Title: Developing a Domestic Framework for International Regulatory Cooperation
Abstract: I INTRODUCTION In recent years, the emergence of the World Trade Organization and the negotiation of a complex array of bilateral and multilateral free trade agreements have led to a substantial reduction in tariffs and other traditional barriers to free trade. (1) Though residual tariffs pose an ongoing impediment to international commerce, traditional trade barriers have become exceedingly weak by historical standards and have further eroded in the last several decades, particularly as developed economies have sought the increasing integration of their trade channels. (2) Thus, free trade advocates have largely shifted their focus to nontraditional trade barriers. Perhaps the single largest obstacle to enhanced international trade is the persistence of disparities between individual nation-states' regulations. (3) Unnecessary regulatory disparities pose a far more insidious threat to international trade than do tariffs, for nation-states legitimately implement regulations designed to protect their citizens with varying levels of protection depending on the risk-tolerance levels of the nations' respective citizenries. (4) Though many regulatory differences represent a studied effort to tailor protections to public risk tolerances, a number of regulations differ simply for historical, nonsubstantive reasons, (5) and still other disparities emerge as a result of rent-seeking behavior by domestic industries pursuing an unfair advantage vis-a-vis foreign competitors. (6) Unfortunately, distinguishing legitimate from illegitimate regulatory differences is a difficult and politically fraught process, for very few regulations lack any nominal welfare-enhancing justification. (7) In the last several years, U.S. regulators have made initial forays into the enormously complex task of identifying and correcting unnecessary regulatory disparities. In December 2011, the Administrative Conference of the United States adopted Recommendation 2011-6, which urged U.S. agencies to seek opportunities for regulatory cooperation with foreign authorities when doing so would either advance the agencies' regulatory missions or remove unnecessary barriers to trade without undermining those missions. (8) Partly in response to the Administrative Conference's recommendation, President Barack Obama issued Executive Order 13,609 in May 2012. EO 13,609 directs agencies subject to presidential regulatory review to summarize their international regulatory cooperation activities in their Regulatory Plans and to minimize unnecessary differences between U.S. regulatory requirements and those of key trading partners both in promulgating future rules and in conducting retrospective review of existing rules. (9) EO 13,609 thus places a high priority upon a cross-border issue that many agencies had largely neglected insofar as it was viewed as outside the ambit of their overall regulatory missions. (10) Nevertheless, without additional reforms designed to promote international regulatory cooperation on the part of U.S. agencies, EO 13,609 is unlikely to effect a significant change in the regulatory landscape. By proposing a framework for scrutinizing existing U.S. regulations and eliminating unnecessary international disparities, this article builds upon the impetus of EO 13,609 and other high-level efforts at promoting global regulatory convergence. Specifically, this article proposes empowering members of the public--including individual citizens, businesses, and public interest organizations--to request that an agency justify existing regulatory disparities. The responding agency may then pursue one of three potential courses. First, if it finds that the regulatory disparity serves no legitimate purpose, it may choose to harmonize a regulation with that of a trading partner, recognize compliance with the overseas regulation as equivalent to compliance with the corresponding U.S. regulation, or otherwise seek greater compatibility between the differing regulations. …
Publication Year: 2015
Publication Date: 2015-09-22
Language: en
Type: article
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Cited By Count: 2
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