily to 3 main territories leading regulation: US, EU & Japan ♦ Recognises different regulations to satisfy national legislative procedural

needs ♦ Provides regulatory environment which allows single engine to be

competitively marketed in regulated territories. One point of great concern was the definition of a accepted world-wide test cycle . The aim of this test cycle is to measure particulate matter (PM)of non road diesel engines . The test must be able to run on simple dyno like eddy-current. This is a matter of engine expert . It can be summarised that starting with a transient test cycle for non-road diesel engines (NRTC) proposed by US EPA in Ann Arbor in September 13,2000 works carried out either in Europe or in the USA should arrive at the definition of a common accepted NRTC candidate . This was discussed by both parties during a meeting held in San -Antonio this March 26. The document 11.1.2 Attachment C summarises the activities in this field.

1 JEIP= Joint European Industry Proposal

2

During the course of the year an other major concern surfaced. It is concerning the quality of the fuel for non-road machinery. Indeed not only legislators are working on the Stage III but also on the Stage IV. It was currently accepted that to meet the limits of the future stage IV some kind of aftertreatment (PM traps or filters) would have to be used. Those devices are only viable if the sulphur content of the fuel is dramatically reduced. One talk of below 50 ppm sulphur content while to-day fuel in excess of 2000 ppm are currently burned in agricultural tractors and construction equipment . In Europe the situation varies from countries to countries . But it can be said that NRMM are using on-roads , non-road or heating fuel . There is a big price differences between on-road fuel and heating fuel , in the ration of 3 to 1. On-road fuel due the truck legislation will most likely be the first to be offered on the fuel distribution network in Europe. Non-road fuel and heating fuel according the fuel industry estimates will not be available before the end of this decade. This implies that emission legislation and fuel availability must be aligned. This message was also sent by the JEIP to the EU Commission and Member States experts.

1

Performance potential for Stage III

Assumes appropriate transfer of on-road technology

NOx + NMHC PM *)Power Category g/kWh % decrease

re. St. 2 limitg/kWh % decrease

re. St. 2 limit18<kW<37 7.5 21% 0.60 25%37<kW<75 4.7 43% 0.30 25%75<kW<130 4.0 43% 0.20 33%130<kW<560 4.0 43% 0.15 25%

Notes:• Tested relative to ISO8178 procedures, C1 test cycle• Assumes <500ppm Sulphur in fuel• Aligned to USA EPA Non-Road

- Tier 3 for NOx + NMHC- Tier 2 for NOx + NMHC and PM, 18<kW<37

*) PM needs further investigation to lead to aligned standardsExplanations:• NOx: Nitrogen Oxides• NMHC: Non-Methane Hydrocarbons• PM: Particulate matter

JEIP EU CI EXHAUST EMISSION STAGE IIIAgenda item 11.1.2 Attachment A

1

Power ( kW)

130 - 560 NOx: 9,2 / PM: 0,54 NOx: 6,0 / PM: 0,20 NOx+HC:4,0/PM:0,15

75 - < 130 NOx: 9,2 / PM: 0,70 NOx: 6,0 / PM: 0,30 NOx+HC:4,0/PM:0,2

37 - < 75 NOx: 9,2 / PM: 0,85 NOx: 7,0 / PM: 0,40 NOx+HC:4,7/PM:0,3 18 - < 37 NOx: 8,0 / PM: 0,8 NOx+HC:7,5/PM:0,6

Noise Stage I 2000/14/EC Stage II 2000/14/EC

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Year

EU stage I EU stage II Industry estimate EU stage IIIPM values to be reviewed

Emission limit values in g/kWh, Test cycle: ISO 8178 C1/D2The given dates refer to placing on the market; certification dates are 1 year earlier.

Existing and Estimated Emission related to Noise Legislation for Non-Road Mobile Machines in the EU

JEIP EU CI EXHAUST EMISSION STAGE III

Agenda item 11.1.2 Attachment B

Engine test cycle development USA EUROPE Legislator EPA DG-Environment Technical Advisor

SRWI JRC-Ispra + Cornetti

on machine in the US

Engine

Machine (CECE & CEMA) -provide data -provide machines for test at JRC

Set-13 mtg. Ann-Arbor Sept NRTC

Goal: development of an harmonised transient test cycle for measuring particles (PM) complying with stage III and IV of future regulations concerning non-road diesel engine Terms of reference (TOR) -37 to 560 kW power range -feasible on, modern controlled eddy current dyno -partial flow dilution tunnel -target-available mid-January 2001

-test on engine in the USA -tests on machine in the US

Engine -engine tested in EU and Japan according to Sept. NRTC - JRC received results from US engine tests -statistical analysis

Machine -machines tested at JRC

Engine tests confirm Sept NRTC is not feasible

Jan 15,2001 Geneva Jan 15, NRTC

New test cycle considered by EPA but not shared with Europe

-EC:JRC propose a methodology to analyse any cycle -Analysis of Jan 15, NRTC -Modified Cornetti-Hummel test cycle to meet Sept TOR (terms of reference) -test on engine to check feasibility

March 26 San-Antonio

Meeting planned to decide a common EU-US test cycle meeting the Sept 13 Terms of reference March 26 NRTC

And only after that acceptance

Tests will start on engines to test both cycle performance and measure emission to set limits

Agenda item 11.1.2 Attachment C

1

Eleventh Construction Equipment Joint Technical Meeting CEMA, CIMA, EMI and CECE

2001 April 9, 10 Rottach-Egern, Germany

11.1.3 Japan Emission control trend

(1) MOE Nov 1, 2000: MOE announced that they will move up the operation of emission control of special motor vehicles(19�P<560kW) from 2004 to 2003. The maximum allowed emissions are the same as that of the second stage for the construction equipment. Specific procedures are in accordance with the ordinance of MLIT. (2) MLIT (Special motor vehicles) Dec 5, 2000: MLIT notified WTO of the details of the proposal. (Attachment A) • The operation of emission control will be started on October 1, 2003 for late-model cars and on

September 1, 2004 for continuous production cars. • A Ministerial ordinance will be announced in about February 2001. (3) MLIT (Construction equipment) Nov 10, 2000: MLIT announced that an application for approval of the second stage emission criteria should be received on and after April 1, 2001. It has not yet been clear exact date which the 2nd stage emission criteria shall be effective in use at public works. (Attachment B) (4) The Tokyo Metropolitan Government November 20, 2000: The Tokyo Metropolitan Government conducted a survey of the current operational status of construction machinery in the Tokyo Metropolitan area. In the future, their emission control is very much foreseeable. For your information, as to their crackdown on unauthorized use of diesel fuel, a random inspection has been started on the spot. � CEMA’s action (1) CEMA has requested MLIT to simplify and announce the procedures at an early stage, and also

requested MOE to participate in the international coordination conference. (2) CEMA has requested EMA/ Euromot through LEMA to study the following two points.

a) The emission controlling value should be the same in Europe and USA. b) Relaxation of Transient Cycle Test Modes

11.1.3 Attach. A.rtf

Eleventh Construction Equipment Joint Technical Meeting CEMA, CIMA, EMI and CECE


New Application of Emissions Regulations on

Diesel-powered Special Motor Vehicles

––– Implementation of WTO advisory based on the “Agreement on Technical Barriers to Trade” –––

There are approximately 6,720,000 special motor vehicles in Japan including construction equipment (e.g., wheel loader) and industrial equipment (e.g., fork lift)etc. These vehicles account for 32% of all nitrogen oxides and 16% of all particulate matter in total vehicle emissions, and at present, they are not subject to vehicle emissions regulations. The Ministry of Transport has decided to introduce emissions regulations for these diesel-powered special motor vehicles for the first time, and in compliance with the “Agreement on Technical Barriers to Trade,” it has issued prior notification of its decision to member countries through the World Trade Organization (WTO). Upon completion of requisite procedures, Safety Regulations for Road Vehicles are scheduled to be amended in part, hopefully around February of 2001, and then the regulations will be introduced. The emissions regulations to be introduced are roughly on the same level as regulations in Europe and America. For carbon monoxide (CO), hydrocarbons (HC), nitrogen oxides (NOx), particulate matter (PM) and black diesel smoke, emissions regulations will be established in terms of rated-output of the engine. Initially, these regulations were scheduled to be introduced in 2004, but the schedule was brought forward one year to 2003 in response to a report by the Central Environment Council in 2000. If all the diesel-powered special motor vehicles to be subject to the new regulations were replaced by vehicles already compliant with regulations, it is estimated that NOx would be reduced by 36% and PM by 15% from current levels.

11.1.3 Attachment A

2

Target values (average values) for setting permissible levels of emissions by diesel-powered special motor vehicles under newly enforced regulations

Vehicle type Measurement

mode Carbon

monoxide Hydrocarbons

Nitrogen oxides

Particulate matter

Black smoke Scheduled date of enforcement

Special diesel vehicle

(19kW ≤ rated output < 37kW) 5.0 1.5 8.0 0.8






(130kW ≤ rated output < 560kW)

D8 mode (g/kWh)

3.5 1.0 6.0 0.2

40%

New model vehicles: October 1, 2003 Vehicles currently in production: September 1, 2004 Imported vehicles: September 1, 2004

• The emissions measurement mode will be the 8 mode (C1 mode stipulated in ISO8178-4), which is used internationally as the mode for determining the characteristics of emissions from special diesel vehicles in general. Permissible limits will be roughly equivalent to the regulation values on emissions in Europe and America.

• Black diesel smoke concentrations are measured while driving in 8 mode and while accelerating rapidly with no load. (JCMAS T-004 is adopted)

11.1.3 Attachment B

1

Introduction Plan of the Second Stage Standards for Construction Machinery (Draft)

Output and types based on using construction machinery

fixed by the second standard values Introduction timing

Three major models for general construction (8≦p≦272kw)

Backhoes Tractor shovels (wheel type) Bulldozers

Construction machinery for tunnel construction (30≦p≦272kw)

Backhoes Large breakers Tractor shovels Concrete spreading machines Drill jambos Dump trucks Concrete mixer trucks

Construction machinery widely accepted (8≦p≦272kw)

Engine generators (transportable types, other generators used as welding device)

Air compressors (transportable types)

Hydraulic power units (independent equipment for foundation work

Rollers (road rollers, pneumatic tire rollers, vibration rollers)

Wheel cranes (rough terrain crane)

When the emission control for special vehicles is introduced

* Construction machinery to comply with emission control by Road Trucking Vehicle Law is excluded.

* It is allowed to use construction machinery with control measures of exhaust gas (designated by the first stage standard value) that is manufactured before the base date of manufacturing which will be set aiming at the scheduled introduction timing for the special-purpose vehicle emission control.

* Considering how the construction machinery with exhaust gas control measures is widespread from now on, we will add the other construction machinery to be used in principle under the second stage standards. However, it is allowed to use construction machinery with these measures (designated by the first stage standard value) that will be manufactured before the base date of manufacturing in using in principle construction machinery whose output range is 8 to 272kw.

11.1.3 Attachment B

3

(For reference purposes)

The 1st standard value of exhaust gas

(g/kWh) Output classification:

P (kW) HC NOx CO Black smoke (%)

7.5≦P＜15 2.4 12.4 5.7 50 15≦P＜30 1.9 10.5 5.7 50 30≦P≦272 1.3 9.2 5.0 50

* Methods of measuring: JCMAS T004-1995 of “Measuring Methods of Exhaust Gas

by Diesel Engines for Construction Machinery” makes output measurements.

The 2nd standard value of exhaust gas

(g/kWh) Output classification:

P (kW) NOx HC CO PM black smoke (%)

8≦P＜19 9.0 1.5 5.0 0.80 40 19≦P＜37 8.0 1.5 5.0 0.80 40 37≦P＜75 7.0 1.3 5.0 0.40 40 75≦P＜130 6.0 1.0 5.0 0.30 40 130≦P＜560 6.0 1.0 3.5 0.20 40

* Measuring methods of black smoke will be changed to those according to ISO at an

appropriate timing, and the standard values will be reviewed to make adequate ones. Methods of measuring: JCMAS T004-1995 of “Measuring Methods of Exhaust Gas

by Diesel Engines for Construction Machinery” makes output measurements.

11th Construction Equipment Joint Technical Meeting CECE, CIMA, EMI and CEMA


Agenda Item 11.4 - 42 Volt Electrical System Currently off-highway machinery uses 12 or 24 volt electrical systems. The size and type of engine tends to dictate the system used in order to provide acceptable starting performance. The 12 volt system and the standards reflecting best practice have a common foundation with the automobile and small truck industry globally. Twenty-four volt systems are used in large over the road trucks as well as marine applications. A 24 volt based system can be a purely 24 volt system or a combination of 24 volt starting and battery storage system with 12 volt lighting and control / accessory functions. If yet another system is adopted such as 36 volt operating (42 volt charging) a new set of challenges will arise for the off-highway equipment industry; - Storage battery size and configuration - Fail safe terminals for dual voltage - 42 volt alternator - Hybrid wiring harness If the off-highway machinery is forced to adopt eventually the automotive model, which uses a hybrid 12 / 36 volt hybrid system, will require the following problem solutions; - Storage battery for dual voltage - Fail safe dual voltage terminals - Hybrid wiring harness - Integral engine flywheel alternator / starter - Electrically driven air conditioning compressor - Electrically driven coolant pump - Electrically driven fuel system - Electrically driven power steering system - Hybrid lighting systems - Hybrid control / accessory systems Because the off-highway machinery industry shares on highway electrical and electronic components and systems to make the features affordable it will be necessary to monitor the activity in the automotive component supplier and original Equipment Manufacturers arena.

Agenda Item 11.4 - 42 Volt Electrical System Page –2- Based on expert opinions there will not be a revolutionary move to the 36 / 42 volt charging system. Rather it will start in the upscale luxury car market to drive the myriad of options. The current best estimate of total conversion from 12 volt to 36 volt globally in automobiles will require 20 years. Thus, the off-highway equipment has time to evaluate and determine if or when 36 volt systems can provide practical advantages for users. The automobile industry has been searching for improvements that will yield advantages in; - Space utilization - Cost improvement - Weight reduction - Operating efficiency Customer demand for more features and convenience has increased the complexity of accessory drives and space robbing dedicated locations on the engine (alternator, coolant pump, fan drive, air conditioner compressor, power steering pump and in some instances air compressors). Even the starting motor is a space thief. At the same time all of the aforementioned components add weight, particularly the accessory drive, alternator and starter. If these parts could be eliminated or incorporated into existing systems / components there could also be a cost reduction. Eliminating weight and the accessory drive can contribute up to 10% operating efficiency improvements. Hence, automotive component suppliers and OEM's have reasoned that increasing the charging level to 42 volts alternators can be made smaller, wiring harness size decreased and starter size reduced. Furthermore, a 36 volt electrical supply can efficiently power an integral motor-compressor combination for air conditioning. The same reasoning applies to the replacement of hydraulic power steering with an electrical system. In fact, if the elements of the alternator and starter were incorporated in the flywheel and an integral coolant electric pump inserted into the cooling system, many of these systems could be remotely mounted near the need. This has become a major initiative in the automotive industry. In North America the OEM's and suppliers have joined together creating a cooperative SAE Research Project to determine the effects and limitations of a 42 volt charging system architecture on vehicle exterior and interior lighting. The objective is to determine the effects of Pulse Width Modulation on existing exterior and interior light sources (incandescent, LED, discharge, etc.).

Agenda Item 11.4 - 42 Volt Electrical System Page –3- FAKRA, a German organization, has submitted two draft standards to ISO as New Work Items (NWI). A new 42 volt ISO Work Group was formed. In resolution 688, ISO TC 22 / SC 3 unanimously agreed to set up WG 14 if the NWI, ISO TC 22 N2182 is approved by TC 22. The secretariat was assigned to Germany and Professor Bremer was appointed convener, subject to confirmation at the first working group meeting. The working group has prepared an ISO Working Draft (WD) based on the draft submitted with the NWI inquiry and has worked closely with other working groups to combine the new standard with ISO 16750. All of this work has been accomplished since 1999. Based on the level of activity and speed of development there is apparently an attractive payoff for the automobile industry to push forward on this technology. It is also rather peculiar that the past practice of labeling the system for normal output has been changed to maximum charging rate. At this point the selection of 42 volts as a limit seems to be related to human response to shock for higher alternating current voltage. Medically 45 volts is the arbitrary limit for safety if a person accidentally contacts an alternating current. Steve Burdette E:\Technical & Safety\Joint Technical Liaison (CECE, CEMA, CIMA, EMI)\2001 Joint Technical Meeting\11.4.doc



Agenda Item 11.5 1 – Results of the Cincinnati meeting 1. Conclusions of the TABD Cincinnati Conference For the Heavy Equipment Industry, all the issues were concerning the Group I -

Standards and Regulations. The conclusion of the Conference , detailed in the Final Communiqué , were the following: 1.1.Engine emission regulation As society proceeds to write a new social contract for the diesel engine's role in improving the environment, HEI places highest priority on EPA and DG Environment expanding their co-operative work to ensure harmonisation of the regulations impacting the design, manufacture and use of diesel engines in non-road machines. This is consistent with the mission of TABD, which is to accelerate transatlantic trade and this would include the following: An inventory of the differences

• A prioritisation of the issues (emissions, noise, fuel quality, test procedures, timing, cost, etc.)

• Inclusion of significant stakeholders • A defined schedule of the action to be taken reflective of the existing proposals

for further regulations

This must be accomplished prior to April 1, 2001. 1.2..Road safety regulations harmonization The Heavy Equipment Industry (HEI) reaffirms its need for the harmonisation of road regulations and their uniform application throughout the territory of the EU. It expressed appreciation to the Commission Services for having launched, this July 2000, a call for tender to use a consultant to study the restrictions of free circulation of off-road machinery in the EU. HEI considers this as a reaffirmation by the Commission that puts this project on a high priority to ensure a single market. HEI believes that because of the importance of reducing non-value added regulatory cost as soon as possible, the contract should be signed before the end of the year. HEI will give full support to the work of the chosen consultant by providing the needed relative information, by exposure to the reality of the design, manufacturing and approval testing of the machines equipped to travel on roads, and providing insight into the various Member States’ legislation relative to this issue.

The HEI will continue working for fostering and securing the Member States’ support on a Commission's proposal for a Directive bringing harmonisation of non-road machine regulations. 1.3.Fastener Quality Act 1.4.Early warning system - EU Presidency proposal for a directive on vibrations-Recommendation Note: This position is not addressed to the EU Commission but to the EU Presidency 2. TABD mid-year meeting in Washington-May 15

There is a mid -year meeting scheduled in Washington this May 15. The purpose of such meeting as set out by the TABD leadership team is: " All issue managers will be asked to give an assessment of the status of the Cincinnati Recommendations, and set forth a new agenda for 2001. The focus for the priority issues will be on actionable recommendations for government implementation. For the expert issues, the focus will be on measurable technical progress on their issue" We therefore have clearly two tasks: a) give the assessment of the status of the Cincinnati recommendation b) set forth agenda for 2001 .Refer to item 11.5.2 for this point

Page 1 of 4

11th Construction Equipment Joint Technical Meeting CEMA , CIMA, EMI and CECE 2001 April 9,10 Rottach-Egern, Germany Agenda Item 11.5.2 – TABD process reorganization - copy of a letter from TABD top management

TO: TABD EU and U.S. Steering Committees via email FROM: Allen Weltmann, U.S. Working Chair, PricewaterhouseCoopers Thomas Hagdahl, EU Working Chair, Electrolux RE: TABD 2001 – New Priorities and Reform DATE: 9 February 01 This memo is to introduce ourselves as the Working Chairs for the 2001 Transatlantic Business Dialogue (TABD) and provide you with some information on this year’s process. First, we would like to thank you for your dedication, hard work, and teamwork in making the TABD a highly successful endeavor. We believe 2001 is a year of opportunities for the TABD. The new U.S. Administration, the continued support of the European Commission, the increasing involvement of Parliamentarians in the TABD, and the upcoming World Trade Organization Ministerial all present opportunities to enhance trade and investment between the U.S. and the EU. We also face challenges such as the economically damaging trade disputes that have soured the political relationship, and NGO concerns over the impact of trade. In order to focus our energy and efforts to make the most of these opportunities, the 2001 Chairs, Jim Schiro of PricewaterhouseCoopers and Michael Treschow of Electrolux, have decided to realign the TABD structure and issue development process. These reforms are being implemented to address the concerns voiced by business and the governments. Their aim is to create more energy in the dialogue by facilitating and focusing on fewer but more actionable issues.

Page 2 of 4

LEADERSHIP TEAM FOR PRIORITY ISSUES The CEO Chairs are recruiting a core team of U.S. and EU CEO principals. These CEOs will comprise the TABD Leadership Team. They will have the responsibility of developing the priority issues for the 2001 agenda, and leading the discussion of these key proposals at the annual conference. The Leadership Team will be assisted, as in the past, by company sherpas and relevant issue managers responsible for reaching out to the business community. TABD AGENDA – CEO PRIORITY ISSUES The proposed priority issues for Leadership Team Agreement include: Capital Markets, Networked Economy, Dispute Management, WTO Agenda and Regulatory Policy (descriptions follows this memo). Small business input would still be provided into each issue. Concrete proposals selected within these themes will have to meet the following criteria: • they are actionable in 2002, • the recommendations be detailed and specific, • they require CEO and high-level political support, • they are cross cutting issues of interest to CEOs, and • they have a wide ranging impact on the transatlantic relationship. TABD AGENDA – EXPERT ISSUES Many of the TABD issues are more technical or have a long-term focus, and do not require specific CEO attention. These issues will be the responsibility of an “Experts Group” that will operate parallel to the CEO priority issues. Issue managers will be expected to continue to reach out broadly through the business community, as well as to the relevant working level government contacts, to develop detailed recommendations for progress by governments. Consensus language will be included in the Experts section of both the Mid Year report and CEO Conference conclusions. The Experts Group will meet quarterly in Steering Committees coordinated by the TABD U.S. and EU offices respectively. THE CEO CONFERENCE Reflecting the new working structure, the CEO Conference will consist of consecutive plenary discussions of the priority issues, under the discussion management of the Leadership Team. All CEOs will be able to participate in these crosscutting discussions with government. The first session will be a business-only session to allow companies to discuss the recommendations and any areas of disagreement. The second session will include the attending CEOs, government ministers, and parliamentarians. For the Experts group, there will be the opportunity to host breakout discussions. If useful to advance the issues, the issue managers can bring together industry experts along with working level government contacts to push for implementation of business’ recommendations. The Experts’ discussions will take place parallel to the CEO discussions. and do not require CEO participation. The results of both sessions will become the Conference Report.

Page 3 of 4

KEY DATES: MID YEAR MEETING AND STOCKHOLM CEO CONFERENCE The Mid Year Meeting will occur in Washington, DC on May 15. All issue managers will be asked to give an assessment of the status of the Cincinnati Recommendations, and set forth a new agenda for 2001. The focus for the priority issues will be on actionable recommendations for government implementation. For the expert issues, the focus will be on measurable technical progress on their issue. The CEO Conference will be held in Stockholm in the October/November timeframe. The exact dates of the Conference have yet to be determined. As a year-long, flexible process, the TABD has the opportunity to realign its’ structure and mission to be as productive as possible. The mission of the TABD remains the same – to provide consensus, business expertise to the governments on ways to boost trade and investment in the world’s largest commercial relationship. We seek your support for these reforms and welcome your input. The U.S. and EU TABD offices will arrange Steering Committee meetings to go over these changes in detail, and to take your suggestions and comments. Please do not hesitate to contact us or the TABD offices (EU Tel. +32 2 231 1728 ; U.S. Tel. 202-822-4769) if you have any questions. We both look forward to working with you over the next year on the important work of the TABD. Sincerely, Thomas Hagdahl Allen Weltmann 2001 EU Working Chair 2001 U.S. Working Chair Federation of Swedish Industries PricewaterhouseCoopers [email protected] [email protected] Tel. +46 8 783 80 83 Tel. 202 822 4230

mailto:[email protected]

mailto:[email protected]

Page 4 of 4

DESCRIPTION OF PROPOSED TABD 2001 ISSUES The selected issues measurably affect the American and European business communities. Our goal is to develop a few key actionable joint recommendations under each of the five themes, targeted where government progress is achievable this year, including: Capital Markets – highlight impediments to capital flow and suggest better coordination for the U.S.-EU financial architecture. Detailed recommendations could cover International Accounting Standards and Taxation. Networked Economy – focusing specifically on EU-U.S. issues, proposals on boosting e-commerce growth, targeting current EU and U.S. legislative proposals and regulatory bottlenecks, tax, privacy, mobile commerce, and business-to-business recommendations from technology users’ perspective. Dispute Management – resolve the existing disputes of concern to the business community and prevent new disputes from developing, especially through the ‘Early Warning Mechanism’. Prevent the damaging, negative economic impact of retaliatory sanctions WTO Agenda – specific proposals on industry’s agenda for the governments to negotiate for the new round and the built-in agenda including new areas like energy, environmental and air cargo services. Opportunity to contribute business agenda for the upcoming ministerial as well. Regulatory Policy – recommendations targeting regulation’s impact on business, including sector-specific concerns, with the goal of “Approved Once, Accepted Everywhere”, promoting international standards and harmonization in EU/U.S. systems and procedures, such as transatlantic merger review.



Agenda Item 11.5 3 – TABD 2001-Need to participate and potential subjects The attachment to this issue, number 11.5.2. TABD attachment is a copy of an official document from the TABD leadership team . This paper explains the new organisation of the TABD with more emphasis on the importance of the CEO's in the process. First Question for the HEI industry Do we have an issue that will meet the five criteria set for in the TABD attachment ? Those criteria are: "Concrete proposals selected within these themes will have to meet the following criteria: • they are actionable in 2002, • the recommendations be detailed and specific, • they require CEO and high-level political support, • they are cross cutting issues of interest to CEOs, and • they have a wide ranging impact on the transatlantic relationship." Second question for HEI If the answer for the first question is yes, do we have CEO's (US & EU) willing to be the champion for this issue? We have to avoid the last years situation where CEO's were identified to late in the process to give them a good feed -back on the issue. CECE's view The CECE viewpoint is that at the moment there is only one issue worth to be put on the agenda of the next TABD Stockholm Conference, that is the future worlwide regulations (steps 3 and 4) concerning the control of the diesel engine exhaust emission and the related problems ,particularly the availability of low sulphur fuel for non-rod mobile machinery. This position will have to be reviewed with our US counterparts If this viewpoint is accepted, it will be imperative to find rapidly CEO's willing to champion for it. By rapidly we mean identified for the mid-year meeting, scheduled the 15 of May.

11th Construction Equipment Joint Technical Meeting CECE, CIMA, EMI and CEMA

2001 April 9 - 10 Rottach-Egern, Germany

New Agenda Item 11.7 - "Recognition of Global Standards in National Regulations" EMI would like to propose this as a new item for discussion and industry support. E:\Technical & Safety\Joint Technical Liaison (CECE, CEMA, CIMA, EMI)\2001 Joint Technical Meeting\11.7.doc

Documents

11th Construction Equipment Joint Technical Meeting