INF/MSME/W/9  
 
4 October 2019  
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INFORMAL WORKING GRO UP ON MSMES  
GOOD REGULATORY PRAC TICES AND THE SMALL BUSINESS LENS PRINCI PLE 
The following document has been prepared by the WTO Secretariat at the request of the delegation 
of Uruguay, c oordinator of the Informal Working Group on MSMEs. It does not represent the official 
position of the WTO, nor of the WTO Secretariat.  
 
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1  GOOD REGULATORY PRAC TICES AND THE SMALL BUSINESS LENS PRINCI PLE – 
OVERVIEW  
Good Regulatory Practices (GRP) are a set of practices to ensure efficient and effective regulations. 
GRP, on their own, influence MSMEs. The Small Business Lens principle i s a subcomponent of GRP 
whereby the impact on MSMEs is explicitly included as part of the Regulatory Impact Assessment 
(RIA). The Small Business Lens principle has various names depending on the jurisdiction. In the 
European Union, it is referred to as the  "Think Small Principle" .1 Provisions on GRP have also been 
included in recent Regional Trade Agreements (RTAs).  
 
1.1  Principles of GRP  
Good Regulatory Practices refer to the set of processes and administrative simplification, impact 
assessments, and stakehold ers' engagement to improve the quality of the regulatory environment 
for business and citizens. The OECD Guidelines on GRP are articulated by the following set of 
principles2: 
 
1. Serve clearly identified policy goals, and be effective in achieving those goal s; 
2. Have a sound legal and empirical basis;  
3. Produce benefits that justify costs, considering the distribution of effects across society and 
taking economic, environmental and social effects into account;  
4. Minimise costs and market distortions;  
5. Promote innova tion through market incentives and goal -based approaches;  
6. Be clear, simple and practical for users;  
7. Be consistent with other regulations and policies; and  
8. Be compatible as far as possible with competition, trade and investment -facilitating 
principles at do mestic and international levels.  
 
1.2  What are Regulatory Impact Assessments and the Small Business Lens principle?  
Regulatory Impact Assessments (RIA) are the part of GRP requirements that ensure that the 
proposed regulation is assessed for its need and the net impact on society. RIAs are conducted over 
the entire life cycle of the regulations. The Small Business Lens principle is the specific focus on 
MSMEs of the RIA process whereby MSMEs are consulted during the regulatory process, their 
                                                
1 European Commission online information, The small business act for Europe . Viewed at: 
https://ec.europa.eu/growth/smes/business -friendly -environment/small -business -act_en . 
2 OECD 2014, OECD  Best Practice Principles for Regulatory Policy . Viewed at: https://www.oecd -
ilibrary.org/governance/the -governance -of-regulators_9789264209015 -en. INF/MSME/W/9  
 
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  interests are taken into account, and the impact on MSMEs is analysed pre and post -adoption of the 
regulation. RIAs require a serie s of steps to be followed3: 
 
1. Defining the problem;  
2. Setting objectives;  
3. Assessing all feasible options;  
4. Analysing the impacts arising from these options; and  
5. Consulting with stakeholders.  
 
2  DOMESTIC APPLICATION  OF GRP AND SMALL BU SINESS LENS PRINCIPL E FORESE EN 
IN RTAS  
There are two recent examples of regional trade agreements that have provisions on the domestic 
application of the Small Business Lens principle in Good Regulatory Practices. The Comprehensive 
and Progressive Agreement for Trans -Pacific Partners hip (CPTPP) has a general chapter on 
regulatory coherence. The United States -Mexico -Canada Agreement (USMCA) has a chapter labelled 
Good Regulatory Practices.  
 
These RTAs include provisions on both the domestic application of GRP and the Small Business Len s 
principle.  
 
2.1  RTA Provisions on GRP  
USMCA , Chapter 28,  Article 28.2  
Subject Matter and General Provisions  
"1. The Parties recognize that implementation of government -wide practices to promote regulatory 
quality through greater transparency, objective analy sis, accountability, and predictability can 
facilitate international trade, investment, and economic growth, while contributing to each Party's 
ability to achieve its public policy objectives (including health, safety and environmental goals) at 
the level of protection it considers appropriate. The application of good regulatory practices can 
support the development of compatible regulatory approaches among the Parties, and reduce or 
eliminate unnecessarily burdensome, duplicative, or divergent regulatory r equirements. Good 
regulatory practices also are fundamental to effective regulatory cooperation. " 
 
CPTPP , Chapter 25,  Article 25.5 , Paragraph 1 
"To assist in designing a measure to best achieve the Party's objective, each Party should generally 
encourage relevant regulatory agencies, consistent with its laws and regulations, to conduct 
regulatory impact assessments when developing proposed covered regulatory measures that exceed 
a threshold of economic impact, or other regulatory impact, where ap propriate, as established by 
the Party. Regulatory impact assessments may encompass a range of procedures to determine 
possible impacts. " 
 
2.2  RTA Provisions on Inclusion of the Small Business Lens  
USMCA , Chapter 28, Article 28.4 , Paragraph 1(e) 
"Promoting con sideration of regulatory impacts, including burdens on small enterprises of 
information collection and implementation. " 
 
CPTPP , Chapter 25,  Article 25.5 , Paragraph 3  
"When conducting regulatory impact assessments, a Party may take into consideration the potential 
impact of the proposed regulation on SMEs. " 
 
3  SUPRANATIONAL APPLIC ATION OF THE SMALL B USINESS LENS PRINCIP LE FORESEEN 
IN RTAS  
The application of GRP and of the Small Business Lens principle has implications beyond the domestic 
level. Some RTAs include provisions requiring the assessment of the RTA's impact on MSMEs. Other 
provisions call for MSME input in coordinating the implementation of the RTAs.  
                                                
3 ASEAN 2009, Good Regulatory Practice Guide. Viewed at: https://asean.org/wp -
content/uploads/images/2012/Economic/sectoral_aem/standards_conformance/ASEAN%20Good%20Regulator
y%20Practice%20(GRP)%20Guide.pdf . INF/MSME/W/9  
 
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  3.1  RTA Provisions on Assessing the RTA's Impact on MSMEs  
EU - Colombia and Peru, Chap ter 2 art.13  
"The Trade Committee may examine the impact of this Agreement on the micro, small and medium -
sized enterprises (hereinafter referred to as ‘Micro and SMEs’) of the Parties, including any resulting 
benefits ." 
 
US - Colombia, Chapter 20, art.1 &  US - Peru, Chapter 20, art.1  
"The Commission may review the impacts, including any benefits, of the Agreement on the small 
and medium -size businesses of the Parties. Toward that end, the Commission may: (a) designate 
working groups to evaluate the effects  of the Agreement on small and medium -size businesses and 
make relevant recommendations to the Commission, including working plans focused on the needs 
of small and medium -size businesses. " 
 
Canada - Colombia, Chapter 20, art.2001  
"The Parties hereby estab lish a Joint Commission, comprising cabinet -level representatives of the 
Parties, or their designees. The Commission may review the impacts, including any benefits, of this 
Agreement on the small and medium -size businesses of the Partie s (…)  and make relev ant 
recommendations to the Commission, including working plans focused on the needs of small and 
medium -size businesses. " 
 
3.2  RTA Provisions on Receiving MSME Inputs  
Canada - Colombia, Chapter 20, art.2001  
"Any working group recommendations with respect to t rade capacity building shall be referred to 
the Committee on Trade -Related Cooperation for consideration; and receive information, input and 
views from representatives of small and medium -size businesses and their business associations ." 
 
US - Colombia, Ch apter 20, art.1 & US - Peru, Chapter 20, art.1  
"Any working group recommendations with respect to trade capacity building shall be referred to 
the Committee for Trade Capacity Building for consideration; and (b) receive information, input and 
views from re presentatives of small and medium -size businesses and their business associations ." 
 
4  OTHER WTO DISCUSSION S ON GRP  
4.1  TBT 
The TBT Committee holds a regular workshop on Good Regulatory Practice, usually in March. In 
2017, Canada presented the "small business le ns" component of its Good Regulatory Practices in 
the TBT Committee.4 The TBT Committee has a synoptic table for GRP.5 There is also a recent 
publication "Facilitating Trade through Regulatory Co -operation: The Case of the WTO's TBT/SPS 
Agreements and Committees" launched during the Aid for Trade Global Review, which discusses 
GRP. The publication was written jointly with  the OECD.6 
 
4.2  STDF  
STDF work on GRP is anchored in the WTO SPS Agreement7 and aims to ensure that SPS measures 
are "fit for purpose" and that they avoid the creation of non -tariff barriers. Such work seeks to 
identify good practices and recommendations to enhance the development and implementation of 
SPS measures to:  
 
• strengthe n the effectiveness of regulatory interventions ; 
                                                
4 WTO 2017, Report by the Thematic Session on Good Regulatory Practices.  G/TBT/GEN/214 . 
5 WTO 2014, Good Regulatory Practice (GRP): Voluntary Mechanisms and Related Principles. 
JOB/TBT/119/Rev.1 . 
6 OECD and WTO 2019, Facilitating trade through regulatory cooperation . Viewed at: 
https://www.wto.org/english/res_e/publications_e/tbtsps19_e.htm . 
7 STDF online information, Good Regulatory Practices.  Viewed at: 
http://www.standardsfacility.org/good -regulatory -practice . INF/MSME/W/9  
 
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  • improve compliance with international standards and the WTO SPS Agreement ; 
• ensure health protection while facilitating trade.  
5  GRP IN OTHER INTERNA TIONAL FORA  
5.1  Organization for Economic Cooperation and Develop ment (OECD)  
OECD has a report labelled "OECD Guiding Principles for Regulatory Quality and Performance" . The 
report recommends that members " target reviews of regulations where change will yield the highest 
and most visible benefits, particularly regulatio ns restricting competition and market openness, and 
affecting enterprises, including SMEs" under the Assess Impacts principle.8 The OECD has a database 
on GRP, including information on the legal basis of members' GRP policies.  
 
5.2  International Standards Orga nization (ISO)  
ISO is also supportive of good regulatory practices and has advocated a similar system for standards, 
though there is no mention of assessing the impact on MSMEs in ISO documents.  
 
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8 OECD 2005, OECD Guiding Principles for Regulatory Quality and Performance.  Viewed at:  
http://www.oecd.org/fr/reformereg/34976533.pdf .