WORLD TRADE  
ORGANIZATION  G/TBT/W/317 
15 June 2009 
 (09-2906) 
Committee on Technical Barriers to Trade Original:   English 
  
 
THE IMPORTANCE OF REGULATORY COOPERATION FOR IMPROVING 
GOVERNMENTS’ ABILITY TO FULFIL LEGITIMATE POLICY OBJECTIVES WHILE 
FACILITATING TRADE: THE NORTH AMERICAN EXPERIENCE  
 
Communication from Canada, Mexico, and the United States
 
 
  The following communication, dated 8 June 2009, is  being circulated at the request of the 
delegation of the United States
. 
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I. INTRODUCTION 
1. Effective integration of global markets not onl y requires the elimination of tariff duties but 
non-tariff barriers as well, including where possible, th e elimination of undue diffe rences in standards, 
technical regulations, and conformity assessment procedures. 
2. In 1999, an OECD study referenced an estimat e that 80 percent of trade is affected by 
standards or associated technical regulations.1 An empirical study completed by trade economists in 
2004 estimated that the global gains from the removal of non-tariff barriers could be in excess of $90 
billion.2  Thus, we believe that the use of regulatory cooperation to reduce such barriers is critical.3 
3. While recommending the implementation of regul atory cooperation mechanisms as a means 
for facilitating trade, it is important to bear in mind that there is no “one size fits all” approach.  In 
other words, there are many ways and degrees to achieve regulatory cooperation among trading 
partners: from information-sharing to harmonization of standards and regulations, to equivalence and 
mutual recognition agreements.  Some of these different  approaches are reflected directly or indirectly 
in Articles 2.4, 2.6, 2.7, 2.8, 3.4, 5.4, 6, and 9 and Annex 3 of the Agreement on Technical Barriers to 
Trade (TBT Agreement). 
II. BACKGROUND 
4. In the Fourth Triennial Review, Members noted that: 
“Regulatory cooperation between regulators from different Members, whether informal or 
formal in nature, and including training activ ities, can help achieve a better understanding of 
                                                      
1 OECD, Regulatory Reform and International Standardization , TD/TC/WP (98) 36, January 1999. 
2Andriamananjara, S., et al. (2004 ), “The Effects of Non-Tariff Measures on Prices, Trade, and 
Welfare: CGE Implementation of Policy-Based Pri ce Comparisons,” U.S. International Trade Commission 
(USITC), Office of Economics Working Paper EC2004-04-A, Washington, D.C.: USITC, p. 18. 
3 Enhancing Competitiveness in Canada, Mexico, and the United States: Private-sector Priorities for 
the Security and Prosperity Partnership of North America (SPP) , Initial Recommendations of the North 
American Competitiveness Council, February 2007, p. 29. G/TBT/W/317 
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  different regulatory systems and approaches to  addressing identified needs.  Furthermore, it 
can promote regulatory convergence, harmoniza tion, mutual recognitio n and equivalency, 
thereby contributing to the avoidance of u nnecessary regulatory differences and to the 
reduction of unnecessary barriers to trade.”
4  
 
Further, Members agreed to share experiences on “how regulatory cooperation between Members has 
contributed to the avoidance of  unnecessary regulatory differences.”5  It is in that context that Canada, 
Mexico, and the United States have prepared th is paper for discussion by the Committee.   
 5. In 1993, the three countries signed the Nort h American Free Trade Agreement (NAFTA), 
which took the region to the leading edge of trade and investment liberalization globally. The result 
has been hugely positive for all three countries.
  Since its implementation, annual trade between the 
three countries has gone from $297 billion to $810 billion.6  Our countries now conduct $2.2 billion in 
trade every day.7  Economic growth in all three countries has also been robust, with the real gross 
domestic product (GDP) rising over this period by 40  percent in Mexico, 48 percent in the United 
States, and 49 percent in Canada.8   
6. However, despite this impressive growth in trade, non-tariff barriers affect approximately 
$715 billion of North American trade.9  In order to address such barriers, Canada, Mexico and the 
United States have long acknow ledged the positive effects of improved trilateral regulatory 
cooperation, which acts to lower costs for Nort h American businesses, producers, governments and 
consumers; maximize trade in goods and services acr oss North American borders; and protect health, 
safety, and the environment.    
7. Trilateral regulatory cooperation has taken many forms over the years, either in a regulator-
to-regulator format or within a more structured  framework. The best know n of these frameworks is 
the NAFTA which, since 1993, has offered a foru m for cooperation in several specific areas, 
including pesticides, agriculture, automotive goods , and telecommunications.  More recently, in 
March 2005, the Leaders of Canada, Mexico a nd United States launched a Regulatory Cooperation 
Framework (RCF) within the context of the Security  and Prosperity Partners hip of North America, 
with three general goals:  
(a) To strengthen regulatory cooperation, incl uding at the outset of the regulatory 
process;  
(b) To streamline regulations and regulatory processes; and 
(c) To encourage compatibility of regulations, promote the use or adoption of relevant 
international standards in regulations , and eliminate redundant testing and 
certification requirements, consis tent with our WTO obligations. 
8. Sections C and D of this paper set out so me examples of regulatory cooperation under 
NAFTA, the RCF, and other fora.  In Section E, we  attempt to draw some  conclusions from these 
activities and provide recommendations to the Co mmittee for further work in this area.   
                                                      
4 Fourth Triennial Review of the Operation an d Implementation of the Agreement on Technical 
Barriers to Trade Under Article 15.4, G/TBT/19, 14 November 2006, para. 18. 
5 Id. at para. 19(h). 
6 Enhancing Competitiveness in Canada, Mexico, and the United States , February 2007, p. 12. 
7 Ibid. 
8 Ibid. 
9 Chen Maggie Xiaoyang, Tsune Otsuki, John S. Wilson, “Do Standards Matter for Export Success?” 
Policy Research Working Paper 3809, World Bank, Washington, D.C., 2004  G/TBT/W/317 
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  III. REGULATORY COOPERATION ON SYSTEMIC ISSUES 
A. COMMON REGULATORY PRINCIPLES AND BEST PRACTICES  
9. Under the RCF, Canada, Mexico, and the United States agreed to a set of common regulatory 
principles to guide North American re gulators during regulatory development.10  These common 
principles are rooted in WTO rules and mirror closely OECD principles.  They include minimizing 
the adverse impact of regulations on fair a nd competitive market economies; minimizing unnecessary 
duplicative requirements within North America; identifying alternatives to addressing a regulatory 
need, including non-regulatory options; and ensuring transparent regulatory development and implementation.  In light of these principles, Ca nada, Mexico and the United States established a list 
of illustrative best practices that provide concrete guidance, in each of the three countries, on how to 
achieve our common principles.
11  These best practices encompass government efforts to streamline 
the regulatory process, increase the use of regulat ory impact assessment, and improve transparency 
through effective consultations throughout the process.   
B. RISK IMPACT ANALYSIS  
10. Under the RCF, Canada, Mexico , and the United States also established a trilateral forum on 
Regulatory Impact Analysis (RIA), which brings together regulatory policy experts from the three 
countries to strengthen collaboration on procedur es, practices, and tools which underpin new 
regulatory proposals.  In 2008, this forum undertook a trilateral review of an existing U.S. Department 
of Transportation RIA on electronic stability contro l for motor vehicles, allowing Canada and Mexico 
the opportunity to provide comments on the U.S. analysis.  This joint pilot project also allowed representatives from regulatory agencies and depart ments, as well as representatives from central 
agencies responsible for regulatory policy in the three countries, to discuss the similarities and 
differences of the regulatory analytical requireme nts and the methodology used in each country.  The 
joint analysis was very instructive and will be replicat ed in the future.  We believe that such analytical 
work and dialogue are key for the development of compatible approaches to technical regulations. 
IV. REGULATORY COOPERATION ON SECTOR-SPECIFIC ISSUES 
A. F
OOD AND AGRICULTURE  
11. In the food and agricultural sector, Canada , Mexico, and the United States have been 
cooperating for many years to improve sector-relate d regulations and practices.  NAFTA technical 
working groups (TWGs) have been established fo r issues such as food labelling and packaging, and 
TWGs and forums such as the North American Bi otechnology Initiative play a significant role in 
regulatory cooperation in this sector.  In these TW Gs and other forums, Canada, Mexico, and the 
United States have collaborated on numerous  regulatory projects.  For example: 
(a) Laboratories:  We have enhanced food laborat ory cooperation between the three 
countries by: (1) establishing a procedur e/mechanism to share information on 
laboratory methods, and (2) exchanging info rmation on proficiency testing programs 
in each country, and identifying gaps where programs are not available. 
(b) Nutritional labelling:  The three countries have agreed on a harmonized approach to 
the scientific basis used to update dietar y reference values for the labelling of food 
products. 
                                                      
10 See http://www.spp.gov/docs/RCF_Common_Regulatory_Principles_Inventory_Best_Practices_  
FINAL.doc  
11 Ibid. G/TBT/W/317 
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  12. Bilateral work in this sector also continues.  For example: 
(a) Organic products:  Negotiations between Canada and the United States to reach an 
equivalency agreement on organic requirement s began in February 2008, and the goal 
for both countries is to complete the negotiation as soon as possible. 
(b) Tequila:  The United States and Mexico concl uded an Agreement on Trade in Tequila 
in January 2006.  The Agreement establishe d a set of rights and obligations for the 
parties to protect tequila as a distinctiv e product of Mexico and to minimize barriers 
to the export of tequila to the United Stat es. The Agreement also created a Working 
Group on Tequila in which representatives of  the relevant agencies in the United 
States and Mexico monitor the implementation of the agreement and exchange information and statistics on tequila trade.   
B. A
UTOMOBILES  
13. Canada, Mexico, and the United States are undert aking several joint activities with the goal of 
reducing air pollution and greenhouse gas emissions from vehicles and engines and ensuring that 
significantly cleaner vehicles and fuels are market ed throughout North America while enhancing 
regulatory cooperation among the three countries.  
(a) We have shared information on policies and programs on vehicle fuel efficiency, 
standby power consumption, and the poten tial for natural gas to support optimal 
energy use for the future.  
(b) We undertook a comprehensive analysis of  various emissions inventories among the 
three countries to prepare a trilateral strategy to achieve comparability.  
(c) Additional candidate areas for cooperation coul d include such things as the exchange 
of information on vehicle and engine tes ting, as well as sharing information on the 
development and use of voluntary partners hips for in-use fleet emission reductions.  
This initiative will be an iterative process of  engagement and will build upon existing 
formal and informal mechanisms.  For ex ample, the U.S. EPA hosted a workshop in 
Washington in June 2008 to share informa tion with Canadian fe deral and provincial 
government representatives on strategies a nd approaches to reduce emissions from 
heavy duty vehicles that are already on the roads; and EPA hosted the Border 2012 
Air Policy Forum (APF) meeting with Mexico in San Diego, California in July 2008, 
to adopt an emissions reduction strategy , which includes approaches specific to 
vehicle emissions in the Border States.  EPA is currently undertaking a feasibility 
study on incorporating anti-idling mechanis ms in the plans for a new border crossing 
near San Diego, which will be presented at  the August Border 2012 APF meeting in 
Monterrey, Nuevo León, México.  Simu ltaneously, EPA has begun discussions with 
the U.S.  Departments of State, Trans portation, Homeland Security, and Commerce 
with regard to anti-idling options for the new crossing.  EPA is conducting and 
supporting numerous other transportation emissions reduction projects, including 
diesel retrofits, along the border as part of the Border 2012 APF Strategy. 
(d) Finally, the National Research Council Ins titute for National Measurement Standards 
(NRC-INMS) and the Mexican Ministry of  Environment and Natural Resources 
(SEMARNAT) will exchange information on advanced techniques for measuring 
automotive air emissions such as carbon dioxide, carbon monoxide, nitrogen oxides and unburned hydrocarbons with the U.S.  National Institute of Standards and 
Technology (NIST).  NIST and NRC-INMS have also agreed to an exchange of visits, and NIST gas analysis experts vis ited the Environment Canada Environmental  G/TBT/W/317 
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  Science and Technology Centre (EC-ESTC) labs in November 2008 to exchange 
information on measurement techniques.  
C. CHEMICALS  
14. Canada, Mexico, and the United States have deve loped a trilateral approach to fully apply the 
results of ongoing efforts to assess, prioritize, a nd take action on existing chemicals in the United 
States, Canada’s Chemicals Management Plan, upd ated information on inventories, and Mexican 
efforts to develop a chemical inventory and impl ement international objectives, to achieve the 
following by 2020: 
(a) establishing or updating inventories of chemi cals in commerce in a ll three countries;  
(b) enhanced capacity in Mexico to assess and manage chemicals; and 
(c) sound management of chemicals in North America as articulated by the World 
Summit on Sustainable Development Joha nnesburg Plan of Implementation and 
reinforced by the Strategic Approach to International Chemicals Management. 
These efforts will contribute to improving our hea lth and environmental protection programs through 
a practical and focused approach to strengthen chemical management in North America over the long 
term.   
 
D. ENERGY  
15. In July 2007, the three countries reached a trilateral agreement on energy science and 
technology – a framework designed to stimulate innova tion and to share and help build capacity in all 
three countries.  Ministers emphasized that develo ping cleaner and more efficient ways to produce 
and use conventional energy and advancing ou r knowledge of renewable energy, science and 
technology were fundamental to increasing ener gy security, sustaining economic prosperity, and 
protecting the environment, and that greater regul atory cooperation increased the potential return on 
investment in energy science and technology.   
16. In the area of energy efficiency standards, three energy performance standards have been 
harmonized across the three countries: freezers and refrigerators, three-phase motors, and room air 
conditioners.  The new suite of products was assessed  under the new framework to systematize energy 
efficiency harmonization between the three countries.   Workshops have also been held on Standby 
Power and Transportation Efficiency.  There is also a commitment to further align energy efficiency 
standards on key consumer products , and agreements to identify specific ways to increase cooperation 
on research and development and reduce barriers to deployment of new technologies in a wide variety 
of areas, including biofuels, gas hydrates, hydrogen, carbon capture and storage, clean coal, and 
electricity transmission. 
17. We have also road tested emissions esti mation methodologies for nine energy generating 
facilities to improve and harmonize emissions calculati ons in the energy power sector and provide the 
basis to populate and update power sector emissions inventories.  
18. In short, the NAFTA approach to regulat ory cooperation emphasizes the importance of 
regulatory convergence (including reduction of regulatory inconsistenc ies and redundancies), 
administrative simplification, and the use of practical , science- and risk-based tools, to attain critical 
health, safety, environmental, and security goals in the least trade-restrictive manner possible.  Such 
an approach enables the NAFTA partners to effec tively attain their legitimate regulatory objectives in 
a manner that reduces rather than increases the bur den on businesses and international trade.   G/TBT/W/317 
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  V. CONCLUSIONS AND RECOMMENDATIONS  
19. The cooperative activities illustrated in this pape r demonstrate the wide variety of approaches 
that can be employed by regulators to collaborate with each other -- from simple information sharing 
to negotiating equivalency agreem ents, always bearing in mind their obligations under the WTO TBT 
Agreement.  The appropriate approaches in any given situation will necessarily differ based on a 
number of factors.  The availability of resources, the degree of regulation already in place, and the 
level of technical and institutional capacity in each country are factors to consider.  Canada, Mexico, 
and the United States are cooperating and coordinatin g successfully, taking into account these types of 
constraints, in the context of North American re gulatory cooperation activities.  We believe that our 
efforts have provided substan tial benefits to regulators, suppliers, and the public.   
20. For regulators, cooperation has improved access to shared information and to alternative 
approaches to addressing common problems and obj ectives.  In some cases, cooperation has 
economized on critical staff time and resources, and enabled more rapid responses when regulatory action is needed.  Regulatory cooperation also has enabled trade facilitation to be a key factor in 
evaluating alternative approaches to achieving leg itimate policy objectives.  For example, sharing 
international best practices through regulatory foru ms has provided global be nefits in terms of 
opportunities to improve product safety, as well as co nsumers’ confidence in products, their national 
regulators, and the global trading system.    
21. In addition to leading to better regulations in North America, cooperation has reduced the 
costs of suppliers of dealing with unnecessary divergences in regulations.  Harmonizing divergent 
regulatory approaches designed to achieve the sa me objective, while not lowering the level of 
protection of, e.g., the environment, health and safety, and consumers, simplifies the compliance 
process for suppliers.  This will enable suppliers w ith operations located both inside and outside North 
America to reduce their costs of regulatory compliance, generate gr eater economies of scale, increase 
sales, and pass on cost savings to consumers.   
22. Regulatory convergence is especially beneficial  for small and medium sized enterprises 
(SMEs).  SMEs, which account for tens of millions of jobs in North America and are a major source 
of innovation, necessarily devote a larger percen tage of their operating budgets to regulatory 
compliance than do large enterprises, so they are particularly impacted by having to comply with a 
multitude of regulations across different jurisdictions.  
23. The North American economic integration ach ieved through NAFTA over the past decade 
and a half has brought significant benefits to our citizens.  Canada, Mexico, and the United States 
believe that our regulatory cooperation efforts have been an effective catalyst for achieving a more 
fully integrated North America market, and we in tend to apply the lessons learned from our NAFTA 
efforts in other sectors.  We invite other Members who have an interest in regulatory cooperation in 
any of the areas set out in this paper (or in other areas , for that matter) to discu ss that interest with our 
delegations.   
24. We also recommend that the Committee invite  other Members to share their views and 
experiences on regulatory cooperation, with the goa l of identifying areas where WTO Members can 
work together to achieve convergence on well-crafte d, risk- and science- based, non-discriminatory, 
and transparent, regulatory approaches, with a goa l of harmonization where possible.  We recommend 
that the Committee hold a Workshop on Regulatory C ooperation to facilitate this information-sharing 
process. 
 
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