Trade, the Precautionary Principle, and Post-Modern Regulatory Process: Regulatory Convergence in the Transatlantic Trade and Investment Partnership

Abstract

The Transatlantic Trade and Investment Partnership (“TTIP”) has been hailed as an opportunity for the world’s two largest consumer markets to expand inter-regional trade, investment and jobs, and to secure greater regulatory convergence that could considerably reduce costly and market-distorting extra-territorial non-tariff regulatory trade barriers. This opportunity notwithstanding, Europe’s precautionary principle (“PP”) has been identified as a potential obstacle to a successful TTIP outcome. In our view, the TTIP presents a significant opportunity for creating a process for regulatory cooperation, harmonization, and convergence.

In this article, we focus on the PP and related differences in regulatory procedures. Specifically, we discuss the PP’s relation to post-modernism, and its influence on EU regulatory procedure and science, highlighting the paradoxes inherent in the PP. To put these issues into perspective, we also review the ‘reality of precaution.’ In light of this analysis, we assess the effectiveness of the trading partners’ attempts to reduce the regulatory divide, and explore what the EU and US can learn from each other. We then proceed to present some recommendations on how they should proceed in the TTIP negotiations.

Keywords: international trade, regulation, product standards, post-modernism, precautionary principle, regulatory coherence, regulatory cooperation, international relations, US-EU relations

JEL Classification: F10, F13, F15