WORLD TRADE  
ORGANIZATION  G/TBT/W/285 
19 March 2008 
 (08-1246) 
Committee on Technical Barriers to Trade Original:   English 
  
 
DETERMINING THE NEED TO REGULATE 
 
Communication from the United States
 
  
I. INTRODUCTION 
1. In its successive reviews of the World Trade Organization Agreement on Technical Barriers 
to Trade (TBT Agreement), the TBT Committee h as highlighted the importance and relevance of 
“good regulatory practice” as a tool for preven ting the creation of unnecessary obstacles to 
international trade.  From the U.S. perspective, an  important component of good regulatory practice is 
the effective use of processes and analytic tools for determining the need to regulate.  These processes 
and tools rely significantly on the commonly accepted principles for good regulatory practice originally set forth in the 1995 OECD Recommendation on Improving the Quality of Government Regulation and discussed in an earlier communicati on from the United States to the TBT Committee 
on “Good Regulatory Practice.”
1 
2. Discussions of good regulatory practice address issues that go beyond the scope of the TBT 
Agreement; nevertheless, the principles are relevant to the development and application of standards, 
technical regulations, and conformity assessment procedures. The successful application of good 
regulatory practices should reinforce, in a domest ic context, the goal of preventing unnecessary 
obstacles to international trade.  
3. This U.S. submission responds to the Committee’ s invitation for the submission of papers and 
provides an overview and summary of the key elements  that are part of the U.S. federal regulatory 
approach for determining when it is necessary to regulate. 
II. KEY FEATURES OF THE U.S. REGULATORY PROCESS FOR DETERMINING 
THE NEED TO REGULATE 
A. BACKGROUND   
4. Under the U.S. Constitution, only Congress – the le gislative branch of government – has the 
authority to issue binding legal requirements.   The judiciary has, however, recognized that Congress 
may authorize executive branch agencies to develop and issue regulations imposing such 
requirements.  Although Congress may provide specific direction in particular statutes authorizing agencies to act, the general statute governing the pr ocess for issuing regulations is the Administrative 
Procedure Act (APA).
2 
5. The authorizing statutes may mandate that the agency take specified action or they may 
authorize the agency to act as it deems necessary or  appropriate.  For example, the National Highway 
Traffic Safety Administration (NHTSA) is res ponsible for, among other things, setting safety 
                                                      
1 G/TBT/W/258, 26 October 2005. 
2 5 U.S.C. §§ 551 et seq. G/TBT/W/285 
Page 2  
 
  standards for the manufacture of motor vehicles.  A statute might mandate that NHTSA issue 
regulations requiring the installation of airbags in all automobiles.  Alternatively, the statute may 
simply require NHTSA to set minimum levels of safety for the manufacture of automobiles; NHTSA 
would then have the discretion to determine whet her a regulation requiring airbags was necessary. 
6. Authorizing statutes may also be general or sp ecific. For instance, if the statute mandating 
airbags does not specifically require otherwise, NH TSA would have the disc retion to determine the 
need for more specific requirements in the regulati on.  NHTSA might see the need to set standards for 
what qualifies as an airbag, what tests will have to be conducted, and what kind of test dummies must 
be used; NHTSA might also review the need to provide a shorter or longe r implementation period, 
and the need to phase in the requirement over a period of years.  
7. An authorizing statute may require action that could adversely affect compliance with other 
requirements.  For example, whatever the merits of a statute mandating airbags, an airbag adds weight 
to an automobile; added weight would decrease fu el economy and make it more difficult to comply 
with any statute that mandates an  increase in fuel economy.  This result could affect the agency’s 
assessment of the need for the ai rbag regulation, but the agency may have little or no discretion. 
8. Finally, an authorizing statute may be vague or pose practical issues for the implementing 
agency.  For example, the statute may mandate “f rontal crash protection.”  If the agency already 
requires seat belts, it may not be clear whether that satisfies the statute or whether the agency must 
require something additional.  If the statute manda tes “airbags,” the agency’s assessment of the costs 
and benefits of an airbag regulation may indicate that there is no safety problem that airbags would 
address beyond what seatbelts already accomplish.  The agency could also decide that, although there 
are benefits, they would be very minimal, while the costs for airbags would far exceed any added 
benefit.  In this situation, the agency might use its  analysis in an effort to obtain more discretion or 
clarification of its authority from Congress. 
B. I
DENTIFICATION OF THE NEED FOR A REGULATION  
9. The first step that a WTO Member should take in  determining whether or not to regulate is to 
identify the need for a regulation.   As such, Article 2.2 of the TBT Agreement appears to make 
identification of the “legitimate objective” of a t echnical regulation a key aspect of the provision: 
Members shall ensure that technical regula tions are not prepared, adopted or applied 
with a view to or with the effect of crea ting unnecessary obstacles to trade.  For this 
purpose, technical regulations shall not be more trade-restrictive than necessary to 
fulfil a legitimate objective, taking account of  the risks non-fulfilment would create.  
Such legitimate objectives are, inter alia:   national security requirements;  the 
prevention of deceptive practices;  protection of human health or safety, animal or 
plant life or health, or the environment.  In  assessing such risks, relevant elements of 
consideration are, inter alia:   available scientific and technical information, related 
processing technology or intended end-uses of products. 
This provision sets out an illustrative list of “l egitimate objectives” and makes clear that whether a 
technical regulation is appropria te under Article 2.2 is, in pa rt, measured by whether and how it 
fulfills such a legitimate objective.   
10. In the U.S. federal regulatory system, there are several methods by which the “legitimate 
objective” of a technical regulation is determined.  As previously mentioned, the U.S. Congress may 
direct a federal agency to regulate in order to ach ieve such an objective.  In other instances, the 
Congress may authorize, but not direct, an agency to  regulate in a particular area.  In cases where an 
agency is given the discretion to consider regulatio ns reducing a particular risk, such as health and  G/TBT/W/285 
 Page 3 
 
 
  safety regulations, there are many ways in which it may identify the need for a regulation.   One 
process that is used involves a preliminary determina tion of the need for the regulation.  The agency 
would follow up this preliminary determination by formally assessing the risk.3  While a formal risk 
assessment is not required under the TBT Agreement, ag encies have found this to be a useful step in 
determining the need and parameters  of a regulation.  Based on the data from the risk assessment, the 
agency would then analyze the cost s and benefits of regulatory action4 and perform other necessary 
analyses before deciding to initiate a regulatory action under the APA. 
11. Perhaps the most common way in which an ag ency identifies the need for regulations is 
through its regular, informal review of its existin g regulations during its day-to-day oversight and 
compliance activities with respect to the industry it regulates. For example, Federal Aviation 
Administration (FAA) inspectors riding in an airp lane cockpit may note instances when pilots are 
confused about how to use a safety device.  In spectors for the Occupational Safety and Health 
Administration (OSHA) may see increasing incidents of workers who are inhaling hazardous fumes at the worksite.  Environmental Protection Agency  (EPA) employees may identify an increasing number 
of releases of a dangerous chemical from a pr oduction plant.  Attorneys for the Food and Drug 
Administration (FDA) may have difficulties enforc ing their regulations, because the courts do not 
agree that an FDA regulation prohibits what the ag ency thought it did when the agency issued it.  
Agencies may get large numbers of requests for interpretations of a regulation, indicating that the 
regulation needs to be rewritten more clearly.  Alte rnatively, agencies may receive a large number of 
legitimate requests for exemptions from a regulation,  and the agency may decide this indicates the 
agency did not have a good understanding of the ability of the industry to comply with the particular 
regulation.  Changes in the state of the art also may necessitate changes in agency regulations.  For 
example, the voluntary use of flight simulators has demonstrated that they can provide better flight training than “live” training in airplanes.  Theref ore, the FAA has taken st eps to increase the use of 
simulators. 
12. An agency may also identify these issues through a formal, scheduled review of its existing 
regulations.
5  This process may be part of a general agency  plan to review all of its regulations over a 
period of time or part of a special, one-time review of a particular set of regulations.  These reviews 
often involve public participation a nd may include an economic analysis of the costs and benefits of a 
regulation after it has been in effect for a few years. 
13. An agency may also initiate action as a result of receiving a petition from one or more 
persons, organizations, or businesses asking the agency to revise or revoke an existing regulation or to 
issue a new one.6  
14. Agencies may also develop policy initiatives that can lead to the need for new regulations.  
These initiatives may come at the direction of ve ry senior government officials, including the 
President.  For example, the President may decide th at it is necessary to increase the fuel efficiency of 
motor vehicles and direct NHTSA to develop appropriate, new standards. 
                                                      
3 See “Updated Principles for Risk Analysis ” (December 19, 2007 memorandum from the 
Administrator, Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget 
(OMB), and the Associate Director a nd Deputy Director for Science, Office of Science  and Technology Policy; 
OMB regulatory documents are generally available at http://www.whitehouse.gov/ om b/inforeg/regpol.html). 
4 See OMB Circular No. A-4, “Regulatory Analysis” (2003). 
5 See Executive Order (EO) 12866 “Regulatory Planning and Review” (1993), § 5, for one of the 
requirements that agencies conduct such reviews,  EO 12866 helps ensure U.S. compliance with Article 2.3 of 
the TBT Agreement, which provides that “[t]echnical regula tions shall not be maintained if the circumstances or 
objectives giving rose to their adoption no longer exist or if the changed circumstances or objectives can be 
addressed in a less trade-restrictive manner.” 
6 5 U.S.C. §553 (e) requires that agencies “give an interested person the right to petition for the 
issuance, amendment, or repeal of a rule.” G/TBT/W/285 
Page 4  
 
  15. In the United States, there are also various agen cies or offices that have the authority to 
conduct investigations, prepare re ports, and make recommendations to other agencies for action.  
These investigative agencies do not generally have th e authority to issue regulations.  For example, 
the Government Accountability Office (GAO) inves tigates executive branch agency operations for 
activities ranging from accounting practices to safety ove rsight.  Individual executive branch agencies 
have Inspectors General who cover an  equally broad range of activities for their particular agencies.  
In addition, some specialized ag encies have been created to ove rsee certain agency functions and 
recommend the issuance of regulations by those agen cies.  For example, the National Transportation 
Safety Board (NTSB) investigates significant transportation accidents and incidents and makes recommendations to Department of Transporta tion (DOT) agencies and the U.S. Coast Guard 
(USCG). 
C. C
ONSIDERATION OF LEGAL REQUIREMENTS  
16. The legal review within the agency as well as the rest of the executive branch would include 
the consideration of international agreements (i ncluding the WTO agreements , bilateral and regional 
free trade agreements, and mutual recognition agreements), statutes (including implementing 
legislation for such agreements), executive orders , and regulations.  This would include requirements 
that agencies believe have international effects.7  In addition, in analyzing the effects of the regulation 
under development, the agency also might consider  the effect of foreign legal requirements on the 
regulated entity; and the agency might also meet with  foreign officials to discuss issues and concerns 
before issuing a regulation.  For example, DOT offici als considered the effect in Canada of requiring 
drug testing of commercial motor vehicle operators  driving in the United States before issuing a 
regulation, because Canadian law might have barre d Canadian companies from doing those tests.  
DOT officials had extensive meetings and discussi ons with Canadian officials before issuing 
regulations on this issue. 
D. CONSIDERATION OF ALTERNATIVES  
17. As stated above, Article 2.2 of the TBT agre ement provides that “technical regulations shall 
not be more trade-restrictive than necessary to fulfil a legitimate ob jective, taking account of the risks 
non-fulfilment would create.”  After preliminarily iden tifying the need for a regulation, a U.S. federal 
agency will consider non-regulatory, regulatory,  and substantive alternatives with the goal of 
identifying the best alternative to address the n eed for the regulation while minimizing associated 
costs.  The agency will often specifically seek public  comment on alternatives, sometimes even before 
it issues a regulatory proposal.  The agency may issue an advance notice of proposed rulemaking 
(ANPRM) in which it identifies the problem it believ es needs to be addressed, provides what data it 
has, and asks the public for comment on how to address the problem.  Sometimes it will hold an informal public meeting to discuss solutions to the problem.  Or the agency may create an advisory 
committee, consisting of members of the public w ho can fairly represent interests that could be 
affected by any agency action, to discuss or  develop a recommended solution to the problem.
8  
Depending on the governing legal authority, forei gn government or private sector representatives may 
participate at these informal public or advisory committee meetings. 
18. Non-regulatory alternatives include a variety of approaches to addressing an issue.  One 
involves market place incentives.  An example would be  the use of crash test results.  Rather than 
requiring specific manufacturing changes, an agency may simply publish safety or health data about a 
product and let the consumers act on that data.  Alte rnatively or in addition, an agency may impose a 
large fee or encourage Congress (or perhaps state legislatures) to impose a tax to discourage a 
particular activity or encourage a change in a manufactured product.  For example, higher fuel 
                                                      
7 See 19 U.S.C. §§ 2531-2533 (Trade Agreements Act).  
8 See 5 U.S.C. §§ 561-570a (Negotiated Rulemaking Act).  G/TBT/W/285 
 Page 5 
 
 
  efficiency in consumer products might be encouraged  by higher taxes for fuel.  As another example, 
congestion may be addressed by charging increasingly  higher fees for access to highways or airport 
runways as congestion increases.  Rather than issu ing a regulation mandating various steps to address 
congestion, the Federal Highway Administration (FHWA), for instance, might make it a condition of federal financial assistance that it offers to sub-cen tral governments that the recipients charge a higher 
fee for congested roadway usage.  Another technique  would be to encourage voluntary action either 
individually or in partnership with others.  Fo r example, the possibility of more stringent EPA 
regulatory limits on pollution might encourage compani es to work together to decrease emissions.  In 
adopting such non-regulatory alternatives, the ag ency would need to take action that does not 
discriminate against foreign entities. 
19. Even when the agency d ecides that it must issue a regulation, there are often less burdensome 
alternatives than “command and control” regulations that tell the regulated entity specifically what it 
must do.  As an illustration, rather than establish specific technical requirements for automobile tires, 
NHTSA requires that the tires be tested for certain criteria and that the results be provided on the tire 
sidewall.  The disclosure of this information allows the consumer to make an informed decision.  In 
any case, in lieu of developing its own standard s, agencies are directed by both law and policy
9 to use 
voluntary consensus standards, both domestic and inte rnational, in their regulatory activities, instead 
of developing government-unique standards, unless the use of such standards would be inconsistent 
with applicable law or otherwise impractical.  Us e of these standards can decrease agency costs as 
well as the burden of complying with agency regulation.  Moreover, agencies use voluntary consensus standards in a wide variety of other ways.  For example, FDA recognizes manufacturers’ use of 
national and international consensus standards, including declarations of conformity to these 
standards, during the evaluation of premar ket submissions for medical devices.   
20. Another alternative that agencies are specifica lly required to use, when appropriate, is 
performance standards.
10  Rather than requiring a regulated entity to manufacture or operate in a 
particular manner, the agency simply sets the object ive that must be met.  As an illustration, EPA 
might set a limit for plant emissions.  The manufact urer may take whatever action or use whatever 
equipment best enables it to operate at or below that  limit rather than being required, for example, to 
install a particular device or operate only during particular hours.  Anothe r technique would be to 
establish a performance standard and require the regul ated entity to submit a plan for agency approval 
indicating how the objective will be met.  Alternativ ely, the agency may establish a particular safety 
requirement, but allow the regulated entity to provide  an alternative means of compliance – e.g., an 
alternative means of achieving the same level of sa fety – to the agency for approval.  Finally, to 
further lessen the burden of a regulation, the ag ency may phase in the requirements over a specified 
time period; if the burdens especially affect small businesses, the agency may impose less stringent standards on those entities, if it determines they do no t need the more stringent  standards because they 
operate in different ways from the larger businesses.   For example, smaller railroads may not operate 
at the higher speeds of large railroads, b ecause their trips may be much shorter. 
21. Finally, agencies consider the different ways to address a problem, such as reducing the level 
of fatalities in automobile frontal collisions.  Th e problem may be addressed by requiring manual seat 
belts, automatic seatbelts, airbags, shock absorbing ex teriors, or more padding in the interior of the 
automobile.  If the agency decides that it mu st mandate a specific solution as opposed to a 
performance requirement, it must carefully consider th e pros and cons or cost s and benefits of the 
different alternatives.  Again, it would have to car efully consider whether its choice would create a 
competitive disadvantage for a foreign entity.   
                                                     
 
9  15 U.S.C. § 272 Note (National Technology Transfer and Advancement Act).  See also, OMB 
Circular A-119, Revised, “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities” (1998). 
10 See Trade Agreements Act, f.n. 7  supra and EO 12866, § 1(b)(8). G/TBT/W/285 
Page 6  
 
  E. R
ISK ASSESSMENTS11 
22. Under this regulatory approach, an agency would, after determining that there is a problem 
that needs to be addressed (e.g., increasing numbers of  fatalities in automobile frontal collisions), then 
assess the probability of that problem occurring (e .g., one accident causing a death for every 1000 
vehicle miles driven).  This risk assessment coul d be based on laboratory experiments, statistical 
reviews, and other similar work; it could also involv e expert judgment.  For example, the agency may 
have data on frontal collisions with fatalities, but lack information on which fatalities could be 
prevented by airbags, if airbags have not been u sed in cars.  The agency could perform tests on the 
effectiveness of the airbags in simulated crashes.  It could then analyze the data on frontal collisions 
and eliminate all fatalities that would not have been prevented by an airbag (e.g., because the 
occupants died when the entire interior of the auto mobile was crushed or when the automobile went 
into a body of water and they dr owned); it could then determine the effectiveness rate based on the 
remaining, preventable fatalities.12 
23. There are a number of issues or factors that arise in determining whether the assessment 
supports the need for the regulation.  One important  consideration is the need for the agency to 
provide a basis for any assumptions.  For example, the judgment of experts, based on experiments, 
that it is more difficult to perform a safety-sens itive function at night because of body biorhythms 
could support an estimate of this risk; however, if  the real-world accident  data do not support this 
conclusion, better justification may be needed.  Another consideration involves the range and 
distribution of risks.  For instance, in addition to considering the full population at risk, attention 
should be directed to subpopulations that may be particularly susceptible to such risks and/or may be 
more highly exposed.  It is also important to consid er the comparison of one risk to others, especially 
in a way that the public can understand, because  there can be a public misperception of the 
“seriousness” of many risks, and because the agency needs to consider whether it would need or want 
to regulate all problems with the same level of risk.  Another consideration is the potential for 
significant risk tradeoffs – whether regulating one risk  will exacerbate another.  As an illustration, if 
an agency requires that a handhold be added to the outside of an aircraft for use while opening or 
closing a door to improve worker safety, the agency  needs to consider whether that might adversely 
affect the safe operation of the aircraft.  In ev aluating the decisions the agency has made on the 
various components of its assessments, the agency  also will consider the possible advantages of 
having its risk assessment subjected to peer review.13  This could simply mean having other 
professionals in the agency who are not involved in  the development of the regulation review the 
analysis.  For more complex or controversial regul atory issues, the agency may consider the use of 
independent peer review by academics or ot her parties not involved in the process. 
F. COST-BENEFIT ANALYSES14 
24. The risk assessment would form the basis fo r the economic analysis.  The agency is 
essentially determining the costs and benefits of a ddressing the problem – eliminating or lessening the 
risk – and using the information to determine whethe r the regulation can be justified.  For expensive 
regulatory actions, the agency would also consider the costs and benefits of alternative actions and 
                                                      
11 See f.n. 3, supra .  See also,  Treasury and General Government Appropriations Act for FY 2000, Pub. 
L No. 106-554; § 515 (“Quality, Objectivity, Utility, and Integrity of Information” and OMB “Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by 
Federal Agencies” (2002). 
 12 This example highlights the requirement for Members to consider relevant factors, such as available 
scientific and technical information, when assessing the risks that non-fulfillment of a legitimate objective 
would create.  See Article 2.2 of the TBT Agreement.   Such consideration also occurs  at other stages of the U.S. 
regulatory process, including when considering altern atives and undertaking a co st-benefit analysis.   
13 See OMB “Final Information Quality Bulletin for Peer Review” (2004). 
14 See f.n. 4, supra.  G/TBT/W/285 
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  explain not only why it chose the option it did, but wh y it rejected the other alternatives (e.g., the costs 
far outweighed the benefits or there was too much un certainty over their effectiveness).  Pursuant to 
statute, executive order, or agency orders or regula tions, as part of its analysis, the agency would also 
consider a number of special effects.  This would include such things as energy effects,15 paperwork 
burdens,16 effects on small entities,17 and the effect of a regulation on the environment.18   
25. As part of the cost-benefit analysis, there are a number of factors for the agency to consider.  
In some cases, the authorizing statute may simply mandate a specific action;19 in this case, preparing a 
cost-benefit analysis may still be valuable, since it may provide data that would cause the Congress to 
revise or revoke the legislation.  The agency also would consider the reliability of the data and the 
support for any assumptions.  Although it is sometim es very difficult to quantify certain costs or 
benefits, the agency still needs to consider them ; in those instances, the agency would provide a 
description of the cost or benefit.  A combination of concerns may make it difficult to support a decision to regulate.  For example, EPA may be considering whether to require cleaning up a river.  The benefits may include a healthier environment fo r wildlife, a better source for drinking water, and 
a new recreation site.  But the environmental bene fits may be relatively minor compared to other 
things on which money could be spent, and the ag ency may not have good data on whether the public 
will use the river for recreation, because other, near by facilities are available.  The agency may also 
find it difficult to estimate whether the other recreatio nal sites will be indirectly harmed by the loss of 
business, which may result in the lo ss of necessary revenue to keep those environmentally important 
sites clean. 
26. There are also a number of other factors that th e agency must consider.  For example, in the 
development of regulations designed to mitigate the ri sk of the loss of life or serious injury, there may 
be significant uncertainty over the “value” of preventi ng those risks of death or injury.  In these cases, 
most agencies have a specific policy regarding whic h values they place on these risks.  While agency 
experts may believe that there is a significant risk  worth regulating, there may also be concern over 
the lack of good accident data to support that opini on.  The balance between waiting for accidents to 
happen before an agency may justify regulating and the need for the agency to prevent accidents and 
ensure as much safety as is reasonable requires a car eful analysis and any decision warrants a clear 
justification.  If the regulation’s benefits justify th e cost, but the alternative chosen by the agency is 
the most costly or least cost-effe ctive, the agency would need to explain the reason for doing that.  
Finally, there may also be uncertainties or di sagreements regarding what and how many other 
reasonable alternatives there are that the agency should consider.   All of these decisions can benefit 
from sensitivity analyses.  Different assumptions, va lues for avoiding a fatality, discount rates, etc., 
can be analyzed and the agency may determine that the regulatory decision would not be affected by using the values put forth by someone who supports or opposes the proposed regulation.  
Alternatively, the agency may find the data are too unreliable to support a decision without further 
work.  
27. A good illustration of the use of these analytic tools involves an FAA decision on whether to 
require children under the age of two to sit in child r estraints on commercial aircraft rather than in the 
laps of their parents or other passengers.  Histor ically, FAA regulations have allowed children under 
two to travel for free while sitting on a parent’s lap.   Although few children have died in aircraft 
accidents, FAA studies showed they would be safer in  specially designed restraints.  However, such 
                                                     
 
15 See EO 13211 (“Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use (2001). 
16 See 44 U.S.C. §§ 3501-3520 (Paperwork Reduction Act). 
17 See 5 U.S.C. §§ 601-612 (R egulatory Flexibility Act). 
18 See 42 U.S.C. §§ 4321-4347 (National Environm ental Policy Act) and related requirements. 
19 An authorizing statute may also prohibit agency consideration of costs in making decisions or 
otherwise restrict how an agency is able to us e cost-benefit analysis in  its decision-making. G/TBT/W/285 
Page 8  
 
  restraints would require the child to have a separate seat and, therefore, a separate ticket.  The FAA’s 
analysis then showed that the cost of paying for an extra ticke t would be enough to make some 
families choose to drive to their des tination rather than fly.  Since driving has a higher accident rate 
than air travel, the FAA found that a regulatory change could lead to more deaths among these children and
 their accompanying families, even if only a small percentage of families were to switch 
to automobile trips. 
28. These analyses are valuable decision-making tool s.  Agency officials have changed their 
minds on the need for a regulation after they review ed the data in their economic analysis.  Congress 
has also changed statutory mandates after revi ewing the data gathered by the agency.  
G. CONTINUAL REASSESSMENT OF NEED DURING THE REGULATORY PROCESS  
29. During the development of any regulation, the agency would continually reassess its 
preliminary determination of a need for a regul ation.  During its risk assessment and economic 
analysis, the data developed may raise questions ab out the need for, or costs and benefits of, the 
regulation.  In addition, the agency determinati on and justification are reviewable by other offices 
within the agency or its department, and for some regulations in the United States, by the Office of 
Management and Budget (OMB) and other executiv e branch agencies.  During this phase, for 
example, agency lawyers may raise questions about th e legal authority to issue the regulation.  Policy 
officials may raise questions about the need for th e regulation.  For example, although large numbers 
of people may be injured while rock climbing, pe ople often engage in su ch activity because it is 
inherently dangerous.  Policy officials may cha llenge the need for safety devices such as hand holds 
on the rocks to eliminate the danger that causes people to engage in the activity and ask whether many 
rock climbers will simply look for another more da ngerous location to climb or find another activity. 
30. After the necessary internal government approva ls are obtained, the agency still generally 
must issue a proposed regulation for public comment .  The public is provided an opportunity to not 
only comment on the proposal, but also on any risk  assessment and economic analysis as well as other 
supporting documents, such as environmental assessm ents or privacy assessments.  Before issuing a 
final regulation, the agency must respond to the public comments and provide a justification for the 
regulation.  
31. Finally, the agency action may also be subjected to Congressional or judicial review.  Both 
the Congress – through legislation – and the courts ca n overturn a regulation or require the agency to 
reconsider it.   
H. THE LOGIC OF THE DECISION  
32. During the preparation or review of a draft regulation, there are a number of questions that 
should be asked to ensure that the regulatory decisi on is justified.  This process can be somewhat like 
a peer review, with questions being asked about the basis for assumptions or the source of data, about 
legal authority or policy judgments, etc.  Many of these questions reflect the disciplines and principles of the WTO agreements, particularly the TBT Agreemen t.  The basic, general questions that should be 
addressed, with some possible follow-up questions, include:   
(a) Is the problem or policy goal clear?  For example, for a safety regulation, why do 
private markets provide less than the optimal  amount of safety?  Have the agency 
officials made the objective clear enough to ensure that it will be met by the regulatory action?  Are they sure that a regulation is being issued to address a 
problem that really exists?   G/TBT/W/285 
 Page 9 
 
 
  (b) Will the regulatory action address the problem?  If the objective is to make bathrooms 
in a building accessible to disabled persons, for example, will the regulation require 
that the bathroom be accessible, but not th at the building itself be accessible?  If you 
require that drug or food labels include info rmation for the consumer to ensure they 
do not use drugs or food that may be harmful, would tests show that the average 
person would not un derstand the label?  If you require seats on aircraft that will 
withstand greater crash forces, will the aircraft floor be strong enough to hold the seat in place when subject to those forces?  
(c) Do the data and the analyses support th e decision?  Are the costs and market 
distortions minimized while the benefits are maximized?  Are data sources reliable?  
Are the ranges of possibilities so broad that the basis of the decision is questionable?     
(d) Is the action sensible?  Is it possible th at a mistaken decision could cause serious 
harm to the marketplace or adversely affect health, safety, or the environment?  
(e) Are the assumptions reasonably explained and supported?  Are a ppropriate sensitivity 
analyses conducted to respond to challenges to assumptions?  
(f) Does the regulation comply with legal requirements, including international 
agreements (including the WTO agreem ents, bilateral and regional free trade 
agreements, and mutual recognition agreements ) to which the United States is a party, 
statutes (including implementing legislation for such agreements), executive orders, and regulations?  
(g) Are conflicts or other effects on ach ieving other objectives and requirements 
explained and justified?  Assuming, for exam ple, that a regulation is necessary, in 
assessing alternatives has there been any consideration of how other governments have chosen to regulate in this particular  area?  Have there been any consultations 
with foreign governments?    
(h) Could the regulatory action have unintende d consequences?  Could the increase in 
costs for a product or service as a result of a required safety improvement cause 
consumers to choose alternatives even less safe than the product or service before it 
was improved?  Because of costs, would a company have to forego one safety protection in order to provide another re quired protection?  For example, would 
consumers choose a less safe way to travel, if  regulations raised the cost of another 
mode of transportation?  Would patients refuse to take a necessary drug, because a 
required warning about a very minor risk associated with the medication scared 
them?   
(i) Will the action promote or hinder innovation, competition, trade, and investment?  If 
the regulation does not reference or incor porate performance standards, specifically 
internationally-developed standards, if available, why not?  Does the regulation 
require the use of U.S. certification agenci es or laboratories and, if so, why?  Will 
foreign businesses have a hard time complying because the regulation is based on U.S. industry manufacturing processes?   
(j) Are there reasonable alternatives and explanations for their rejection?  
(k) Is the regulation clear, practical, and easily enforced?  Would a regulatory alternative 
that is more acceptable to the regulated community but establishes a slightly lower G/TBT/W/285 
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  level of protection end up providing more pr otection if regulated entities were more 
likely to comply with it?  Or if it were easier for the industry to comply?  
III. CONCLUSION  
33. A thoughtful, open, and transparent process for examining the need for regulation leads to 
better decisions.  Well-done analyses are exceptionally valuable tools in this decision-making process.  
They have convinced advocates of one position or a nother to change their minds about a particular 
action. 
34. If the process is used correctly, there will be be tter participation in the process by the public 
and other governments, and regulations are much le ss likely to create trade barriers or other problems. 
 
 
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