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###### Department of Commerce

###### International Trade Administration

# AGENCY:

International Trade Administration, Commerce.

# ACTION:

Notice.

# SUMMARY:

The U.S. Government recognizes that economic recovery and job creation will depend significantly on its ability to work collaboratively with key trading partners to promote free and open trade and investment. In our trade and investment relationships with Mexico and Canada, and within North America as a whole, the main impediments to greater trade and investment—and more open foreign markets for U.S. exporters and investors—are not tariffs or quotas, but rather unnecessary differences in product regulations that increase costs for producers and consumers in the United States, Canada, and Mexico. With this Notice, the Commerce Department, on behalf of the Administration, is seeking public input to help identify such divergences in North America, so that the U.S. Government can work cooperatively with Mexico and Canada to address them.

President Obama explicitly linked trade to job creation when he announced the National Export Initiative in his 2010 State of the Union address, and set the ambitious goal of doubling U.S. exports in the next five years to support millions of jobs here at home. The President has focused particularly on efforts to remove unnecessary divergences in regulations with Canada and Mexico, our first and second largest export markets, respectively, and officials from the three countries have discussed strengthening regulatory cooperation to promote better regulation and facilitate trade, both bilaterally and trilaterally. President Obama met with President Felipe Calderón of Mexico and Prime Minister Stephen Harper of Canada at the the North American Leaders' Summit on August 10, 2009, in Guadalajara, Mexico. In the joint statement they issued at the end of that meeting they noted the progress that each of their governments had made in reducing unnecessary regulatory differences and they instructed their respective governments, “* * * to continue this work by building on the previous efforts, developing focused priorities and a specific timeline.” The United States Government is working with both Mexico and Canada to reduce unnecessary regulatory differences and to explore further regulatory cooperation activities aimed at reducing or eliminating such differences where they hinder trade and reduce competitiveness. In order to do so, the United States has established a High-Level Regulatory Cooperation Council with Mexico and a Regulatory Cooperation Council with Canada. While these councils are bilateral, regulatory divergences exist that have consequences for firms in all three countries. Therefore, with this Notice, the Department of Commerce's International Trade Administration (ITA), in support of the National Export Initiative (NEI) and pursuant to the Secretary of Commerce's role as the chair of Trade Promotion Coordinating Committee, is requesting stakeholders to assist the Administration to identify opportunities for cooperation between or among the United States, Canada, and Mexico to reduce or eliminate regulatory divergences that disrupt trade in goods in the region, as well as any existing or emerging sectors that may benefit from regulatory coordination between these countries. Canada has already solicited similar input from its stakeholders, and Mexico has committed to do the same.

# DATES:

The agency must receive comments on or before April 4, 2011.

# ADDRESSES:

                        Submissions should be made via the Internet at                         *http://www.regulations.gov*                         under docket ITA-2011-0003-0001. Please direct written submissions to Diana Hynek, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue, NW., Washington, DC 20230                        *. The public is strongly encouraged to file submissions electronically rather than by mail.*

# FOR FURTHER INFORMATION CONTACT:

                        Questions regarding this notice should be directed to                         *regcoop@trade.gov.*

# SUPPLEMENTARY INFORMATION:

In his January 2010 State of the Union address, President Obama announced the NEI to double U.S. exports over five years and support the creation of new jobs. As the President's Export Promotion Cabinet has undertaken to implement the NEI, regional and sectoral plans are being developed to tailor the U.S. Government's NEI efforts based on the realities of trade in certain regions. For example, the North American Free Trade Agreement (NAFTA) created the world's largest free trade area, linking 444 million people and producing $17 trillion in goods and services. Trilateral trade among Canada, Mexico, and the United States was $944.6 billion in 2010. Despite this extensive trade among NAFTA partners, U.S. exporters indicate that they continue to encounter unnecessary divergences in regulatory measures in North America that disrupt trade.

ITA has developed a Mature Markets Initiative (MMI) to evaluate how best to grow exports, create jobs, and support U.S. business growth in areas where trade is robust. Regulatory cooperation is a key component of the MMI. Accordingly, ITA has identified Canada and Mexico as mature markets and will seek ways to ease or eliminate regulatory differences that hinder competitiveness and negatively impact trade for U.S. firms, including new-to-market and new-to-export businesses, particularly small- and medium-sized enterprises (SMEs).

                    Trade may be impeded, for example, because countries apply different standards or technical requirements to address common environmental, health, safety, or other concerns with respect to certain products or product categories. In some instances, such divergences may be arbitrary and can lead to delays, additional costs, and burdens on U.S. suppliers, particularly SMEs, and, in some cases, can make it difficult or impossible for U.S. suppliers to penetrate foreign markets. These divergences can also increase regulatory burdens for governments and costs for consumers. In other cases, regulatory                           ( print page 11761)                        measures, despite the burdens they impose, may be necessary in order to achieve legitimate objectives such as the protection of the environment, health, or safety.                

Regulatory cooperation with respect to regulatory measures can help reduce unjustified divergences and lower costs and burdens for businesses, especially SMEs, as well as for governments and consumers. For example, when regulators in different countries share data, studies, and other information on specific regulatory issues, they are more likely to reach similar conclusions, such as on the risks associated with a particular product, appropriate measures to mitigate those risks, and the costs and benefits associated with alternative regulatory approaches. This can lead regulators in these countries to adopt regulatory measures that are more aligned with each other, allow producers to develop economies of scale, reduce costs associated with complying with divergent regulatory measures, and pass on costs savings to consumers. It is critical for any alignment in regulatory approaches that results from cross-border cooperation between regulators in the United States and other countries, however, to be transparent and non-discriminatory, reduce unnecessary costs and burdens on producers and consumers, and continue to fulfill each country's health, safety, environmental, and other legitimate policy objectives.

Although cooperation on regulatory measures can lead to regulatory alignment, it can also result in other outcomes that help facilitate trade. For example, governments may elect to conclude mutual recognition agreements under which regulators in each country agree to allow products from the other country to be placed on the market based on tests or certifications carried out in that country, or equivalency agreements under which a regulator in one country agrees to recognize another country's standards as equivalent to its own, allowing products to be placed on its market that meet the other country's standards. The outcome of any such regulatory cooperation must ensure that each country can continue to meet its legitimate policy objectives.

In addition, when regulators cooperate with regard to regulatory measures, their cooperation may serve not only to facilitate trade, but may also help to realize common public policy objectives. For example, when regulators in different countries coordinate their efforts in carrying out product recalls, it can help ensure that defective or unsafe products are promptly removed from the market, thereby increasing consumers' confidence in the products they buy and in the global trading system.

*Request for information.*                     ITA invites public comment on the following possible types of cooperative regulatory activities between or among the United States, Mexico, and Canada: information-sharing agreements; technical assistance; memoranda of understanding, mutual recognition agreements; collaboration between regulators before initiating rulemaking proceedings; agreements to align particular regulatory measures; equivalency arrangements; and accreditation of testing laboratories or other conformity assessment bodies. ITA acknowledges that these types of cooperative agreements and activities are not appropriate in all cases, so interested parties are asked to provide a rationale for the proposed use of a particular cooperative approach or specific activity. ITA is also seeking recommendations for existing or emerging industry or product sectors that may benefit from regulatory coordination across North America.                

                    Submitters should be as specific as possible in describing the relevant product or product sector, and the country or countries in which they believe there is an opportunity to facilitate trade. In addition, each proposal should include, where appropriate: (a) A description of the specific measure or measures that the proposal would address (                    *e.g.,*                     laws or regulations setting out safety or testing requirements for the relevant product or product sector); (b) an Internet link to or a copy of the measure in English and documentation that may assist ITA in understanding the measure; (c) identification of the key markets in North America for the product or product sector; (d) a description of how and to what degree the regulatory measures are affecting trade and its related costs; (e) information that may affect the proposal's feasibility (                    *e.g.,*                     U.S. legal, regulatory, or policy constraints, or any response from stakeholders or U.S. trading partners the proposal may elicit); (f) estimates of the potential benefits that would result from more closely aligning the regulatory measure, as well as a description of the method by which the submitter has calculated the benefits; (g) contact information, if known, for key government and non-government stakeholders in the country or countries to which the proposal applies; and (h) any other information that may assist ITA in considering the proposal.                

ITA is interested in receiving proposals concerning any product sector that, due to the volume of trade in North America, is a justifiable focus of enhanced regulatory cooperation. Submitters are encouraged to work with counterparts and other interested stakeholders in Canada and/or Mexico to submit comments jointly. ITA will give positive consideration to proposals that demonstrate strong support from stakeholders across North America.

*Requirements for Submissions:*                     In order to ensure the timely receipt and consideration of comments, ITA strongly encourages commenters to make on-line submissions, using the                     *http://www.regulations.gov*                     Web site. Comments should be submitted under docket number ITA-2011-0003-0001. To find this docket, enter the docket number in the “Enter Keyword or ID” window at the                     *http://www.regulations.gov*                     home page and click “Search.” The site will provide a search-results page listing all documents associated with that docket number. Find a reference to this notice by selecting “Notice” under “Document Type” on the search-results page, and click on the link entitled “Submit a Comment.” The                     *www.regulations.gov*                     Web site provides the option of making submissions by filling in a comments field, or by attaching a document. ITA prefers submissions to be provided in an attached document. (For further information on using the                     *www.regulations.gov*                     Web site, please consult the resources provided on the website by clicking on the “Help” tab.)                

All comments and recommendations submitted in response to this notice will be made available to the public. For any comments submitted electronically containing business confidential information, the file name of the business confidential version should begin with the characters “BC”. The top of any page containing business confidential information must be clearly marked “BUSINESS CONFIDENTIAL”. Any person filing comments that contain business confidential information must also file in a separate submission a public version of the comments. The file name of the public version of the comments should begin with the character “P”. The “BC” and “P” should be followed by the name of the person or entity submitting the comments. If a comment contains no business confidential information, the file name should begin with the character “P”, followed by the name of the person or entity submitting the comments.

                    Please do not attach separate cover letters to electronic submissions; rather, include any information that might appear in a cover letter in the comments                           ( print page 11762)                        themselves. Similarly, to the extent possible, please include any exhibits, annexes, or other attachments in the same file as the submission itself, not as separate files.                

Dated: February 28, 2011.

Michelle O'Neill,

Deputy Under Secretary of Commerce for International Trade.

[FR Doc. 2011-4862 Filed 3-2-11; 8:45 am]

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