G/SPS/GEN/1562  
 
30 June 2017 
(17-3534) Page: 1/2 
Committee on Sanitary and Phytosanitary Measures  Original: English  
 
UPDATE ON OECD ACTIV ITIES OF INTEREST TO  THE SPS COMMITTEE  
COMMUNICATION FROM T HE OECD  
The followi ng communication, received on 29 June 2017, is being circulated at the request of the 
OECD . 
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RECENT WORK ON TRADE -RELATED INTERNATIONA L REGULATORY CO -OPERATION BY 
THE OECD TRADE COMMI TTEE AND THE OECD RE GULATORY POLICY COMM ITTEE  
1.  Building on OECD’s Council Recommendation on Regulatory Policy and Governance (OECD, 
2012) and s ynthesising recent work in trade -related IRC undertaken by the OECD Trade 
Committee (notably von Lampe et al., 2016, and OECD, forthcoming) and the OECD Regulatory 
Policy Committee (see for instance OECD, 2013; Basedow and Kauffmann, 2016; Correia de Brito  
et al., 2016), the OECD has published a new report, International Regulatory Co -operation and 
Trade: Understanding the Trade Costs of Regulatory Divergence and the Remedies  (OECD, 2017).  
2.  Regulatory differences across jurisdictions can be costly for trader s. While these costs may 
reflect variations in domestic conditions and preferences, they may also be the result of rule -
making processes working in isolation and of a lack of consideration for the international 
environment. Thus, some of the trade costs of  regulatory divergence may be avoided without 
compromising the quality of regulatory protection. Building on lessons learnt from OECD analytical 
work and the experiences of OECD countries in regulatory policy and trade, this report proposes a 
definition of  trade costs of regulatory divergence and analyses various approaches to addressing 
them, including unilateral, bilateral and multilateral approaches. It focuses on the contribution of 
good regulatory practices, the adoption of international standards, and  the use of cross -border 
recognition frameworks and trade agreements. Based on this, the report provides indications for 
policy makers on how to reduce trade costs through international regulatory co -operation.  
3.  Key message of the report include:  
 Understand ing the trade costs of regulatory differences and addressing them through 
international regulatory co -operation is a topical issue. Recent international trade 
negotiations therefore put an emphasis on promoting greater interoperability for 
businesses opera ting in countries with varying regulatory requirements;  
 Trade costs may arise from unintended regulatory heterogeneity across jurisdictions, 
including information, specification and conformity assessment costs. Evidence on the 
magnitude of these trade cost s remains scarce, although costs are likely to vary 
significantly in size and composition by sectors. Greater understanding of the trade costs 
of regulatory divergence could usefully inform the rule -making process. Regulatory impact 
assessments (RIA) provi de a useful ve hicle for this;  
 Policy makers can draw from a wide range of approaches to address the trade costs of 
regulatory divergence, including unilateral, bilateral and multilateral. This report draws a 
preliminary list of considerations to reduce trade costs through IRC. It both identifies the 
generic measures that countries can take that promote regulatory quality and trade, and 
highlights the considerations that can drive the selection of specific IRC approaches.  
4.  The report is accessible at http://dx.doi.org/10.1787/9789264275942 -en. G/SPS/GEN/1562  
 
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  References:  
 Basedow, R. and C. Kauffmann  (2016), "International Trade and Good Regulatory Practices: 
Assessing The Trade Impacts of Regulation", OECD Regulat ory Policy Working Papers , No. 4, 
OECD Publishing, Paris, http://dx.doi.org/10.1787/5jlv59hdgtf5 -en. 
 Correia de Brito, A., C. Kauffmann and J. Pelkmans (2016), "The contribution of mutual 
recognitio n to international regulatory cooperation" , OECD Regulatory Policy Working Papers , 
No. 2, OECD Publishing, Paris, http://dx.doi.org/10.1787/5jm56fqsfxmx -en. 
 OECD (forthcoming), "Trade Costs in Regul atory Co -operation: Findings From Case Studies". 
Publication expected in Q3 2017.  
 OECD (2017), International Regulatory Co -operation and Trade: Understanding the Trade 
Costs of Regulatory Divergence and the Remedies , OECD Publishing, Paris, 
http://dx.doi.org/10.1787/9789264275942 -en.  
 OECD (2013), International Regulatory Co -operation: Addressing Global Challenges , OECD 
Publishing, Paris, http://dx.doi.org/10.1787/9789264200463 -en.  
 OECD (2012), Recommendation of the Council on Regulatory Policy and Governance , 
http://www.oecd.org/governance/regulatory -policy/4999 0817.pdf .  
 von Lampe, M., K. Deconinck and V. Bastien (2016), "Trade -Related International Regulatory 
Co-operation: A Theoretical Framework", OECD Trade Policy Papers , No. 195, OECD 
Publishing, Paris, http://dx.doi.org/10.1787/3fbf60b1 -en. 
 
Contacts:  
Martin von Lampe (E -mail: martin.vonlampe@oecd.org ) 
Céline Kauffmann (E -mail: celine.kauffmann@oecd.org ) 
 
 
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