I posted recently about what "regulatory trade barriers," a term that gets thrown around a lot in the context of the TTIP negotiations, might mean. Trade lawyer Ted Posner offered up a comment, and I wanted to respond to a couple of his points. (And by the way, this comment went to a spam folder for some reason. If you notice that your comment does not appear on the site, feel free to get in touch with me, and I'll try to retrieve it.)
Ted makes three points. Here is the first:
First, in discussing the paper on regulatory cooperation in TTIP, you refer to the U.S.-Canada Regulatory Cooperation Council as a model. But the model for the RCC was the U.S.-EU High-Level Regulatory Cooperation Forum, which is one of several intensive dialogues under the umbrella of the Transatlantic Economic Council (TEC). So, if all we achieve in TTIP under the heading of regulatory cooperation is something like the RCC/HLRCF, we really will not have moved that far from the status quo.
My sense is that the RCC has gone further than the HLRCF in terms of both structure and results. For one thing, there are periodic public meetings in the RCC, in which people and companies can observe, discuss and communicate with regulators. Thus, the RCC process is more formalized than was the HLRCF. It is more than just a dialogue. Also, in our JIEL article on these issues, we talk about specific, concrete results from the RCC. At the same time, there is still a lack of transparency in these matters, with limited information available through web sites or otherwise on progress made in particular sectors. You really have to do some digging to find out what's going on. It seems to me that those in charge should be broadcasting their activities and successes, and also asking for more public input. So, I'm happy to go further than the RCC, but I do think it can provide a good framework for future progress. Basically, US-EU regulatory cooperation should be like the RCC, but intensified.
He also says:
Second, with respect to the three categories you identify, I see how the first two could be considered "regulatory trade barriers." But in what sense is "regulatory reform" a regulatory trade barrier? It seems to me that "regulatory reform" describes a category of measures to reduce or eliminate regulatory trade barriers.
This is a tricky one, because I'm not arguing myself that regulatory reform should be characterized as a trade barrier. Rather, I'm saying that some people seem to identify ineffective, inefficient or otherwise bad regulation as an issue that should be addressed in trade agreements. In that sense, they appear to think of it as a trade barrier, although it is not always clear how it is one. To take some examples: (1) in the TPP, the US is pushing trading partners to set up something like the Office of Information and Regulatory Affairs (OIRA); and (2) in the TTIP, the US has suggested that the EU change its regulatory model to allow comments on draft regulations. How should these demands be characterized? To me, the existing regulatory systems of US trading partners are not a "regulatory trade barrier" that needs to be dealt with in a trade agreement. However, by using trade negotiations to request that other countries "reform" their regulatory process, it seems to me the US is, implicitly at least, identifying regulatory deficiencies as trade barriers.
Finally, Ted talks about what might be done about regulatory divergence:
I see a sliding scale. At the most ambitious extreme, there is true harmonization, whereby an existing gap is bridged by developing a common approach that applies equally in the United States and the EU. At the least ambitious extreme is a "soft" commitment to acquire a better understanding of the other party's approach to regulation in a particular area. ... Along the spectrum in between the two extremes are lots of different options -- for example, mutual recognition ... ; forebearance (not quite the same as mutual recognition, but a loose commitment to exercise discretion favorably in light of the other party's high standards).
My only comment here is, yes, there are a range of options, and it will be interesting to see where the TTIP goes in this regard.
