WORLD TRADE  
ORGANIZATION  G/TBT/GEN/48 
23 April 2007 
 (07-1665) 
Committee on Technical Barriers to Trade Original:   English 
  
 
UPDATE ON OECD ACTIVITIES IN THE AREA OF  
GOOD REGULATORY PRACTICE AND MARKET OPENNESS 
 
 
 The following statement was provided by th e Organisation for Economic Co-operation and 
Development (OECD)  at the TBT Committee meeting of 21 March 2007 under Agenda Item 2(c) 
(Exchange of Experiences on Good Regulatory Practice). 
 
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1. An efficient and transparent regulatory sy stem can have positive effects on trade and 
investment flows. It is accepte d that countries have the right to set their own domestic regulatory 
objectives; however evidence suggests that regulat ory requirements of individual economies, and 
differences in the requirements between economies, may in some circumstan ces impede gains from 
trade liberalization. 
2.  OECD has played a key role in promoti ng efficient regulation through regulatory reform. 
One major approach to this has been to carry out assessments of country policies and practices of its 
member economies and develop guidance to improv e regulatory policies and tools that strengthen 
market openness and competition and reduce regulatory bu rdens. It has also looked at the role of good 
regulatory practice in helping fac ilitate adaptation to internationa l competition and technological 
change. Also, OECD and APEC have collaborated in  promoting efficient regulation, e.g. through the 
APEC-OECD Integrated Checklist on Regulatory Reform.  This work has been reported to this 
Committee in the past. 
3. Because policymakers pay increased attention to the complementarities and 
interconnectedness between domestic regulatory reform and market openness and there is 
considerable interest in “good regulatory practice”,  OECD last year launched work identifying and 
documenting practices across OECD to understand bette r regulatory processes, tools and policies that 
support market openness.  The first report1 in this project is available on the OECD website 
http://oecd.org/tad.  
4. The analysis shows that, while the elaboration of a market openness assessment toolkit is 
still in the early stages, a number of promising approaches have come out. OECD governments have 
adopted a range of general regulatory tools and a pproaches in support of market openness, including 
regulatory impact assessment, transparency and consultation, performance-based requirements and 
regulatory cooperation initiatives.  
5. Regulatory impact assessment  is the best known and most widely implemented tool 
among OECD governments. However, of the countries studied, only two appear to require explicit 
                                                      
 1 David Shortall, Regulatory reform and market openness: pr ocesses to assess effectively the trade and 
investment impact of regulation . OECD Trade Policy Working Paper No. 48, 2007. G/TBT/GEN/48 
Page 2  
 
  consideration of the impact on international trade in the conduct of impact assessment.  Most of the 
countries use the more indirect and less rigorous approach of assessing the effect of a potential regulation on competition and business, at least for ma jor regulations.  Efforts are required to ensure 
that guidance documents and other tools designed to  assist regulators in undertaking regulatory impact 
assessment incorporate reference to the impact on in ternational trade and specifically to international 
trade obligations related to the WTO.  Regulatory impact assessment is still a relatively new concept 
in developing countries.  
6. With respect to transparency and consultation  most WTO members have a mixed record 
in meeting the comment period for notification of dr aft technical regulations.  While most countries 
have established policies for prior consultati on and openness to comments by foreign based 
regulators, including public disclosure of regulatory impact proposals, more needs to be done to 
establish websites and other tools to help ensure  that comments are shar ed among all interested 
parties.  Codes of practice and guidance documen ts on the consultation process which have been 
implemented by some countries are important tools which others may emulate in the way of best 
practices.  
7. While the simplification of administrative bur dens particularly on small and medium sized 
enterprises is a key element of regulatory reform, very few national policies or programmes address 
this point.  
8. Establishment of performance-based requirements  as an alternative to prescriptive 
measures is considered one of the principal elem ents of good regulatory practice. However, the 
research showed that only in a few regulatory impact assessment models are regulators required to 
consider performance or non-prescriptive outcomes in designing regulation. There is also little 
evidence of the application of such measures. So me countries provide examples of alternatives to 
prescriptive measures and how they can be im plemented. These commonly include voluntary 
measures, including standards.  More research is needed on the range of tools and instruments, including sectoral applications, which can be used as an alternative to prescriptive regulation and how 
to ensure that such measures are considered in impact assessment. 
9. Bilateral regulatory cooperation  initiatives represent the newest element in regulatory 
activity at the international level. A number of bilateral initiatives have been launched, primarily 
among G7 members.  While largely informal exer cises focussed on information sharing on national 
regulatory regimes and best practices, these initia tives offer the promise of increased regulatory 
harmonization and compatibility, leading to the re duction of regulatory- based trade barriers.  
10. There are other strategies for ensuring a regulat ory environment supportive of market 
openness .  
11. Formal procedures at the domestic level to  implement international trade obligations 
represent the primary commitment of governments in observance of trade rules.  A key tool for the 
formal recognition of such commitments is the st atement on implementation of the TBT Agreement.  
12. The adoption of international standards  is both the principal tool for regulatory 
harmonization and a key factor for facilitating trade. However, outside the WTO SPS Agreement there are no mechanisms to monitor the domestic adoption of international standards, guides and 
recommendations.  
13. A related issue is the lack of evidence of an y distinct policies with respect to incorporation 
of international standards into na tional legislation.  A major constraint to the wider adoption of 
standardization by regulators is the shortage of pr omotional tools and guides to  assist regulators. This 
requires greater cooperation between governments,  national standards bodies and international  G/TBT/GEN/48 
 Page 3 
 
 
  standards bodies in order to develop the appropriate tools.  National data bases of both standards and 
standards referenced in regulations are also im portant factors in the adoption of standards by 
facilitating regular revision and updates and increasing knowledge of  foreign market requirements. 
14. Much attention, including in the TBT Co mmittee, has focussed on the streamlining of 
conformity assessment procedures in the contex t of market openness policies. Although a large 
number of MRAs  have been implemented in recent years, primarily among OECD countries, they 
have proven to be complex to negotiate and difficu lt and costly to implement and are now seen to 
have limited value as tools to facilitate trade. Ac creditation-based mutual recognition agreements have 
spread but recognition of these schemes by regulators is presently limited.  With the decline in the 
relative importance of government-to-government MRAs private arrangement s between conformity 
assessment bodies (such as the IECEE CB Scheme) may benefit from greater regulatory acceptance. 
Adoption of supplier declaration of conformity (S DoC) has largely been limited to products of 
relatively low risk, with few countries adopting SDoC as the basis for national policy on conformity assessment. Finally, the acceptance of the equivalency of foreign measures is also considered to be an 
important element of good regulatory practice. Howe ver, there has been little progress in applying the 
concept of equivalency in domestic regulatory regimes and a focus on identifying criteria and 
principles of good practice could lead to a better understanding of how equivale ncy can be applied in 
practice 
15. Effective coordination and cooperation between  officials at the national and sub-national 
level is a well established principle of good regu latory practice. A number of countries have 
established inter-departmental committees or statutory bodies to review regulatory policies and 
initiatives and oversee implementation of the WTO Agreements, notably the TBT and SPS 
Agreements.  This area is not we ll understood and there appears to be  little data relate to cooperation 
and coordination between national and sub-national jurisdictions. 
16. The next phase of the OECD project  will review and discuss processes and tools that may 
appear particularly promising in the context of developing economies.  This may include processes 
and tools for ensuring a market openness friendly re gulatory environment that are less demanding in 
terms of institutional capacity; as well as strategies  and approaches for enhancing such institutional 
capacity to the required level.  It will draw not  only on the experience of OECD countries (certain 
patterns of which may be difficult to transpose or ar e even irrelevant in the context of less developed 
countries) but also on the experience of major develo ping countries, such as Brazil, Russia, India and 
China.  
17. Research and analysis will go beyond reviewi ng what is provided in the country's applicable 
laws and regulations to investigate actual implem entation of these provisions, as well as other relevant 
practices in the field. The purpose will be to highlight not only good practices but also shortcomings and challenges and seek to understand the factors that  may influence success or failure. Based on this 
analysis the study will then propose more genera l reflections on regulatory processes and market 
openness in developing countries.   
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