G/TBT/GEN/208  
 
6 February 2017  
(17-0707) Page: 1/4 
Committee on Techni cal Barriers to Trade  Original: English  
 
RECENT AND ONGOING A CTIVITIES RELATED TO  THE WORK OF THE TBT COMMITTEE  
INFORMATION PROVIDED  BY THE ORGANIS ATION FOR  
ECONOMIC  CO-OPERATION AND DEVELOPMENT  (OECD)  
This document contains information provided by the OECD  at the TBT Committee meeting of  
10-11 November 2016 under Agenda Item 4 (Updating by Observers ). 
 
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1  RECENT ANALYTICAL WO RK IN OECD  
1.1  Work on Trade -Related International Regulatory Co -operation of the Committees on 
Trade and Agriculture  
1.1.1   A Theoretical  Framework  
1.1.   The OECD Working Party of the Trade Committee (WPTC) has prepared a Theoretical 
Framework for Trade -Related International Regulatory Co -operation, in co -operation with the Joint 
Working Party on Agriculture and Trade (JWPAT). The report  is presently available on the OECD’s  
electronic information exchange system (OLIS) and will be formally published as an OECD Trade 
Policy Paper shortly.1 
1.2.  The report acknowledges that regulatory differences across trading partners can both create 
trade costs and hence reduce or hinder trade, and reflect differences in national regulatory 
requirements and preferences. Based on this dualism, the study conceptually analyses origins and 
options for reducing three different types of trade costs. These include specification costs (arising 
from adapt ing products and production processes to different requirements on export markets), 
conformity assessment costs (arising from needing to demonstrate that exported products comply 
with the destination country’s requirements), and information costs (arising from the need for 
firms to identify, gather and process information on the regulatory requirements for offering their 
products on the destination market).  
1.3.  While in some cases, regulatory co -operation can result in better regulation that are both 
more effec tive and efficient in achieving the intended regulatory outcomes and lower trade costs, 
domestic objectives may in other cases may need to be balanced against the benefit from 
enhanced international trade. Focusing on the analysis of such trade -offs, the F ramework 
distinguishes between a range of forms of IRC. These include the exchange of regulatory 
information; negotiations aiming to achieve regulatory convergence; recognition of equivalence in 
rules; the harmonisation or recognition of conformity assessm ent methods; enhanced flexibility 
and recognition of conformity assessment procedures; and the enhanced transparency in 
regulations.  
1.4.  Trade -related IRC is particularly important for new regulatory issues, for example related to 
emerging technologies. In con trast, the administrative and transitional costs can represent a 
significant obstacle for governments to changing long -established regulations, as they may offset 
potential gains from reduced trade costs.  
                                                
1 
http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=TAD/TC/WP(2016)12/FINAL&docLanguage=En  G/TBT/GEN/208  
 
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  1.5.   The report shows that, depending on the relative i mportance of trade costs and the domestic 
effects of regulatory changes, it may be in a country’s best interest to diverge from its preferred 
regulation as the reduced trade costs due to less regulatory heterogeneity across trading partners 
may outweigh ne gative domestic effects due to less -than-perfect achievement of the regulatory 
objective. Full knowledge about the regulations or regulatory preferences of the partner countries 
and the incorporation of this knowledge in the regulatory process generally pr omotes regulatory 
convergence, resulting in increased welfare. Greater gains are possible through negotiation 
processes to achieve further convergence. In some cases, the outcomes such negotiations may be 
even more beneficial if several regulatory issues a re discussed in conjunction, allowing for trade -
offs across countries.  
1.6.  Other factors being equal, smaller countries are more likely than larger ones to accept 
greater changes to their regulations. Reasons for this include the larger role that trade costs o ften 
play for smaller countries when compared to domestic regulatory effects, a possibly lower 
negotiation power of smaller countries and their easier compensation by bundling with other 
regulatory issues.  
1.7.  The recognition of equivalence in rules may be an option if different requirements are 
considered to achieve the same regulatory objectives. It allows maintaining existing regulations 
while avoiding resulting specification costs. Equivalency agreements are most likely in well -defined 
areas, such as organi c food, and between countries with similar regulatory approaches.  
1.8.  In the context of conformity assessment procedures, assessment methods should be based 
on evidence. Technical co -operation can help to identify most appropriate methods, and to 
harmonize met hods where possible.  Where diverging methods prove equally appropriate, mutual 
recognition of methods can reduce conformity assessment costs. When choosing conformity 
assessment systems, related trade costs need to be balanced with differences in confiden ce levels 
and perceived risks from non -compliant products entering the market. Products with a high 
damage potential generally make a more rigid conformity assessment system, although at higher 
costs for suppliers, preferable.  Co -operation can help to bui ld confidence in foreign conformity 
assessment infrastructures, potentially allowing for mutual recognition of conformity assessment 
procedures. For products with a low damage potential, cost -saving SDoC may be sufficient. Well -
functioning market surveilla nce can further reduce risks of non -compliant products; co -operation 
can both reduce costs and increase the efficiency of such market surveillance.  
1.9.  Reducing regulatory heterogeneity or the recognition of equivalence in rules generally help 
reduce regulatio n-related information requirements for suppliers and traders. In addition, 
dedicated communication and dissemination strategies can help to further reduce costs for 
accessing and processing the information required. Given the specific requirements of forei gn 
firms, such strategies particularly related to appropriate channels for making information available, 
and to the language of presenting the information.  
1.10.   Finally, effects of IRC outcomes on third -country trade need to be properly accounted for. 
Lower tra de costs generally divert imports away from third countries, potentially offsetting parts of 
the benefits arising from successful IRC. In addition, regulatory changes may increase or decrease 
trade costs between participating and third countries and affect  the welfare of both country 
groups. In particular, if IRC outcomes are non -discriminatory, e.g. in the case of improved 
transparency, trade costs with third countries may decline, with positive welfare effects on all 
sides.  
1.1.2   Trade costs in regulatory coope ration: Findings from case studies  
1.11.   Complementing the Theoretical Framework, work is under way investigating actual 
experiences with several IRC initiatives. The analysis employs a questionnaire addressed to 
governments participating in these initiatives, w hich range from the negotiation of organic 
equivalence arrangements to harmonisation of energy efficiency standards for household 
appliances and vehicles and related parts and equipment. Implementation is a precondition for IRC 
mechanisms to actually facil itate trade. Preliminary findings suggest that initiatives involving fewer 
countries and generating binding outcomes have a better chance to achieve this. Questionnaire 
responses confirm awareness of the different types of trade costs described in the Theo retical 
Framework, which governments tend to consider when engaging in IRC initiatives. Systematic G/TBT/GEN/208  
 
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  quantification of trade costs or the ex-post evaluation following up on the trade effects of IRC 
outcomes appear not to be common practice, however. Also, wh ile cost and burden reductions for 
producers, exporters and other stakeholders are widely reported, some countries also note 
increased costs and burdens for some stakeholders.   
1.12.   A final report on the case studies is expected for the first half of 2017.  
1.2  Work  on international regulatory cooperation under the OECD Regulatory Policy 
Committee  
1.13.   Work on international regulatory co -operation by the OECD Regulatory Policy Committee 
aims to provide practical guidance on how to implement principle 12 of The 2012 OECD 
Recommendation of the Council on Regulatory Policy and Governance .2  
1.14.   OECD (2013), International Regulatory Co -operation, Addressing Global Challenges  
(www.oecd -ilibrary.org/governance/international -regulatoryco -operation_9789264200463 -en) 
identified a typol ogy of 11 approaches to IRC. Recent work has deepened the understanding of 
how these a pproaches support IRC, focusing on:  
 The Contribution of Mutual Recognition to International Regulatory Co -operation , OECD 
Regulatory Policy Working Papers , No. 2  (2016)3 
 International Trade and Good Regulatory Practices: Assessing The Trade Impacts of 
Regulation , OECD Regulatory Policy Working Papers , No. 4 (2 016)4 
 The Role of International Organisations in Fostering Better Rules of Globalisation  (report to 
be launched on 2 November 2016 at the OECD Headquarters )5 
2  MEETINGS AND WORKSHO PS  
2.1  1st Joint Meeting of the Regulatory Policy Committee and the Trade Committee on 
Trade and International Regulatory Co -operation (5 November 2015)  
2.1.  Holding a joint meeting for the  first time, the Regulatory Policy Committee and Trade 
Committee discussed experiences and challenges with IRC and trade policy, including accounting 
for trade effects in regulatory assessments. The contributions from speakers are available on 
http://www.oecd.org/gov/regulatory -policy/internationalregulatoryco -operationandtradepolicy.htm  
2.2  2nd Joint Meeting of the Regulatory Policy Committee and the  Trade Committee on 
Trade and International Regulatory Co -operation (4 November 2016)  
2.2.  On 4 November 2016 the two committees will meet again to discuss how the evidence base 
on existing or potential trade costs caused by regulatory divergence could be stren gthened, and 
how different IRC approaches should be selected and tailored to effectively reduce heterogeneity -
related trade costs and to improve countries’ welfare in a specific country and sector context . 
2.3.  This second joint meeting will be the opportunity to discuss a new report International 
Regulatory Co -operation and Trade: Understanding the Trade Costs of Regulatory Divergence and 
the Remedies  synthesising work on IRC undertaken by the two committees. In particular, it brings 
together available evidence  on heterogeneity -related trade costs and on existing tools to assess 
them. It furthermore discusses the merits and challenges of different IRC approaches to address 
trade costs and improve countries welfare. The draft report is not yet publically availabl e. It will be 
revised based on the discussions at the joint meeting as well as on comments received from 
delegations. The report is expected for publication in early 2017.  
                                                
2 http://www.oecd.org/gov/regulatory -policy/2012 -recommendation.htm  
3 http://www.oecd.org/gov/regulatory -policy/WP2_Contribution -of-mutual -recogn ition-to-IRC.pdf  
4 http://www.oecd -ilibrary.org/governance/international -trade-and-good-regula tory-
practices_5jlv59hdgtf5 -en;jsessionid=1km1c1y879l97.x -oecd-live-03 
5 http://www.oecd.org/gov/regulatory -policy/international -organisations -and-role-in-irc.htm  G/TBT/GEN/208  
 
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  Contacts:  
For the Trade Committee: Barbara Fliess (Email: barbara .fliess@oecd.org ).  
For the Regulatory Policy Committee: Céline Kauffmann (Email: celine.kauffmann@oecd.org ) 
 
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