The U.S.-EU Transatlantic Trade and Investment Partnership trade negotiations have a goal of reducing the ‘behind the border’ non-tariff barriers that slow the flow of goods and services trade and significantly cutting the cost of differences in regulations by promoting greater compatibility without reducing product safety. That will require governments of both economies to develop the capacity to integrate thousands of regulations. A recent Government Accountability Office (GAO) report International Regulatory Cooperation shows that portions of the U.S. federal government are already engaged on the issues.
GAO was asked by Representative Darrell Issa (CA-R), Chairman of the House Committee on Oversight and Government Reform, to examine what U.S. agencies are doing to engage in international regulatory cooperation. GAO interviewed officials from seven U.S. agencies that regulate products traded internationally and four agencies with government-wide regulatory and international cooperation roles and responsibilities. USDA officials were among those interviewed. The issues discussed included using international standards, recognizing each other’s regulations as equivalent, and sharing scientific data. Officials from academic institutions and stakeholder organizations representing business and consumer advocacy were also interviewed.
President Obama issued Executive Order 13609 in May 2012 to promote international regulatory cooperation by providing high-level support and direction for U.S. agencies. It directs agencies to consider addressing unnecessary differences in existing regulations and describes processes to help avoid regulatory divergence in the future.
The order assigned responsibility to the Regulatory Working Group (RWG), chaired by OMB’s Administrator of the Office of Information and Regulatory Affairs, to serve as a forum to discuss, coordinate, and develop a common understanding among agencies of U.S. government priorities for international regulatory cooperation. The RWG is developing guidance to implement the executive order. U.S. Trade Representative (USTR) chairs the Trade Policy Staff Committee (TPSC) which provides trade policy coordination among the Departments of State, Commerce, Labor and Agriculture and other agencies. The USTR coordinates with agencies at the working level through the TPSC subcommittees on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) barriers.
Officials from the U.S. agencies interviewed by GAO identified seven key factors that affect the success of regulatory cooperation activities: (1) dedicated resources, (2) established processes, (3) high-level leadership, (4) scientific and technical exchanges, (5) stakeholder involvement, (6) statutory authority, and (7) early and ongoing coordination. GAO analysts prioritized the factors based on information gathered for this report and previous ones.
USDA is central to much of the work on regulatory cooperation in trade. It is the national enquiry point for the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), coordinates U.S. government comments on foreign SPS regulations, and notifies the WTO of U.S. regulations that may have trade impacts. USDA has the government offices for coordination with the Codex Alimentarius Commission, the World Organization for Animal Health, and the International Plant Protection Convention, the three international standard setting bodies referenced by the WTO SPS Agreement.
USDA’s Agricultural Marketing Service (AMS) manages equivalency agreements for organic food labeling. Organic products certified in the EU or the U.S. are allowed to be sold as organic in either region resulting in expanded market access, fewer duplicative requirements, and lower certification costs for organic products.
Agencies also engage in work-sharing arrangements with foreign counterparts to leverage resources and gain efficiencies in the implementation of regulatory programs. Under the United States-Canada Beyond the Border Initiative, USDA’s Animal and Plant Health Inspection Service (APHIS) conducted a joint foot and mouth disease site visit in Colombia as part of the evaluation of Colombia’s request to export fresh beef to both countries.
FDA also plays a role in agricultural trade. The agency developed a comprehensive international food safety capacity-building plan in response to a requirement in the Food Safety Modernization Act. The plan establishes a strategic framework for the FDA, describes an approach that is based on prioritizing risks to U.S. consumers, and focuses on addressing system weaknesses by working with foreign government and industry counterparts and other stakeholders.
Private stakeholder input for the regulatory process is important, but there is no single source of public information on anticipated U.S. and foreign rulemakings with international impacts. Under Order 13609 OMB directs agencies that are required to submit a regulatory plan to include summaries of international regulatory cooperation that are reasonably anticipated to lead to significant regulations. GAO noted it may not be realistic for agencies to report all international regulatory cooperation activities because many of them are informal.
In conclusion the GAO noted that regulatory agencies need to collaborate with other U.S. agencies, foreign counterparts and affected nonfederal stakeholders. GAO recommended that the RWG, as part of forthcoming guidance on implementing Order 13609, establish one or more mechanisms, such as a forum or working group, to facilitate staff level collaboration on international regulatory cooperation issues and include independent regulatory agencies.
According to the GAO, the current system for international regulatory cooperation is far from perfect, but it has much of the needed framework to gather input from domestic stakeholders and engage regulators from other countries to further harmonize international regulations. If an overall trade agreement can be reach with the EU, the U.S. government appears ready to implement the regulatory provisions.