Regulatory Protectionism (and Legislative Protectionism?)
My Cato colleagues Sallie James and Bill Watson have a new paper on regulatory protectionism. On Thursday, April 18, there will be a policy forum on the paper here at Cato, with commentary by former AB Member Jim Bacchus and economist Don Boudreaux.
There's a lot going on with these issues, but I wanted to highlight one point. Here's a passage from the paper:
Requiring agencies to consider and evaluate the impact of a proposed regulation on international trade could limit the incidence of protectionism. Agencies setting food safety measures already undertake the scientific assessment required by the SPS Agreement. These agencies and others should further undertake to assess whether a less trade restrictive alternative could also meet regulatory goals. Requiring agencies to identify alternative policies that meet regulatory goals and then to analyze the trade restrictiveness of each proposal would make it difficult to impose WTO-inconsistent regulations. The requirement might not always prevent the establishment of discriminatory standards, but by adding an apolitical element, it would pressure the agencies to justify their actions on legitimate grounds. Agencies that ignore the requirement or choose an inferior policy should be subject to effective legal challenge by adversely affected private parties.
What strikes me about these issues is that the focus is usually on regulation by executive agencies. The goal is to make agency regulation more effective and less protectionist.
By contrast, the legislature tends to get a free pass.
But I wonder, if the agencies are simply implementing legislation, can we ignore the legislative process? Should there be some attempt to make legislatures comply with the guidelines mentioned in the passage? Putting constraints on regulators may be a good idea, but when the legislation is flawed, there is only so much it can do.
ADDED: To clarify a bit, what I have in mind are things like the cost-benefit analysis that U.S. agencies do under domestic law. If legislatures don't have to do this, doesn't it undermine the constraints on regulators?