WORLD TRADE  
ORGANIZATION  G/TBT/W/264 
13 March 2006 
 
 (06-1094) 
Committee on Technical Barriers to Trade Original:   English 
  
 
 
ADVANCING THE DISCUSSION OF INSTRUMENT CHOICE UNDER GOOD 
REGULATORY PRACTICE 
 
Submission by Canada
  
 
 
 The following communication, dated 10 March 2006, is being circulated at the request of the 
Delegation of Canada . 
  
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  I. BACKGROUND 
1. Although the Technical Barriers to Trade Agreement does not provide particular disciplines 
with respect to good regulatory practice, there ha s been considerable discussion in the Committee on 
the relationship between domestic regulatory polic y and the effective implementation of the TBT 
Agreement.  In the First Triennial Review (G/TBT /5), the Committee noted in paragraph 23 that good 
regulatory practice for the preparation, adoption and a pplication of technical regulations was a priority 
for Members in order to facilitate trade.  The Committee noted that regulations should be adopted 
only where necessary, should be limited in scope to  specific requirements and should be aligned with 
international standards.  Further, the Committee agreed in paragraph 24 that, having identified a 
problem, Members should "consider all options availa ble consistent with the Agreement", bearing in 
mind particularly the provisions of Articles 2.2 and 2.3 with respect to least trade restrictiveness. 
2. During the Second Triennial Review (G/TBT/9),  the Committee noted in paragraph 33 further 
benefits associated with minimising the use of technical regulations a nd utilising international 
standards, where appropriate, since to do so could reduce the regulatory burden and open-up market 
access opportunities. 
3. During the Third Triennial Review (G/TBT/13), in paragraph 14, the Committee stated that 
the issue of good regulatory practice was important, evolving and worthy of further discussion in the 
Committee.  The Committee agreed to further focus its discussion on, inter alia, choice of policy 
instruments, mandatory versus voluntary measures a nd the use of regulatory impact assessments to 
facilitate good regulatory practice. 
4. Since the last Review, the Committee has been  able to conduct only a limited amount of 
discussion related to good regulatory practice.  Much of the discussion has centred on a small number 
of very informative Members’ experience papers. G/TBT/W/264 
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  II. CONSIDERATIONS 
5. Instruments for government action are the means a government has at its disposal to achieve 
public policy outcomes.  Instruments for government action set up relationships between the state and its citizens.  In cases such as criminal law, the relati onship is of a coercive nature.  In other cases, the 
relationship is reciprocal. 
6. The Organisation for Economic Cooperati on and Development (OECD) has conducted 
considerable work in the area of promoting regulat ory reform and good regulatory practice.  In OECD 
work, regulation refers to the diverse set of in struments by which governments set requirements on 
enterprises and citizens.  Regulations include laws, formal and informal orde rs and subordinate rules 
issued by all levels of government and rul es issued by non-governmental bodies to which 
governments have delegated regulatory powers.
1  
7. A broad spectrum of instruments for governme nt action exists for advancing government 
policy, allowing a government to choose the type a nd degree of intervention, if any.  Choosing an 
instrument, or more importantly the appropriate mix of instruments, involves selecting the tools that are most likely to achieve the public policy objectiv e at hand on a sustained basis and at an acceptable 
cost. 
8. Some well-known instruments which can be used sing ly or in combination are:  laws (statutes 
and regulations);  economic instrume nts, including taxes, fees, user ch arges, loan and loan guarantees 
and public expenditure;  public ownership;  form s of self-regulation, including regimes operating 
within a framework of legislative authority;  standard s and other forms of voluntary action;  contracts;  
information and education;  insurance schemes;  a nd, collaborative/consensual approaches, including 
formalized partnerships and less formalized networks.   
9. Regulation is one of the most important instruments used by  government.  Many governments 
are, however, increasingly considering instruments other than regulation to achieve public policy 
outcomes.  They are seeking new or modified instru ments that provide more market-based approaches 
to policy making. 
10. In the regulatory area, concerns about the ne gative impacts of conventional laws on industry 
innovation and competitiveness have motivated government s to look to other forms of laws, such as 
Performance-based Regulation (PBR).  PBR sets the objective to be met rather than prescribing the 
means to achieve it.  The European Union’s Ne w Approach is perhaps the best known example. 
11. The analogy between tools in a toolbox and instru ments in a government’s toolkit is a useful 
one.  If there is only a hammer to work with, the hammer will be used for everything one does.  If 
legislation is the only tool a government uses, it will deal with every public issue by passing yet 
another law or regulation. 
III. CANADA’S RECENT EXPERIENCE 
12. In Canada’s experience, there should be a fo cus on achieving a desired outcome, rather than 
assuming a particular instrument, for example a law or regulation, is the most appropriate means to be 
used by the government to intervene.  A numbe r of TBT Committee Members, including Canada, use 
regulatory impact assessment as a practical tool to  facilitate regulatory decision-making.  Canada’s 
Regulatory Impact Assessment Statement (RIAS) pr ovides a framework for answering questions such 
as:  Does the problem justify government interven tion (identifying risk dynamics is a key element)?  
                                                     
 
1 OECD Report on Canada:  Maintaining Leadership Through Innovation, 2002.  G/TBT/W/264 
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  If so, is regulation the most effective and effi cient means of government intervention given the 
desired policy goals and outcomes?  
13. Currently, several documents provide directi on and guidance on selecting instruments at the 
federal government level.  Canada is now undergoing a substantive review of regulatory policy at the 
federal level, including a review of instrument c hoice guidance documents, which has been noted by 
Canada in the March 2004 meeting of the Committee (re ferred to by Canada as "Smart Regulation").  
Canada intends to report to the Committee later th is year on progress being ma de to develop a policy 
framework for instrument choice. 
14. Canadian officials are in the process of identif ying an analytical framework to facilitate a 
disciplined approach to assessing, selecting and impl ementing instruments, including regulations and 
standards.  The framework that is under developm ent is based on two overarching rationales:  the 
process of analysing a problem and the considera tion of means by which the government could take 
action is iterative or repetitive.  Thus, the accumu lation of information and knowledge concerning a 
problem or situation and the objectives which the government is aiming to achieve will require 
officials to repeatedly revisit each  of the steps in the framework. 
15. In light of the foregoing, ongoing consultations w ith key actors and institutions are crucial.  
Consultations not only improve the government’s instrument selection capacity.  They also work to 
increase Canadians’ trust in government and en courage knowledge-sharing between government, 
industry and non-governmental organisations.   
IV. FOURTH TRIENNIAL REVIEW 
16. Canada proposes that the Committee advance the discussion of this issue by agreeing in the 
Fourth Triennial Review to hold at least one wo rkshop on the subject of good regulatory practice, 
which will include, inter alia, examination and discussion of the issue of "instrument choice". 
 
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