Four Challenges for TTIP Regulatory Cooperation

Abstract

Few regulatory developments over the past five years hold greater potential significance than the February 2013 decision of the United States and the European Union to begin negotiating a formal regulatory partnership agreement as part of the Transatlantic Trade and Investment Partnership (TTIP). Since then delegates from the US and EU have met more than ten times to try to find ways to eliminate or reduce the divergent regulatory requirements that apply to goods moving in transatlantic trade and act as high, non-tariff barriers to trade. A recent study estimated that streamlining just 25 percent of these different-but-equivalent requirements would save producers and consumers over $200 billion per year.

How should the two sides go about rationalizing and coordinating both the “flow” of new regulations and the (much larger) “stock” of inconsistent, existing requirements? Recognizing that this is a long-term project that will need to continue long after TTIP talks are concluded, negotiators are hard at work crafting the “Regulatory Cooperation chapter” – essentially a transnational administrative process to guide transatlantic regulatory cooperation efforts in the decades ahead.

This short article addresses four main challenges facing the design of the TTIP Regulatory Cooperation chapter. The first challenge is, obviously, to ensure that regulatory cooperation is energized in the future, after two decades of fitful efforts at transatlantic collaboration that have yielded at best mixed results. The second challenge is to assure that pressures for harmonization/mutual recognition of regulatory requirements do not result in downward pressure on health, safety, environmental or financial regulations. The third challenge is to make sure that line regulatory agencies have adequate resources to carry out the new mandates for regulatory cooperation that TTIP will impose upon them. This article examines this challenges and recommends solutions for each of them.

Finally, the article notes a fourth challenge that is self-inflicted by US TTIP negotiators: the US side refuses to disclose its proposals for regulatory cooperation to any but the European Commission and a handful of cleared advisors, mostly industry. Here, the solution is obvious: in keeping with Good Regulatory Practice (GRP), the US should disclose and take public comment on its proposals for international regulatory cooperation, as its negotiating partner, the European Commission, is already doing on its side.