International Regulatory Cooperation: Agency Efforts Could Benefit from Increased Collaboration and Interagency Guidance
Published: 2013-08-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Trade has increased as a share of the economy for several years, but U.S. companies can face difficulties competing in foreign markets when countries apply different regulatory requirements to address similar health, safety, or other issues. GAO was asked to examine what U.S. agencies are doing to engage in international regulatory cooperation. This report (1) provides an overview of U.S. regulatory agencies' international cooperation activities; (2) examines ways that U.S. agencies incorporate outcomes from international regulatory cooperation activities and consider competitiveness during rulemaking; and (3) examines factors identified by U.S. agencies and stakeholders that act as facilitators or barriers to international regulatory cooperation. GAO analyzed documents and interviewed officials from seven U.S. agencies that regulate products traded internationally and four U.S. agencies with government-wide roles and responsibilities. GAO also interviewed officials from 11 organizations representing business and consumer advocacy perspectives that reported or publicly commented on international regulatory cooperation. The scope of this study is not intended to be a complete catalog of agencies' activities and is not generalizable to all entities that have interests in this area.
section_title: What GAO Found
paragraphs: All seven U.S. regulatory agencies that GAO contacted reported engaging in a range of international regulatory cooperation activities to fulfill their missions. These activities include the United States and its trading partners developing and using international standards, recognizing each other's regulations as equivalent, and sharing scientific data. U.S. agency officials GAO interviewed said they cooperate with foreign counterparts because many products they regulate originate overseas and because they may gain efficiencies--for example, by sharing resources or avoiding duplicative work. Cooperation can address both existing and avoid future regulatory differences. Officials also explained how cooperative efforts enhance public health and safety, facilitate trade, and support competitiveness of U.S. businesses. Several U.S. interagency processes require or enable interagency collaboration on international cooperation activities. The Regulatory Working Group (RWG), chaired by OMB and the Trade Policy Staff Committee (TPSC) are forums that have different responsibilities related to the regulatory and trade aspects of international regulatory cooperation. U.S. regulatory agency officials said the current processes could benefit from better information sharing among agencies on the implementation of international cooperation activities and lessons learned. Without enhancements to current forums, opportunities to share practices and improve outcomes could be missed. Executive Order 13609, issued in May 2012, tasked the RWG with enhancing coordination and issuing guidance on international regulatory cooperation, which the RWG is developing. Nonfederal stakeholders GAO interviewed reported challenges to providing input on U.S. agencies' international regulatory cooperation activities, in particular that they are not always aware of many of these activities and participation can be resource intensive.
Officials GAO interviewed said the outcomes from international regulatory cooperation inform all phases of the rulemaking process, from helping an agency decide whether to regulate to implementing and enforcing regulations. U.S. agencies are not required to conduct a separate analysis on the competitiveness impacts on U.S. businesses when developing regulations. However, five of the seven U.S. agencies told GAO they do consider competitiveness. Officials we interviewed also pointed out that any analysis of impacts may not rise to the level of inclusion in the rulemaking record. In addition, U.S. agencies' use of international standards in regulations can lower costs for U.S. businesses and reduce barriers to trade.
Officials from all of the U.S. agencies GAO interviewed said they consider international standards during rulemaking partly in response to requirements in trade agreements, U.S. statutes, and executive orders. Officials from all of the U.S. agencies GAO interviewed identified seven key factors that affect the success of international regulatory cooperation activities: (1) dedicated resources, (2) established processes, (3) high-level leadership, (4) scientific and technical exchanges, (5) stakeholder involvement, (6) statutory authority, and (7) early and ongoing coordination. When present, these factors can facilitate U.S. agencies' efforts, but they can also act as barriers when absent. GAO found that these factors also reflect the seven key features for implementing collaborative mechanisms previously identified in its September 2012 report on interagency collaboration.
section_title: What GAO Recommends
paragraphs: GAO recommends the RWG include in forthcoming guidance on Executive Order 13609 tools to enhance collaboration, such as mechanisms to facilitate staff level dialogues. The Office of Management and Budget (OMB) did not have comments on the recommendation.

section_title: Letter
paragraphs: U.S. exports and imports grew from 22.8 percent of gross domestic  product (GDP) in 2002 to 31.4 percent of GDP in 2012, or a total of $4.9  trillion. Doubling U.S. exports by 2014 is a goal of the President’s National  Export Initiative. Nonetheless, U.S. companies can find it difficult to  compete in foreign markets when countries have different requirements  for addressing similar health, safety, or other regulatory issues.  International regulatory cooperation—agencies’ engagement with foreign  counterparts on issues related to their regulatory missions, such as  international standards development, scientific collaboration, and  information sharing—can help lower costs for businesses, increase U.S.  exports, and further economic growth and job creation. International  regulatory cooperation can also have other benefits, including increasing  the safety and quality of other countries’ exports to the United States,  thus helping to protect U.S. consumers. Some of our recent reports have  shown that U.S. regulatory agencies have been struggling to adequately  protect the public in the face of rising imports and increasingly complex  supply chains.Food and Drug Administration (FDA) needed to address gaps in   For example, in September 2009, we reported that the  enforcement and collaboration domestically and abroad to enhance the  oversight of food imports.
In May 2012, the President issued Executive Order 13609 on promoting  international regulatory cooperation to provide high-level support and  direction for U.S. agencies’ international regulatory cooperation efforts.  The executive order directed agencies to consider addressing  unnecessary differences in existing regulations and describes processes  to help avoid regulatory divergence in the future. Recent reports show  that nonfederal stakeholders have mixed views regarding international  regulatory cooperation. Some industry stakeholders are generally  supportive of international regulatory cooperation efforts, especially in the  context of reducing unnecessary barriers to trade,  while some consumer  advocacy stakeholders expressed concerns that efforts to align U.S.  regulations with trading partners could lower the protection of safety and  health in U.S. regulations.
In this context, you asked us to examine what federal agencies are doing  to engage in international regulatory cooperation. This report (1) provides  an overview of regulatory agencies’ international cooperation activities;  (2) examines ways that agencies incorporate outcomes from international  regulatory cooperation activities and consider competitiveness during  rulemaking; and (3) examines factors identified by agencies and  nonfederal stakeholders that act as facilitators or barriers to international  regulatory cooperation and to considering competitiveness. For the  purposes of this report, competitiveness refers to the ability of U.S. firms  to sell into international markets.
The World Trade Organization (WTO) Agreement on Technical Barriers to Trade  obligates WTO members to ensure that technical regulations are not prepared, adopted,  or applied with a view to or with the effect of creating unnecessary obstacles to  international trade. See Agreement on Technical Barriers to Trade, Apr. 15, 1994,  Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, Legal  Instrument - Results of the Uruguay Round, 1868 U.N.T.S. 120 (1994) [hereinafter  referred to as the TBT Agreement].
Agenda), as well as data from the 2011 World Trade Organization  (WTO) Technical Barriers to Trade (TBT) Information Management  System. We applied criteria to select agencies that regulate products that  are traded internationally and assure the inclusion of some independent  regulatory agencies in our review. We analyzed documents and  interviewed officials from seven U.S. regulatory agencies out of 60 U.S.  agencies that are included in the Unified Agenda, including the  Department of Energy (DOE), the Department of Health and Human  Services’ (HHS) FDA, the Department of Transportation (DOT), the  Environmental Protection Agency (EPA), the United States Department of  Agriculture (USDA), the Consumer Product Safety Commission (CPSC),  and the Federal Trade Commission (FTC). We selected these agencies  because they regulate products that are traded internationally, such as  medical devices, chemicals, toys, automobiles, and food. These views  are not generalizable to all U.S. agencies. We reviewed documents and  interviewed officials from the four agencies with government-wide  regulatory and international coordination roles and responsibilities: the  Office of Management and Budget (OMB), the Office of the United States  Trade Representative (USTR), the Department of Commerce  (Commerce), and the Department of State (State).set of perspectives, including those of participants from outside  government agencies, we interviewed officials from 11 academic and  stakeholder organizations representing business and consumer advocacy  perspectives, such as the U.S. Chamber of Commerce and Public  Citizen. We selected these organizations based on published views on  international regulatory cooperation and recommendations from agencies  in our study. These views are not generalizable, but provided insights.  Using criteria based on our September 2012 report on interagency  collaborative efforts, we also compared agencies’ documents and  testimonial evidence about their international regulatory cooperation   To obtain a broader  activities to the seven key features that we found agencies should  consider when implementing collaborative mechanisms.
We tested the reliability of the databases used to help select agencies to  include in this review by reviewing related documentation, interviewing  knowledgeable agency officials, and tracing a sample of entries to source  documents. We concluded that the data were sufficiently reliable for the  purposes of this report. Throughout this report, we use specific, selected  examples to illustrate general agency processes and practices. The  scope of our inquiry is neither a complete catalog of international  regulatory activities nor generalizable to all individuals who have interests  in international regulatory cooperation and global competitiveness.  Appendix I provides a more detailed description of our objectives, scope,  and methodology.
We conducted this performance audit from March 2012 to August 2013,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: U.S. Agency Roles and Responsibilities
paragraphs: U.S. agencies have different responsibilities related to international  regulatory cooperation. For example, Commerce, State, USTR, OMB,  and USDA have government-wide responsibilities. Their roles and  responsibilities are determined primarily through statutes and executive  orders. U.S. treaty obligations also influence their activities, as shown in  table 1. To some extent these agencies bring structure and direction to  activities that are in practice pursued in a decentralized manner by  multiple agency participants.
U.S. regulatory agencies have varying missions, such as protecting public  health or safety, and engage in multiple activities to fulfill their missions.  Statutes establish agencies’ missions and establish the scope and limits  of each agency’s authority. Agencies often implement their statutory  missions by developing, issuing, and enforcing regulations. Agencies may  also need to comply with multiple procedural and analytical requirements  during the rulemaking process that precedes the issuance of regulations,  including participation in interagency review and coordination processes  summarized in table 1.
section_title: Regulatory Context
paragraphs: Regulation is one of the principal tools that the U.S. federal government  uses to implement public policy. Underlying federal regulatory actions is  the long-standing rulemaking process established by the Administrative  Procedure Act (APA). This act establishes broadly applicable federal  requirements for informal rulemaking, also known as notice and comment  rulemaking.the APA generally include four basic phases:   At a high level, domestic rulemaking activities governed by  1.  Consideration of regulatory action: The agency gathers information to  determine (1) whether a rulemaking is needed and (2) the range of  regulatory options.  2.  Development and issuance of proposed regulation: The agency drafts  a proposed regulation, including the preamble (the portion of the  regulation that informs the public of the supporting reasons and  purpose of the regulation) and the language in the regulation. The  agency also begins to address analytical and procedural requirements  and engages in interagency coordination and OMB review, where  required. After these are complete, the agency publishes the  proposed regulation in the Federal Register and requests comments  from the public.  3.  Development and issuance of final regulation: The agency responds  to public comments, completes analytical and procedural  requirements, engages in interagency coordination and OMB review  where required, and publishes the final regulation in the Federal  Register.  4.  Implementation of final regulation: The agency enforces compliance  with the final regulation and monitors its performance.
Various executive orders and guidance establish agencies’ processes  that govern international regulatory cooperation activities. Executive  Order 12866 established the basic principles and processes that help  guide and coordinate regulatory actions by executive agencies (other  than independent regulatory agencies). Three components of the order  are especially relevant to current regulatory cooperation efforts. First, the  order established general principles for government regulation, including  that agencies should assess the costs and benefits of available regulatory  alternatives. Second, the order established centralized review and  coordination of rulemaking, particularly by (1) requiring agencies to  submit draft significant regulations to OMB’s Office of Information and  Regulatory Affairs (OIRA) for interagency review before they are  published and (2) establishing the RWG to serve as a forum to assist  agencies in identifying and analyzing important regulatory issues Third,  the order required agencies to compile and make public their regulatory  agendas and plans, which include identifying the anticipated effects of  forthcoming regulations. Executive Order 13563 reaffirmed the principles,  structures, and definitions governing contemporary regulatory review that   Particularly relevant to this  were established by Executive Order 12866.report, the order states that the regulatory system must promote  competitiveness, and it also expanded expectations for agencies to  retrospectively review their existing regulations.
OMB periodically issues guidance to executive agencies on implementing  executive orders. One key example related to the regulatory review  orders discussed above is OMB Circular A-4, issued in 2003. The circular  provides OMB’s guidance on the development of regulatory analysis as  required under Executive Order 12866 and related authorities, defining  good regulatory analysis and standardizing the way benefits and costs of  federal regulatory actions are measured and reported. The circular  includes a brief paragraph about considering the impacts of federal  regulation on global markets and trade. In May 2011, USTR and OMB  released a joint memorandum restating U.S. trade obligations and  provided additional guidance to agencies on how to carry them out. In  particular, the joint memorandum stressed the importance of agencies’  attention to regulatory analysis requirements in prior executive orders and  OMB Circular A-4, as well as avoiding unnecessary barriers to trade as  specified in the Trade Agreements Act. The memo also encouraged  agencies to engage in international collaboration activities.
section_title: Trade Context
paragraphs: Some U.S. international regulatory cooperation efforts occur within the  context of trade policy and negotiations. Reducing foreign regulatory  barriers to trade is a key U.S. trade objective. In support of this objective,  international agreements and U.S. legislation enacting them encourage  and guide agencies’ participation in some international regulatory  cooperation activities. For example, the Uruguay Round Agreements Act  codifies the WTO Agreement on Technical Barriers to Trade (TBT  Agreement) and the WTO Agreement on the Application of Sanitary and  Phytosanitary Measures (SPS Agreement) and includes additional  international regulatory cooperation responsibilities. Several of the most  salient obligations are briefly described below.
For technical regulations, the TBT Agreement  requires members to use international standards or the relevant parts  of them as a basis for technical regulations where available and  appropriate, and, in certain instances, notify the WTO of proposed  regulations with possible trade impacts and consider comments  received before finalizing those regulations. Further, the TBT  Agreement states that regulations should be no more trade restrictive  than needed to fulfill a legitimate objective.
Specifically, TBT Agreement art. 2.2, 2.4, and 2.9.
For SPS measures (including measures to protect  animal or plant life from pests, diseases, or disease-causing  organisms as well as to protect human or animal life), the SPS  Agreement requires members to base their measures on existing  international standards, or where the measure results in a higher level  of protection, allows members to maintain or introduce their own  standard if there is a scientific justification. Members are also required  to ensure that their regulations are applied only to the extent  necessary to protect human, animal, or plant life or health. Members  are to notify the WTO at an early stage in the rulemaking if a  proposed regulation differs from an international standard and may  have a significant trade impact on other members, in order to receive  comments for consideration.
Free Trade Agreements (FTA): According to USTR, FTAs, such as  the U.S. Korea Free Trade Agreement, build on the disciplines of the  TBT Agreement, by providing for greater transparency. Some U.S.  FTAs also provide that interested parties and persons should be given  opportunities to comment on proposed measures. According to  Commerce officials, most of these bilateral trade agreements also  provide for more timely notification mechanisms than multilateral  mechanisms such as the TBT Agreement. Most of these bilateral  trade agreements also provide for more timely notification  mechanisms than multilateral mechanisms.
In addition to these finalized agreements, the United States has offered  proposals in ongoing Trans-Pacific Partnership negotiations toward a  trade agreement among 11 participating nations to promote transparency.  More recently, on February 13, 2013, President Obama and European  Union (EU) leaders announced their intention to launch negotiations on a  Transatlantic Trade and Investment Partnership. According to USTR, the  goals of the partnership include reducing the cost of differences in  regulation and standards by promoting greater compatibility,  transparency, and cooperation.
section_title: U.S. Agencies Engage in Six Primary Categories of International Regulatory Cooperation Activities
paragraphs: All agencies in our study reported that they engage in a range of  international regulatory cooperation activities. These activities include  U.S. agencies and foreign counterparts sharing scientific data, developing  and using the same international regulatory standards, and recognizing  each other’s regulations as equivalent. Cooperation can address both  existing and avoid future regulatory differences. These activities generally  fall into six broad categories, as shown in table 2 below. See appendix II  for details on the illustrative examples.
International regulatory cooperation activities involve bilateral and  multilateral governmental relationships and participation in third-party  organizations, such as standards-setting bodies. For example, some  agencies in our study participate in international organizations, such as  the World Organization for Animal Health (OIE) or the International  Organization for Standardization (ISO). International cooperation  activities may be formal or informal, ranging from participation in  international organizations established by international agreements to  informal regulatory information sharing and dialogues. International  regulatory cooperation activities may also occur on a government-wide  basis and address multiple sectors. For example, the U.S.-Canada  Regulatory Cooperation Council (RCC) is an effort to increase regulatory  transparency and coordination between the two countries. Action plans  exist in the areas of agriculture and food, transportation, health and  personal care products and workplace chemicals, the environment, and  cross-sectoral issues. Similarly, OMB, Commerce, and other federal  agencies also participated in the Asia-Pacific Economic Cooperation  (APEC) effort to share and promote good regulatory practices, such as  transparency and centralized review of regulations, among APEC  economies.
subsections: section_title: Agencies Cooperate Internationally to Fulfill Regulatory Missions
paragraphs: Agency officials said they engage in international regulatory cooperation  activities primarily because they are operating in an increasingly global  environment and many products that agencies regulate originate  overseas. For example, according to FDA’s Global Engagement Report,  the United States imports 80 percent of active pharmaceutical ingredients  and imports of FDA-regulated products have grown dramatically in recent  years. FDA reported that the agency engages in international cooperation  activities to ensure products produced overseas are safe for U.S.  consumers. Similarly, CPSC operates in an increasingly global  environment. According to CPSC, the value of U.S. imports under  CPSC’s jurisdiction has skyrocketed in recent years, with imports from  China more than quadrupling from $62.4 billion in 1997 to $301.0 billion in  2010. Moreover, in fiscal year 2012, 4 out of every 5 consumer product  recalls or 345 of 439 recalls involved imported products, making imports a  critical focus for CPSC.
Agencies also cooperate with foreign counterparts in an effort to gain  efficiencies. For example, EPA participates in an initiative on pesticides  through the Organisation for Economic Co-operation and Development  (OECD) that has resulted in regulatory efficiencies. OECD also reported  that, by accepting the same test results OECD-wide, unnecessary  duplication of testing is avoided, thereby saving resources for industry  and society as a whole. A 2007 study for the OECD Working Group on  Pesticides estimated resource savings of 33 to 40 percent as a result of  joint review by three to five countries, compared with each country  working alone. The study noted that the savings from reducing duplicative  expert evaluation work significantly outweighed the marginal increase for  project management, coordination, and travel. These tools and  approaches facilitate work sharing for regulators and help avoid costly,  duplicative testing by ensuring that the data developed and submitted in  one country can be used by other countries in reaching their regulatory  decisions.
Agencies’ efforts to cooperate on regulatory programs through  cooperative activities may also have the effect of facilitating trade and  supporting the competitiveness of U.S. businesses. FDA officials said that  international regulatory cooperation and harmonization has public health  benefits, promotes regulatory efficiency, and both also have indirect  competitiveness advantages for companies. FDA officials said that public  health regulatory and competitiveness goals are often complementary: by  upholding and enforcing scientifically valid standards, public health is  protected and promoted at the same time that companies benefit from a  level playing field that should make their products more competitive.  Moreover, bringing a quality, safe, effective new drug to market faster  yields health benefits for individuals because they have access to the  drug sooner as well as trade benefits for industry, which has access to  more markets.
In addition, U.S. agency officials said that when they participate in  international standards development, an existing U.S. regulation or policy  approach may be used as the basis for the international standard. When  other countries adopt U.S. approaches to regulations, it can lower  compliance costs and support competitiveness for U.S. businesses. For  example, EPA’s Office of Air and Radiation (OAR) officials said that OAR  worked within the World Forum for Harmonization of Vehicle Regulations  (WP.29) to urge the use of a U.S. regulation as the basis for a global  regulation on test procedures for off-highway construction vehicle  engines. OAR officials said U.S. manufacturers supported this effort  because U.S. manufacturers sell equipment internationally, and  complying with one set of regulations reduces their fixed costs.
section_title: 2012 Executive Order Outlines New Processes for International Cooperation, but Agencies Could Benefit from Additional Collaboration
paragraphs: There are four interagency review processes routinely used to identify  and review regulations that could have trade or competitiveness impacts  and to encourage international regulatory cooperation.
OMB officials said that a process for interagency coordination with  OMB, USTR, State, and Commerce on regulations is the centralized  regulatory review process under Executive Orders 12866 and 13563.  USTR officials said they work with agencies as needed on regulatory  issues that have an international impact prior to the interagency  regulatory review process. However, the interagency review process  ensures OMB, USTR, State, and Commerce another opportunity to  provide input on any proposed significant regulation from agencies  whether or not international impacts were raised earlier. Independent  agencies are not required to participate in the interagency review  process.
The May 2012 Executive Order 13609 on promoting international  regulatory cooperation establishes processes for agencies to report  on efforts in this area. The order requires agencies that are required  to submit a regulatory plan to report a summary of their international  regulatory cooperation activities that are reasonably anticipated to  lead to significant regulations in their regulatory plans. It also requires  agencies to identify regulations with significant international impacts in  the Unified Agenda, on Reginfo.gov, and on Regulations.gov.
Generally, all U.S. federal agencies are required to consult with State  before concluding international agreements. State is responsible for ensuring that any proposed international  agreement is consistent with U.S. foreign policy. State officials said  that the Secretary of State must be consulted on international  regulatory cooperation issues involving the negotiation or signing of  international agreements or arrangements.
The Trade Agreements Act, as amended, requires U.S. agencies to  coordinate in specified circumstances, standards-related trade measures as part of their overall statutory  responsibilities.
22 C.F.R. § 181.4(a).
For example, USTR is required to coordinate international trade policy issues that arise  as a result of implementation of the WTO TBT agreement. USTR is also required to inform  and consult any federal agencies having expertise in the matters under discussion or  negotiation in coordinating U.S. discussions and negotiations with foreign countries for the  purpose of establishing mutual arrangements with respect to standards-related activities.  USTR also must consult with the cited agency and members of the interagency trade  organization if a foreign government makes a representation to the USTR alleging that a  U.S. standards-related activity violates U.S. TBT obligations.  Commerce and USDA must  coordinate with USTR with respect to TBT international standards-related activities that  may substantially affect the commerce of the United States. Furthermore, with regard to  TBT obligations, the Secretaries of Commerce and USDA have a role in assuring  adequate representation of U.S. interests in international standards organizations, and  encouraging cooperation among federal agencies so as to facilitate development of a  unified U.S. position. processes, such as activities related to information sharing and scientific  collaboration, capacity building, or the use of international standards in  regulations that are not significant.
OMB and USTR also lead interagency forums on regulations and trade  that have different responsibilities related to international regulatory  cooperation. Executive Order 13609 assigns responsibilities to the  Regulatory Working Group (RWG), chaired by OMB’s Administrator of  OIRA, to serve as a forum to discuss, coordinate, and develop a common  understanding among agencies of U.S. government priorities for  international regulatory cooperation. According to OMB officials, the RWG  provides a forum to foster greater cooperation and coordination of U.S.  government strategies, including those for promoting regulatory  transparency, sound regulatory practices, and U.S. regulatory  approaches abroad. OMB officials also said that the RWG is developing  guidance to implement the executive order. USTR chairs the policy-level  Trade Policy Staff Committee (TPSC), which maintains U.S. interagency  mechanisms for trade policy coordination among State, Commerce, the  Department of Labor, USDA, and other appropriate agencies. The TPSC  identifies and addresses foreign government trade measures among  other duties. USTR officials said USTR coordinates with agencies on  trade issues related to regulations at the working level through the TPSC  subcommittees on technical barriers to trade and sanitary and  phytosanitary barriers to trade. USTR explained that these  subcommittees are involved in supporting international regulatory  cooperation by anticipating and resolving potential regulatory conflicts  that could impair trade. USTR officials also noted that at the TPSC  subcommittee level, USTR coordinates with officials from regulatory  agencies in preparing for participation in international cooperation  activities, such as APEC meetings, as well as regulators’ involvement in  international standards development.  Nevertheless, some agency  officials reported that greater coordination between regulatory forums and  trade forums could improve outcomes. USTR officials also said there is  uncertainty about the implementation of Executive Order 13609 and how  it will relate to USTR’s trade responsibilities. According to OMB officials,  one of the main objectives of Executive Order 13609 is to improve  coordination of international regulatory cooperation. They anticipate that  forthcoming guidance on Executive Order 13609 will address  collaboration with the RWG and other interagency groups, particularly the  TPSC.
Beyond these forums for interagency coordination, regulatory agency  officials we interviewed said the current processes could benefit from  better information sharing among agencies on the implementation of  international regulatory cooperation activities and lessons learned. We  have previously found that it is important to ensure that the relevant  participants have been included in the collaborative effort, including those  with the knowledge, skills, and abilities to contribute to the outcomes of  the collaborative effort.level, government-wide policy discussions, and participants in the RWG  and TPSC are higher level management or policy officials who may be  somewhat removed from the technical activities that underpin rulemaking.
The RWG and TPSC are designed for high- Regulatory agency officials we interviewed pointed out that additional  ways to facilitate exchanges about best practices and day-to-day  implementation would be helpful. An agency official said that there may  be a benefit to having an interagency dialogue, working group, or other  forum through which officials can share information on challenges and  successes in implementing international regulatory cooperation. For  example, officials said EPA and FTC both have regulations related to  labeling and there may be opportunities that could result from sharing  information and best practices with international regulators. Agency  officials we interviewed identified another example illustrating the  potential benefits of staff-level exchanges and information sharing during  a multiagency meeting on this report. The officials that we interviewed  said it is challenging to measure the outcomes of international regulatory  cooperation activities and there is a need for an appropriate metric to  show the value of funds spent on these activities. EPA officials we  interviewed stated that in one case they successfully quantified the  benefits from work with OECD’s Mutual Acceptance of Data program.  According to EPA, the implementation of this decision has saved both  governments of 34 member countries and industry nearly $225 million  annually and also generated many nonquantifiable benefits, such as  promoting animal welfare in chemical testing. Officials attending a GAO  multiagency meeting said similar practices would be helpful to justify  investments in international regulatory cooperation activities. Agency  officials we interviewed said they found a multiagency meeting on this  report useful in part because the meeting involved discussions of day-to- day implementation of these issues. Further, Commerce officials  suggested that enhanced coordination among participants in these  forums would also benefit from including existing interagency standards  policy groups, such as the Interagency Committee on Standards Policy  and the National Science and Technology Council’s Subcommittee on  Standards.  Without some enhancements to the current forums for  regulators and trade officials to collaborate, opportunities to share  practices and improve safety and regulatory efficiencies and to reduce  trade barriers could be missed. Agency officials said there is currently not  a forum to meet this need.
section_title: Nonfederal Stakeholders Report Challenges to Providing Input into Agencies’ International Regulatory Cooperation Activities
paragraphs: Although nonfederal stakeholder input into regulatory processes is  important, the stakeholders we spoke with said it can be challenging for  them to provide input into agencies’ international regulatory cooperation  activities because of the required resources and the difficulty of becoming  aware of such activities. Congresses and Presidents have required  agencies to comply with multiple procedural requirements in an effort to  promote public participation in rulemaking, among other goals. For  formal international regulatory cooperation, such as standards setting,  according to nonfederal stakeholders, they can directly observe  international meetings and provide input in some cases. However,  nonfederal stakeholders told us that high levels of resources are required  to participate in international meetings, which can limit participation in  practice. For informal international cooperation activities, nonfederal  stakeholders said it is even more challenging to track and provide input  into the agencies’ activities because some activities described to us by  regulatory agencies precede the decision to regulate and therefore may  not be transparent to the public. While it is generally challenging for  nonfederal stakeholders to provide input into U.S. agencies’ international  regulatory cooperation activities, it is particularly important that  stakeholders at least have the opportunity to participate and advise  agencies when those activities are anticipated to lead to the development  of regulations. However, further complicating nonfederal stakeholders’  efforts, there is no single source of public information on anticipated U.S.  and foreign rulemakings with an international impact. For example, the  Unified Agenda and OMB Regulatory Review Database both identify U.S.  regulations that have an international impact. The Unified Agenda  includes regulations under development or review, while the OMB  Regulatory Review Database includes significant regulations submitted to  OMB for review. In addition, the WTO maintains databases on certain  member countries’ proposed regulations related to technical barriers to  trade and sanitary and phytosanitary measures—namely those self- identified as having potential trade impacts or involving divergence from  international standards.
Agency officials we interviewed agreed that stakeholder involvement is  important and nonfederal stakeholders are uniquely positioned to identity  and call attention to unnecessary differences among U.S. regulations and  those of its trading partners. Agencies and nonfederal stakeholders told  us that the U.S.-Canada RCC has implemented practices to engage  nonfederal stakeholders. For example, the 29 work plans that make up  the RCC were developed in part from the response to a Federal Register  request for public comments concerning regulatory cooperation activities  that would help eliminate or reduce unnecessary regulatory divergences  in North America that disrupt U.S. exports. Stakeholder outreach activities  are also included in the work plans. OMB is also taking steps to increase  the transparency of agencies’ international regulatory cooperation  activities and included new reporting requirements for agencies in  Executive Order 13609. The order directs agencies that are required to  submit a regulatory plan to include summaries of their international  regulatory cooperation activities that are reasonably anticipated to lead to  significant regulations. An agency official also cautioned it may not be  realistic for agencies to report all international regulatory cooperation  activities as many are informal in nature.
section_title: Agencies Consider International Regulatory Cooperation and Competitiveness during Rulemaking in Different Ways International Regulatory Cooperation Activities Inform Different Phases of Rulemaking
paragraphs: Agency officials we interviewed reported that the outcomes from  international regulatory cooperation can inform all phases of the  rulemaking process, from affecting an agency’s decision whether or not to  regulate in a particular area to implementing and enforcing regulations.  According to an agency official, there is no bright line that separates  international regulatory cooperation activities from regulatory programs.  For example, U.S. agencies share scientific and technical information with  their foreign counterparts, which can inform all stages of the rulemaking  process. In addition, information sharing can help inform an agency’s  decision on whether or not to regulate a product. When countries have  differences in regulations in a particular area, there are opportunities to  coordinate on the science underlying regulatory decisions in a particular  area. EPA Office of Chemical Safety and Pollution Prevention (OCSPP)  officials said that for chemical safety regulations, countries are working  within different statutory and regulatory frameworks and different levels of  acceptance of risk that can make it difficult to reach full agreement on a  regulatory approach. In such cases, sharing information with foreign  counterparts can facilitate agreement on a common understanding of the  issue or on underlying technical or scientific issues. According to officials  that we interviewed, OCSPP also focuses on transparency and good  regulatory practices, which lead to commonality between policies, work  sharing on scientific reviews, and greater harmonization in the long term.
Some international regulatory cooperation activities, such as the  development of international standards or practices, can inform and  contribute to the development and issuance of a proposed regulation.  Certain U.S. agencies reported that they coordinate with organizations  that develop international standards and may use these standards when  developing domestic regulations. For example, DOT’s Pipeline and  Hazardous Materials Safety Administration (PHMSA) participates in the  United Nations (UN) Transport of Dangerous Goods (TDG)  Subcommittee, which develops UN Model Regulations for the  transportation of hazardous materials. In an effort to align with any  changes to the UN Model Regulations, PHMSA considers these model  regulations in a rulemaking every 2 years. As a result, related U.S.  regulations are more closely aligned with trading partners and there are  fewer country-unique regulations for businesses to comply with, which  leads to improved safety results. According to PHMSA officials that we  interviewed, when regulations are the same in different countries it  enhances compliance and improves the efficiency of the transportation  system by minimizing regulatory burdens and facilitating effective  oversight. Similarly, Commerce officials pointed out that regulators often  use common technical standards as the basis for regulation, which can  reduce the burden on the regulated community.
Other international regulatory cooperation activities are related to the  implementation of regulations, such as equivalency agreements that  assure compliance with U.S. requirements and capacity building. For  example, USDA’s Agricultural Marketing Service (AMS) manages  equivalency agreements for organic food labeling. The U.S. equivalence  arrangement with the EU allows organic products certified in Europe or  the United States to be sold as organic in either region. According to AMS  officials, equivalency agreements result in expanded market access,  fewer duplicative requirements, and lower certification costs for organic  products. Previously, businesses that wanted to trade organic products  had to obtain separate certifications for both the United States and EU,  which meant a second set of fees, inspections, and paperwork. Agencies  also engage in capacity building and provide technical assistance to  countries to help foreign businesses comply with U.S. regulations when  exporting to the United States. For example, FDA developed a  comprehensive international food safety capacity-building plan in  response to a requirement in the FDA Food Safety Modernization Act.  The plan establishes a strategic framework for the FDA, describes an  approach that is based on prioritizing risks to U.S. consumers, and  focuses on addressing system weaknesses working with foreign  government and industry counterparts and other stakeholders. Agencies  also engage in work-sharing arrangements with their foreign counterparts  to gain efficiencies in the implementation of regulatory programs. For  example, under the United States-Canada Beyond the Border Initiative,  USDA’s Animal and Plant Health Inspection Service (APHIS) conducted a  joint foot and mouth disease site visit in Colombia as part of the  evaluation of Colombia’s request to export fresh beef. Coordinated  inspections allow agencies to leverage resources with their foreign  counterparts to fulfill their regulatory responsibilities. OIRA also engages  in activities to strengthen the capacity of developing countries in several  contexts, including APEC and work with Brazil, Vietnam, and Morocco.
Some international regulatory cooperation activities that U.S. agencies  shared with us are on products that are not regulated by U.S. agencies.  Agencies do not issue regulations through programs where participation  is voluntary but still may coordinate with foreign counterparts. For  example, DOE is working with other countries through the Efficient  Electrical End-use Equipment (4E) Implementing Agreement on efficiency  and performance criteria and metrics, test methods, and qualified testing  laboratories for new technology for solid state lighting. DOE officials said  coordination on solid state lighting is important, because without a  common agreement, it would be more difficult for products to enter the  world market. Standardized labeling also helps customers understand the  product they are buying and how its efficiency compares with other  products.
subsections: section_title: While Executive Orders and Guidance Encourage U.S. Agencies to Consider Competitiveness Impacts during Rulemaking, There Is No Requirement to Conduct a Separate Analysis
paragraphs: For regulations deemed significant under Executive Orders 12866 and  13563, U.S. agencies are required to assess the costs and benefits, but  there is no requirement for agencies to conduct a separate analysis on  competitiveness impacts when developing regulations. Among the  general principles of regulation under Executive Order 13563 is that the  U.S. regulatory system should promote economic growth, innovation,  competitiveness, and job creation. Moreover, according to executive  orders on regulatory review, among the possible effects that agencies  should consider are the significant adverse effects on the ability of U.S.  companies to compete in domestic and foreign markets. Moreover, OMB  Circular A-4’s discussion on global competitiveness states: “The role of  Federal regulation in facilitating U.S. participation in global markets  should also be considered. Harmonization of U.S. and international rules  may require a strong Federal regulatory role. Concerns that new U.S.  rules could act as non-tariff barriers to imported goods should be  evaluated carefully.” Further, these executive orders and related guidance  do not apply to independent agencies. The concept of competitiveness  is a general one, referring to the set of institutions, policies, and human  and natural endowments that allow a country to remain productive.
Depending on the circumstances, the focus of analysis could vary. Here,  in the context of international regulatory cooperation, improvements to  competitiveness might arise from lowering the cost of a firm’s compliance  with other countries’ standards or expanding access of U.S. products to  foreign markets. However, documenting the effect of the removal of  barriers on firm cost and sales presents challenges because data on  individual firm performance may not be available and because the effect  of the regulatory action may be difficult to isolate. Still, in some cases, it  may be possible to describe effects in terms of magnitude and direction.
When agencies develop regulations related to international activities,  officials from five of the seven agencies in our study told us that they  consider competitiveness as needed. Officials from two agencies in our  study provided examples of analysis of competitiveness impacts in the  rulemaking record. Agency officials said competitiveness impacts for  some rulemakings are likely to be indirect and may not rise to the level of  inclusion in the rulemaking record. For example, according to officials,  APHIS’s regulations focus on preventing the introduction and spread of  pests and diseases of livestock and plants. The officials explained it is  difficult to point to any APHIS regulations that can be said to have a direct  effect on the ability of U.S. businesses to compete in the marketplace. In  another example, officials from DOT’s PHMSA said their regulations  related to pipeline safety are for pipelines within the United States. When  included in the rulemaking record, competitiveness is likely to be a  secondary or tertiary effect in rulemaking analysis. For example,  according to OAR officials, most OAR rulemakings have few if any direct  impacts on competitiveness. These impacts, if any, would likely be  secondary or indirect. They said that competitiveness analysis, when  appropriate, might examine whether increased production costs for a U.S.  business may put it at a competitive disadvantage compared with a  similar company in a different country that is not required to comply with a  similar environmental regulation.
Some agency officials we interviewed said competitiveness impacts can  be challenging to identify, difficult to quantify, and resource intensive to  complete and that they do not have tools to consider competitiveness  during rulemaking. According to DOT’s National Highway and Traffic  Safety Administration (NHTSA) officials, NHTSA has never addressed the  competitiveness of U.S. businesses in any of its analyses. NHTSA does  not have tools for analyzing the effects of its safety standards on the  competitiveness of U.S. businesses. For at least 10 years, NHTSA and  DOT’s Volpe Center have attempted to create a consumer-marketing  model to help estimate the impact of the fuel economy program on sales  and have been unsuccessful to date.the impact on competition of a relatively small safety standard, when  NHTSA cannot do it for the enormous fuel economy standard, does not  seem to be a good use of resources.
They said that trying to determine  However, officials from one agency we interviewed said that  competitiveness impacts are assumed to exist when they are aligning  regulations with trading partners, but agencies do not do a separate  analysis. For example, according to PHMSA officials, PHMSA’s  harmonization rulemakings are premised on the assumption that  harmonized standards reduce costs for businesses and therefore reduce  barriers to trade. Specific cost-benefit analysis, however, is generally  associated with comparing the estimated costs of a regulation with the  safety and efficiency benefits associated with a specific change and not  directly associated with competitiveness of U.S. businesses. Further, the  TBT Agreement explains that using international standards as the basis  of a technical regulation adopted for a specified legitimate objective shall  be rebuttably presumed to not create unnecessary obstacles to  international trade.
section_title: U.S. Agencies Report Considering International Standards during Rulemaking
paragraphs: Illuminating Engineering Society, and others. Many of these test  standards are referenced in, or used as the basis for, standards  developed by organizations, such as the International Electrotechnical  Commission, ISO, or other international standards-setting organizations.  Agencies may also consider approaches taken by other countries. For  example, in the development of a crib safety regulation, CPSC staff  reviewed requirements of existing voluntary and international standards  related to cribs. The primary standards currently in effect are CPSC  standards for full-size cribs, which reference the ASTM voluntary  standard; a Canadian standard; a European standard; and an Australian  and New Zealand standard. ASTM considered the existing international  standards in the development of the current ASTM voluntary standard.
The TBT Agreement includes requirements to use international standards  or their relevant parts as the basis for technical regulation where available  and appropriate; to participate in international standards development,  within the limits of their resources; and to avoid unnecessary obstacles to  trade. Similarly, under the National Technology Transfer and  Advancement Act of 1995, agencies are required to use technical  standards that are developed or adopted by voluntary consensus  standards bodies unless they are inconsistent with applicable law or  otherwise impracticable. If using standards other than voluntary  consensus standards, agencies are also required to provide an  explanation to OMB. Further, Executive Order 13609 on promoting  international regulatory cooperation includes a requirement that for  significant regulations that the agency identifies as having significant  international impacts, agencies consider, to the extent feasible,  appropriate, and consistent with law, any regulatory approaches by a  foreign government that the United States has agreed to consider under a  regulatory cooperation council work plan. DOT, CPSC, FDA, and USDA  have some additional agency-specific documents related to considering  international standards during rulemaking.
section_title: Key Factors Can Positively or Negatively Affect the Outcomes of International Regulatory Cooperation Activities
paragraphs: Agency officials that we interviewed identified seven factors that have the  greatest impact on improving the effectiveness of international regulatory  cooperation. Some of these factors can facilitate agencies’ efforts if  present in international regulatory cooperation activities while others can  also act as a barrier when absent. In an environment of constrained  budgets, agencies may not be able to address the factors equally, so it is  particularly important for agencies to focus on the factors that facilitate  their efforts. Therefore, as part of our evaluation, we ordered the factors  in table 3 below based on discussions and written responses from  agencies.
As another part of our evaluation of these factors, we found that they  align with each of the key features important for agencies to consider  when implementing collaborative mechanisms. In September 2012, we  identified features that agencies could benefit from considering when  implementing interagency collaborative mechanisms. For example, we  found that: (1) resources are a key feature because collaborative efforts  can take time and resources in order to accomplish such activities as  building trust among the participants, setting up the ground rules for the  process, attending meetings, conducting project work, and monitoring and  evaluating the results of work performed; (2) establishment of agreements  in formal documents can strengthen an agency’s commitment to working  collaboratively; and (3) leadership is important to all collaborative efforts,  but agencies have said that transitions within agencies or inconsistent  leadership can weaken the effectiveness of any collaborative mechanism.  We used those features as criteria to determine whether the seven main  factors that agencies and stakeholders identified as affecting international  regulatory cooperation reflected consideration of each of those issues.  We applied these criteria by comparing agencies’ characterizations of the  seven key factors affecting international regulatory cooperation to the  specific questions identified in our 2012 report for agencies to consider  when implementing collaborative mechanisms. That comparison  demonstrated that one or more of the seven key factors corresponded to  each of the features of effective collaborative mechanisms.
GAO-12-1022. reoccurring cooperation after implementation of regulations may be less  resource intensive to maintain through monitoring of developments in  foreign countries and by directly participating in formal and informal  meetings. USDA Foreign Agricultural Service (FAS) officials also pointed  out that it can take a long time before payoffs or results from resources  invested in international regulatory cooperation become apparent.
Agency officials that we interviewed also identified some challenges to  securing and sustaining resources for international regulatory cooperation  activities. For example, officials said that international cooperation may be  viewed as too resource intensive to inform each individual regulatory  activity. Officials also said that investment in international regulatory  cooperation is viewed in some agencies as optional if it conflicts with  other priorities and responsibilities when the same staff members are  needed for other regulatory activities. One FAS official said that one of  the greatest resource constraints is securing the availability of regulators  in his department. Agency officials said that their foreign counterparts  also face resource constraints that may affect their participation in two  ways. First, resource constraints may limit their ability to participate in  international regulatory cooperation activities. Second, such constraints  may encourage foreign counterparts to leverage their limited resources  with the United States and other partners when the issues line up with  their own priorities.
Officials identified some opportunities for leveraging funds from other  agencies to participate in international activities on an ad hoc basis. To  encourage compliance with the TBT Agreement, U.S. law authorizes the  United States Trade Representative and the Secretary concerned to  make grants to and enter into contracts with any other federal agency to  assist that agency in implementing programs and activities such as  participating in international standards-related activities. For instance,  one industry official said that agencies are going to have fewer resources  and therefore should be interested in leveraging their resources with other  countries as early as possible. Agency officials confirmed that there are  opportunities for them to leverage funds from United States Agency for  International Development (USAID) and State to participate in  international meetings. In addition, USTR officials said that their agency is  able to leverage funds that are not available to other U.S. agencies and  can match funds for regulators to meet with their foreign counterparts in  an international setting, such as through APEC meetings. U.S.  participation in international regulatory cooperation can be a multi-agency  effort. However, officials from a different agency also cautioned that such  funds tend to be limited to efforts that involve developing countries and  expressed concern that they are unlikely to be used to support regulators’  participation with the EU. With reductions to the federal budget, the  money available to support regulatory cooperation may shrink.
Established processes. According to agency officials, having defined  long-term processes and accountability mechanisms in place for working  with foreign counterparts can facilitate international regulatory  cooperation. Officials also said that such established processes can  increase transparency for stakeholders and better enable input. Agencies  said that defined processes developed through international agreements,  including forums, international procedures, and other international  mechanisms, are helpful. Agreements, such as the WTO SPS  Agreement, require members to consider international standards during  their process to develop regulations. The WTO SPS Agreement generally  obligates members to base their regulations on sanitary or phytosanitary  measures on international standards from Codex, OIE, or the  International Plant Protection Convention unless they have scientific  justification or have determined a different level of protection through a  risk assessment. In our September 2012 report, we concluded that the  establishment of agreements in formal documents can strengthen an  agency’s commitment to working collaboratively. Similarly, officials from  DOT’s PHMSA said established processes for the UN TDG  Subcommittee facilitate their cooperative efforts. The OECD also has  established processes on chemicals in their rules. The binding nature of  OECD rules ensures all countries abide by the requirements to accept  data from other OECD members, which helps advance its international  regulatory coordination efforts.
High-level leadership. Agency officials told us in our interviews that  high-level leadership within an agency and leadership from outside the  agency can facilitate international regulatory cooperation, but a perceived  lack of high-level commitment or changing priorities can serve as barriers.  One academic expert said that the only way that international regulatory  cooperation will work is with high-level attention from the White House,  OMB, USTR, and the State Department. In addition, OMB officials we  interviewed said high-level support and leadership is essential to the  success of international regulatory cooperation. They also stressed that  regulatory agencies must have buy-in themselves, rather than be coerced  into international regulatory cooperation by outside agencies. Similarly,  Commerce’s International Trade Administration (ITA) officials said that  executive orders and presidential initiatives, such as Executive Order  13609, the U.S.-Canada RCC, the U.S.-Mexico High Level Regulatory  Cooperation Council, APEC leaders’ meetings, and the North American  Leaders Summit, have increased visibility, encouraged action from the  regulatory community, and prioritized events related to international  regulatory cooperation. Agency officials said that commitment of  resources is an indicator of top-level support. Agencies also said that  active participation by agency leadership with foreign counterparts can  expedite and facilitate progress at key points. FDA officials said that, in  their experience, when the heads of agencies have an ongoing active  relationship with their counterparts in foreign countries, international  regulatory cooperation is more likely to produce results.
Agencies told us that it can be challenging when leadership priorities  change, such as when a new administration establishes different  priorities, because international regulatory cooperation activities are long- term efforts. Shifting political priorities can lead to short-term  commitments that can make it difficult for agencies to see projects  through to the end. Officials said that agencies need high-level  commitment, but if it wanes agencies can be left part way into a long-term  project. In our September 2012 report, we concluded that, given the  importance of leadership to collaborative efforts, transitions and  inconsistent leadership can weaken the effectiveness of any collaborative  mechanism.
Scientific and technical exchanges. Sharing scientific and technical  information facilitates international regulatory cooperation and includes  coordination on testing, enforcement, and compliance issues, but, as  explained later, can also be restricted by statutory authority. The FTC  provides technical assistance to other countries in developing their  regulatory policies. When countries disagree on the appropriate policy or  standards, they can sometimes find agreement on the underlying  scientific and technical basis for regulations. According to FDA officials,  the regulations for medical products are more science based, while those  for food are more culture based, so FDA has more success with  international coordination on medical products. Collaboration and sharing  of data can lay the groundwork for future coordination. An independent  advisory agency developed a report that stated that the mutual trust  between regulators is an opportunity for work sharing because agencies  do not have to duplicate tests or science which allows them to share their  workload with foreign counterparts, move limited inspectors or transfer  other resources to areas of greater need. However, some statutes may  restrict scientific and technical exchanges because of limits on the  disclosure of information with foreign counterparts which is further  discussed within the section on statutory authority.
Stakeholder involvement. Agencies we interviewed identified  coordination with nonfederal stakeholders, such as industry groups,  academic experts, and consumer groups, as a facilitator of international  regulatory cooperation. An FDA official said that nonfederal stakeholders  may be uniquely positioned to identify unnecessary differences in  regulations and standards between countries and help agencies prioritize  which differences would be most meaningful to address from their  perspective. For example, FTC officials said that in developing the work  products of the International Competition Network (ICN) a significant  number of business users and nongovernmental advisors bring attention  to issues, provide outside perspectives, help produce work products, and  encourage implementation, even though government agencies are the  members that ultimately accept the work by consensus.
Some agency officials and nonfederal stakeholders reported challenges  to stakeholder involvement. Regulatory cooperation can be more difficult  to resolve when nonfederal stakeholders have conflicting viewpoints  about regulations. For example, USDA officials said there can be  challenges when consumer advocacy groups and business advocacy  groups have different views that lead to lawsuits to prevent international  regulatory alignment. USDA officials said that the support for a U.S.- Canada pilot project for meat inspection was divided between businesses  that supported it and consumer groups that did not. In addition, one  industry group found that some regulatory agencies were unwilling to  actively engage foreign counterparts and U.S. industries to discuss U.S.  regulatory requirements that are adopted by other countries. A different  industry representative said that a regulatory agency he works with  independently created a division dedicated to international telecom issues  to work with foreign counterparts and developed a modular approval,  which gives industry more flexibility and shortens the time for product  approvals.
In addition, a consumer advocacy stakeholder said that it would be helpful  to set government-wide policies and definitions through a notice and  comment period. For example, federal agencies do not employ the same  definition of “equivalency,” and it would be helpful if there was a specific  government-wide policy that stated that the result of international  regulatory cooperation cannot lower domestic standards.
Statutory authority. Agencies we interviewed said that statutory  authority may facilitate or limit their international regulatory cooperation  activities. For example, DOT PHMSA officials said that statutory authority  may mandate agency participation in international standards  organizations. An industry stakeholder said it would facilitate cooperation  if the underlying statutory authorities of agencies clearly permitted them to  engage in trade activities. However, when statutes are prescriptive  regarding domestic or rulemaking requirements, they can limit agencies’  ability to make changes to regulations that align with a foreign trading  partner. For example, agency officials said that statutes mandating use of  specific technologies can remove the flexibility to coordinate with foreign  counterparts. EPA officials also said that, in many instances, the Clean  Air Act requirements may limit the degree to which domestic regulations  can be altered to accommodate or conform to foreign or international  standards or approaches. Statutes that mandate completion of  rulemakings within short time frames can also limit agencies’ ability to  engage in harmonization. For example, CPSC officials said it was  challenging to work with other countries to reach consensus when CPSC  had been mandated by the Consumer Product Safety Improvement Act of  2008 to issue a large number of regulations in a short time frame, which  limited the amount of time they had to work with foreign counterparts.
Some agency statutes may limit disclosure of company-specific  information with foreign counterparts. This can prevent U.S. agencies  from sharing certain reports and scientific information with trusted foreign  counterpart agencies. In a previous report, we stated that, although the  addition of section 29(f) to the Consumer Product Safety Information Act  was intended to encourage information sharing, CPSC expressed  concern that restrictive language in this section hindered its ability to  share information.first step to scientific and technical exchanges with foreign counterparts is  removing existing legal, regulatory, or policy hurdles that limit or prohibit  data sharing between governments. For example, NHTSA officials we  interviewed said that they have many research, testing, and enforcement  activities that include restrictions on the transfer of information, which has  been a barrier to international regulatory cooperation. They said that  when a company discovered defects in tires in Germany, the information  was not immediately available in the United States to prevent injuries  because of an information-sharing restriction. Agency officials also noted  that, in addition to the removal of U.S. agency information-sharing  restrictions, it is essential that the hurdles that exist in other countries also  be removed.
An official from EPA OCSPP said that an important  Early and ongoing coordination. Early and ongoing coordination with  foreign governments in emerging areas before regulations are in place  may facilitate international regulatory cooperation. Agency officials we  interviewed said early and ongoing efforts are important to maintain  progress. OMB officials said it is easier to prevent unnecessary  differences than remove existing differences in regulations. For example,  CPSC attends multilateral forecasting sessions with other countries to  engage foreign counterparts before the rulemaking and standards setting  process begins. According to agency officials we interviewed, it is more  efficient for CPSC to align and prevent different regulatory approaches  with other jurisdictions before the U.S. notice and comment rulemaking  process begins. In another example, State officials we interviewed said  there is a need for international regulatory coordination to take place as  early as possible, before too many regulations are established in each  country. They said there are opportunities to avoid unnecessary  differences in regulations for nanotechnology, which can be applied to  many types of products. Currently, there are no entrenched regulatory  systems that would hinder cooperation on developing new standards.  Industry officials also said that it is important to coordinate on  requirements early by reviewing countries’ regulatory differences,  because fundamental differences between countries may require  changes on an issue-by-issue basis. They also urged early coordination  because regulatory agencies in other countries are establishing standards  when the manufacturing process has already been developed in the  United States, which does not work well for them within today’s markets.  One academic representative we interviewed said it is much easier for  agencies to coordinate with trading partners on new regulations than on  existing regulations.
According to agency officials we spoke with, early and ongoing  coordination with foreign counterparts also can identify issues that are not  ready for international regulatory cooperation. It is important to coordinate  early with their counterparts when there are differences between the  openness of the United States’ and other countries’ rulemaking  processes. Officials noted that, while other countries have the opportunity  to comment whenever a U.S. regulation is proposed, U.S. agencies and  nonfederal stakeholders may not have similar opportunities to comment  on foreign regulations.
section_title: Conclusions
paragraphs: With trade expanding and regulatory challenges growing, in recent years  the President and U.S. agencies have undertaken multiple initiatives to  focus attention on the importance of international regulatory cooperation.  While the executive order on promoting international regulatory  cooperation focuses on reducing trade barriers by reducing unnecessary  differences in regulations with U.S. trading partners, we found in our  review that U.S. agencies carry out numerous and diverse international  regulatory cooperation activities to improve the effectiveness of  regulations, gain efficiencies, and avoid duplicating work. The examples  agencies shared with us show that their efforts often achieve both trade  and regulatory efficiency goals. Ultimately it is clear that international  regulatory cooperation requires interagency coordination. No one U.S.  agency has the expertise or processes to effectively conduct these  activities. Not only must regulatory agencies collaborate with other U.S.  agencies, but they need to effectively collaborate with their foreign  counterparts and affected nonfederal stakeholders.
Overall coordination of international regulatory cooperation activities is  now handled by discrete processes with somewhat different focuses. U.S.  regulatory agencies focus primarily on their missions to protect public  health and safety and the environment, while USTR and Commerce,  among others, focus on trade. Therefore, it is important for the U.S.  government to effectively coordinate these interagency activities. Our  work at agencies engaged in regulatory cooperation efforts shows there  are opportunities to augment existing guidance and mechanisms that  could further promote and improve international regulatory outcomes. For  example, U.S. regulatory agency officials emphasized the benefits of  sharing information on lessons learned and best practices with their  peers. However, they believe the current processes are designed for top- level collaboration and do not sufficiently address the day-to-day  implementation of international regulatory cooperation. U.S. agencies and  nonfederal stakeholders also noted the importance of stakeholder input in  the success of international regulatory cooperation. Yet it is challenging  for stakeholders to stay apprised of agencies’ activities and therefore  provide input to agencies. Key next steps could focus on identifying tools  to measure outcomes as well as to document savings from more efficient  use of government resources. In an environment of constrained  resources it is even more important for agencies to share knowledge on  the effective implementation of international regulatory cooperation.
section_title: Recommendation for Executive Action
paragraphs: To ensure that U.S. agencies have the necessary tools and guidance for  effectively implementing international regulatory cooperation, we  recommend that the Regulatory Working Group, as part of forthcoming  guidance on implementing Executive Order 13609, take the following  action:
Establish one or more mechanisms, such as a forum or working  group, to facilitate staff level collaboration on international regulatory  cooperation issues and include independent regulatory agencies.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to Commerce, CPSC, DOE, DOT, EPA,  FTC, HHS, OMB, State, USDA, and USTR for their review and comment.   We received written comments on the draft report from DOE, and CPSC  in which they agreed with the recommendation to the RWG. Their  comments are reprinted in Appendices III and IV. In an email received on  July 30, 2013, the Deputy General Counsel, Office of Management and  Budget, stated that OMB had no comments on the recommendation in  this report. However, OMB provided technical comments which we  incorporated as appropriate. Commerce, CPSC, DOE, FTC, HHS, State,  USDA, and USTR also provided technical comments which we  incorporated as appropriate.
We are sending copies of this report to OMB (which chairs the RWG),  Commerce, CPSC, DOE, DOT, EPA, FTC, HHS, State, USDA, USTR,  and other interested parties. In addition, the report will be available at no  charge on GAO’s website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-6806 or sagerm@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) provide an overview of regulatory agencies’  international cooperation activities, (2) examine ways that agencies  incorporate outcomes from international regulatory cooperation activities  and consider competitiveness during rulemaking, and (3) examine factors  identified by agencies and nonfederal stakeholders that act as facilitators  or barriers to international regulatory cooperation and considering  competitiveness. To address these objectives, we selected seven U.S.  regulatory agencies out of 60 U.S. agencies that are included in the  Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified  Agenda), that issued regulations with international impacts and four U.S.  agencies with government-wide international coordination responsibilities.  Based on several sources we identified likely regulatory agencies that  issue regulations related to international trade. For example, we reviewed  the 2010 and 2011 Unified Agenda and data from the 2011 World Trade  Organization (WTO) Technical Barriers to Trade (TBT) Information  Management System. We also reviewed all major regulations from 2011.  We categorized the regulations with an international impact into  regulatory subject areas such as product safety, environmental, energy,  transportation of products, food, medical devices, drugs, and aviation.  The reason we categorized the regulations was to select groups of  regulations that affect global trade in products. In addition, we excluded  categories from our scope, such as taxation/taxes, patents, arms trade,  international waters, and trade agreements. We also tested the  databases used in agency selection by reviewing related documentation,  interviewing knowledgeable agency officials, and tracing a sample of  entries to source documents. We concluded the data were sufficiently  reliable for the purposes of this report. We also considered  recommendations from federal agency officials in selecting regulatory  agencies. From these varied efforts, for our review we selected the  Department of Energy (DOE), Food and Drug Administration (FDA),  Department of Transportation (DOT), Environmental Protection Agency  (EPA), and Department of Agriculture (USDA) as well as two  independent regulatory agencies including the Consumer Product Safety  Commission (CPSC) and the Federal Trade Commission (FTC). These  views are not generalizable to all U.S. agencies. Based on our  background research and suggestions from federal agencies we selected  four agencies with government-wide international coordination  responsibilities: Office of Management and Budget (OMB), Office of the  United States Trade Representative (USTR), Department of Commerce  (Commerce), and Department of State (State). Furthermore, using  criteria based on our September 2012 report on interagency collaborative  efforts, we also compared agencies’ documents and testimonial evidence  about their international regulatory cooperation activities to the seven key  features that we found agencies should consider when implementing  collaborative mechanisms to corroborate the agencies’ findings.
To obtain viewpoints outside of government, we chose 11 U.S. nonfederal  stakeholders which consisted of academics, organizations representing  businesses, consumer advocacy groups, standards setting organizations  and industry representatives, based on their recent reports or from  comments they made on international regulatory cooperation. We  originally selected one of each type of nonfederal stakeholder group  based on published views on international regulatory cooperation and  recommendations from agencies in our study but decided to add more  nonfederal stakeholders to our selection criteria to represent a diverse  range of members that represent business promotion, consumer  advocacy perspectives and neutral parties. These views are not  generalizable, but provided insights on international regulatory  cooperation.
For federal agencies and nonfederal stakeholders chosen for this  engagement, we conducted interviews and gathered documentation such  as concrete examples, facilitators, barriers, goals, outcomes, and  stakeholder involvement related to international regulatory cooperation  activities, rulemaking and global competiveness. We used this  documentary and testimonial evidence to identify government-wide and  agency-specific requirements related to rulemaking outcomes for  international regulatory cooperation and global competitiveness and  determined how these selected agencies consider related issues. After  analyzing our evidence for common themes and patterns, we developed  a summary document of factors that are facilitators or barriers to  international regulatory cooperation and held two meetings for agency  officials to reflect upon the meaning of the factors, and confirm their  importance. We summarized information gathered at these group  meetings to better describe the agencies’ perspectives. Throughout this  report, we use specific, selected examples to illustrate agency processes  and practices.
The scope of our inquiry was not comprehensive, generalizable, or  designed to be a complete catalog of international regulatory activities.  We conducted this performance audit from March 2012 to August 2013,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Examples of International Regulatory Cooperation Activities
paragraphs: Agencies provided us with examples of their international regulatory  cooperation activities. The examples below illustrate the types of activities  that agencies engage in to fulfill their regulatory missions and are not  meant to be a comprehensive catalog of agency activities in this area.
subsections: section_title: Information Sharing and Scientific Collaboration
paragraphs: Agencies share information with their foreign counterparts on scientific  data and regulatory approaches.
subsections: section_title: Pesticide Tolerance Crop Grouping Revisions Program
paragraphs: Agency: Environmental Protection Agency’s (EPA) Office of Chemical  Safety and Pollution Prevention (OCSPP)
Description: OCSPP shares information with the North American Free  Trade Agreement (NAFTA) partners and the international organization  Codex on its Pesticide Tolerance Crop Grouping Revisions Program.  EPA regulates pesticides by setting limits on the amount of pesticides that  remain in or on foods marketed in the United States under the Federal  Food, Drug, and Cosmetic Act. The Pesticide Tolerance Crop Grouping  Revisions Program enables the establishment of tolerances for a group of  crops based on residue data for certain crops that are representative of  the group. Representatives of a crop group or subgroup are those crops  whose residue data can be used to establish a tolerance on the entire  crop group or subgroup.
The project involves several interrelated multiyear efforts, including (1)  one with NAFTA partners in Canada and Mexico to revise the existing  crop groups in EPA’s regulations (40 CFR 180.41) to add new crops and  create new groups and subgroups; and (2) one in which NAFTA partners  are working with international stakeholders to modify the Codex crop  groups, to support global trade and the use of data extrapolation.  Petitions to revise the NAFTA crop grouping regulations are developed by  the International Crop Grouping Consulting Committee, a group of more  than 180 crop, agrichemical, and regulatory experts representing more  than 30 countries and organizations. NAFTA partners also are working  cooperatively with international stakeholders to revise the Codex system  of classification of foods and animal feeds and to revise the Codex crop  groups. Involvement by NAFTA member countries in the Codex process  should help standardize commodity terminology and crop groupings  within the global context.
Outcomes: Approved revisions to crop group regulations are formalized in  the United States through rulemaking. EPA is currently working on its  fourth crop grouping proposed regulation. Crop groupings also facilitate  international trade, including the market for pesticide products and the  crops treated. Pesticides with established tolerances in the United States  can be sold for use on crops grown in other countries that intend to import  those crops to the United States. Crops imported in the United States with  pesticide residues that do not have an established U.S. tolerance are  subject to enforcement action.
section_title: Organisation for Economic Co-operation and Development (OECD) Chemical Safety
paragraphs: Agency: EPA’s Office of Chemical Safety and Pollution Prevention  (OCSPP)
Description: The United States has participated in the OECD Joint  Meeting of the Chemicals Committee and Working Party on Chemicals,  Pesticides and Biotechnology, an organization with over 30 member  countries, for more than 30 years. Specific information sharing activities  include:
OECD eChem Portal: OCSPP shares information on industrial  chemicals and various data systems. The OECD eChem Portal allows  simultaneous searching of reports and datasets by chemical name  and number and by chemical property. The portal provides direct links  to collections of chemical hazard and risk information prepared for  government chemical review programs at the national, regional, and  international levels. The portal also provides, when available,  classification results according to national/regional hazard  classification schemes or to the Globally Harmonized System of  Classification and Labeling of Chemicals.
OECD (Quantitative) Structure-Activity Relationships   Toolbox: OCSPP’s (Q)SARs are methods for estimating properties of  a chemical from its molecular structure. The toolbox is a software  application for governments, chemical industry, and other nonfederal  stakeholders to fill gaps in (eco)toxicity data needed for assessing the  hazards of chemicals.
Outcomes: According to EPA, these tools and approaches reduce  compliance costs for nonfederal stakeholders, facilitate work sharing for  regulators, and help avoid costly, duplicative testing by ensuring that the  data developed and submitted in one country can be used by other  countries in reaching their regulatory decisions. These activities do not  directly result in rulemakings, but can inform rulemaking activities.
section_title: Pilot Alignment Initiative (PAI) on Consumer Product Safety
paragraphs: Agency: Consumer Product Safety Commission (CPSC)
Description: CPSC participates in an international pilot alignment initiative  with staff from the central consumer product safety authorities of  Australia, Canada, the European Union, and the United States. This ad  hoc group is not aligned formally with any existing multilateral forum. The  participants are to seek consensus positions on the hazards to children  and their potential solutions for three products: corded window coverings,  chair-top booster seats, and baby slings. The goal of this initiative is to  bring about effective, aligned safety requirements for these products to  reduce injuries and save lives. The consensus positions could be  considered and developed for implementation in each jurisdiction,  according to the jurisdiction’s preferred model, whether through regulation  or voluntary standards. Officials said that the consensus papers for baby  slings and chair-top booster seats are in progress.
According to CPSC officials, the PAI jurisdictions worked for 18 months to  reach consensus positions on corded window coverings, but the project  fell short of CPSC’s expectations. Officials said that the technical teams  from five jurisdictions agreed in principle that “no exposed cords” was the  best solution to the strangulation hazard, but the European Commission  had already publicly expressed an opposing position regarding the  elimination of cords. CPSC officials said that when the PAI work began,  the European Commission had already moved into policy development  and soon thereafter issued a mandate to the European Committee on  Standardization explicitly permitting safety devices to keep exposed cords  out of reach of children. As a result, the consensus paper recognized “no  exposed cords” as the best solution but did not call for their elimination as  a consensus approach.
Outcomes: According to CPSC officials, the PAI can result in similar  product safety requirements at a high level of safety among the  jurisdictions participating in the initiative.
section_title: Development and Use of International Standards
paragraphs: Agencies participate in international standards-setting bodies and  incorporate international standards into rulemaking as appropriate.
subsections: section_title: World Forum for the Harmonization of Vehicle Regulations (WP.29)
paragraphs: Agencies: Department of Transportation’s (DOT) National Highway Traffic  Safety Administration (NHTSA) and Environmental Protection Agency’s  (EPA) Office of Air and Radiation (OAR)
Description: WP.29 is a permanent working party created more than 50  years ago in the United Nations (UN) that administers three international  agreements on motor vehicles: (1) the 1958 Agreement concerning the  adoption of uniform technical prescriptions for wheeled vehicles,  equipment, and parts which can be fitted and/or be used on wheeled  vehicles and the conditions for reciprocal recognition of approvals granted  on the basis of these prescriptions, (2) the 1997 Agreement concerning  the adoption of uniform conditions for periodical technical inspections of  wheeled vehicles and the reciprocal recognition of such inspections, and  (3) the 1998 Agreement concerning the establishing of global technical  regulations for wheeled vehicles, equipment, and parts which can be  fitted and/or be used on wheeled vehicles. The WP.29 develops Global  Technical Regulations that are used in member countries’ regulations and  works as a global forum allowing open discussions on motor vehicle  regulations. NHTSA and OAR participate in the development of global  technical regulations. Nongovernmental organizations may also  participate in a consultative capacity in WP.29 or in its working groups.
Outcomes: NHTSA officials said WP.29 participation contributes to safety  in the United States because NHTSA leverages research with other  countries. Global Technical Regulations increase alignment between  countries. As a result, manufacturers have fewer country-specific  regulations to comply with when participating in foreign markets. NHTSA  uses Global Technical Regulations in rulemaking. For example, NHTSA  issued a final rule in August 2012 on motorcycle brake systems safety  standards to add and update requirements and test procedures and to  harmonize standards with a global technical regulation for motorcycle  brakes.
OAR officials said that OAR participated in an effort that focused on test  procedures for off-highway construction vehicle engines. According to  officials, this effort was undertaken after the completion of a domestic  regulation. U.S. manufacturers supported using U.S. regulation as the  basis of the Global Technical Regulation because U.S. manufacturers sell  equipment internationally, and complying with one set of regulations  reduces their fixed costs. Over 5 years OAR successfully worked within  the WP.29 to make the U.S. regulation the basis of the WP.29 Global  Technical Regulations. As a result, it has become the de facto standard  around the world.
section_title: UN Subcommittee on the Transport of Dangerous Goods (TDG Subcommittee)
paragraphs: Agency: Department of Transportation’s (DOT) Pipeline and Hazardous  Materials Safety Administration (PHMSA)
Description: PHMSA participates in the TDG Subcommittee, which,  according to PHMSA, is facilitated by two treaties: the Chicago  Convention on International Civil Aviation and the International  Convention for the Safety of Life at Sea. Officials said the TDG  Subcommittee was established because there was a need for  international coordination on the transport of dangerous goods.  Participants in the TDG Subcommittee include 29 countries with voting  status and numerous countries and nongovernmental organizations with  observer status. The TDG Subcommittee reviews proposals from voting  member countries and observers in relation to amendments to the UN  Model Regulations and issues relevant to its work program. PHMSA  represents the United States at these meetings and formulates U.S.  positions based on feedback from U.S. industry, the public, and other  government agencies. PHMSA ensures coordination on U.S. positions,  taking into account the interests of the DOT administrations and other  government agencies. PHMSA’s staff provides the technical support and  resources to ensure that the positions taken are sound and justified  based on pertinent data, technical analyses, and safety rationales.
Outcomes: PHMSA considers the standards developed by the TDG  Subcommittee in a rulemaking every 2 years in an effort to harmonize  with international changes. For example, in January 2013, PHMSA issued  a final regulation on harmonization with international standards for  hazardous materials. PHMSA amended the Hazardous Materials  Regulations to maintain alignment with international standards by  incorporating amendments, including changes to proper shipping names,  hazard classes, packing groups, special provisions, packaging  authorizations, air transport quantity limitations, and vessel stowage  requirements. The resulting cooperation leads to aligned regulations with  trading partners, fewer differences in regulations businesses must comply  with, and improved safety results (e.g., common labels for hazardous  materials). Harmonization of international and domestic standards  enhances compliance and improves the efficiency of the transportation  system by minimizing regulatory burdens and facilitating oversight.  International harmonization of hazardous materials regulations plays a  significant role in enhancing safe transportation through improved  regulatory consistency.
section_title: International Competition Network (ICN)
paragraphs: Agency: Federal Trade Commission (FTC)
Description: In October 2001, the FTC, Department of Justice (DOJ), and  13 other antitrust agencies founded the ICN to provide a venue for  agencies that regulate competition issues worldwide to work on  competition issues of mutual interest. The ICN has a broad  membership—127 agencies from 111 jurisdictions, which includes most  of the world’s competition agencies. The ICN works exclusively on  competition issues; develops consensual, nonbinding recommendations  and reports to bring about procedural and substantive convergence; and  provides a significant role for nongovernmental advisors from the  business, legal, consumer, and academic communities, as well as  experts from other international organizations. The ICN is organized into  working groups composed of agencies and nongovernmental advisors.  Current working groups address unilateral conduct, mergers, cartels,  agency effectiveness, and competition advocacy. The FTC led the merger  working group’s work on notification and procedures, which developed a  set of eight guiding principles and 13 recommended practices for merger  notification and review.
Outcomes: A major accomplishment of the ICN is that numerous  members adopted key aspects of ICN recommended practices, such as  those concerning merger thresholds. According to FTC officials, the  objective was to enhance the effectiveness of each jurisdiction’s merger  review practices and processes and promote procedural convergence,  thereby reducing unnecessary private and public costs and burdens  associated with merger review. FTC officials said FTC has not done any  rulemaking to implement the ICN recommendations because the  recommendations are consistent with U.S. approaches to merger  notification and review processes.
section_title: Equivalency Agreements
paragraphs: In some cases, the United States may enter an agreement with another  country to recognize other’s regulations and deem them equivalent to  those of the United States.
subsections: section_title: National Organic Program (NOP) Equivalency Agreements
paragraphs: Agency: United States (USDA) Agricultural Marketing Service (AMS)
Description: The AMS manages equivalency agreements for organic food  labeling. For example, the United States has an equivalency arrangement  with the European Union (EU), generally referred to as the Partnership,  under which organic products certified in Europe or the United States may  be sold as organic in either region. For retail products, labels or stickers  must state the name of the U.S. or EU certifying agent and may use the  USDA organic seal or the EU organic logo. Under the Partnership,  according to USDA, the EU and the United States agreed to work on a  series of technical cooperation initiatives to promote organic production  and establish common practices for assessing and recognizing organics  programs of third countries.
Outcomes: According to USDA officials, the EU-U.S. organic equivalency  arrangement reduces the cost of certification for organic producers and  handlers because producers and handlers only need to be certified under  one standard (either USDA organic regulations or EU organic regulations)  but can now access and sell in both markets. Another outcome is that  considering the respective countries’ standards as “equivalent” facilitates  international trade of organic products. According to AMS officials,  equivalency agreements will result in expanded market access; reduce  duplicative requirements and lower certification costs for the trade in  organic products; and decrease the burden of administration. The  agreements are also expected to open new possibilities for trade.  Previously, operations that wanted to trade organic products on both  sides of the Atlantic had to obtain separate certifications to meet both  standards, which meant a second set of fees, inspections, and  paperwork. Additionally, in most cases, the Partnership will provide  exporters the opportunity to serve both the U.S. and EU markets from a  single inventory of organic products.
section_title: Equivalence Determinations for the Import of Meat, Poultry, and Egg Products
paragraphs: Agency: USDA Food Safety and Inspection Service (FSIS)
Description: Food safety equivalency evaluations are based on provisions  in the Agreement on the Application of Sanitary and Phytosanitary  Measures, which appears in the Final Act of the Uruguay Round of  Multilateral Trade Negotiations, signed in Marrakech April 15, 1994.  Under the agreement, World Trade Organization (WTO) member  countries shall accord acceptance to the sanitary and phytosanitary  measures of other countries (even if those measures differ from their own  or from those used by other member countries trading in the same  product) if the exporting country demonstrates to the importing country  that its measures achieve the importer’s appropriate level of sanitary and  phytosanitary protection.
FSIS makes determinations of equivalence by evaluating whether foreign  food regulatory systems meet the level of protection provided by the U.S.  domestic system. FSIS evaluates foreign food regulatory systems for  equivalence through document reviews, on-site audits, and port-of-entry  re-inspection of products at the time of importation. FSIS regulations list  46 countries as eligible to export meat, 9 countries as eligible to export  poultry, and 2 countries as eligible to export egg products to the United  States.
Outcomes: According to FSIS officials, the equivalency determination  program has several benefits. One benefit is that the equivalence process  requires communication and participation by U.S. regulators with the  regulators in the country seeking (or already having) equivalence, which  usually leads to positive relationships between the two countries and  other intangible benefits. Another benefit to U.S. businesses is that it  gives them more market capacity where they obtain raw materials,  finished products, or both, which provides for potential costs savings  through the use of these additional choices for eventual sale to U.S. and  other consumers. U.S. consumers benefit because countries determined  to be equivalent are providing meat, poultry, and egg products that are as  safe as domestic products because the products meet U.S. appropriate  levels of protection. These additional products may also be less  expensive than products produced with U.S.-sourced ingredients.
section_title: Strengthening Capacity of Developing Countries
paragraphs: Most agencies in our study provide technical assistance to developing  countries. Agency officials said they work with countries to strengthen  their regulatory systems, among other reasons, to improve safety of  products imported into the United States.
subsections: section_title: Food and Drug Administration (FDA): Strengthening Global Regulatory Systems and Capacity
paragraphs: Description: FDA undertakes activities to improve the capacity of  governments to manage, assess, and regulate products within  increasingly complex supply chains. According to FDA officials, FDA  works to strengthen the global regulatory system and is a source of  expertise that engages in global dialogue and initiatives with regulatory  counterparts, development agencies, and global health partners. FDA is  developing an operating model that relies on building a global safety net  using four principles: global coalitions, global data systems, enhanced  risk analysis capacities, and leveraging the efforts of public and private  third parties. FDA’s Global Engagement Report outlines how FDA  supports and collaborates with regulatory systems around the globe.  While neither mandated nor funded as an international development or  training organization, FDA works with bilateral and multilateral partners,  domestically and internationally, to strengthen regulatory systems  capacities and competencies in various parts of the world in an effort to  ensure products that will be imported into the United States will be made  safer and supply lines more secure. Examples of some of FDA’s efforts  include development of information-sharing platforms and the provision of  evidence tools and expertise that contribute to strengthening regulatory  systems.
In response to Section 305 of the FDA Food Safety Modernization Act  (FSMA), the FDA developed an international food-safety capacity- building plan. The plan establishes a strategic framework for the FDA  and presents an approach based on prioritizing risks to U.S.  consumers. It focuses on addressing weaknesses in a food safety  system in partnership with foreign governments, industry  counterparts, and other stakeholders.
FDA supported the World Health Organization (WHO) in developing a  global monitoring and surveillance system for substandard, falsified,  and counterfeit medical products. The system was piloted in 10  countries over 3 months in 2012. This system will be scaled up  globally in the coming year.
FDA is actively involved in efforts to strengthen regulatory capacity  through its joint efforts with the World Bank, the WHO, the Gates  Foundation, Asia-Pacific Economic Cooperation (APEC), the African  Union, and others in the private and public sectors. By bringing its  regulatory and scientific expertise to these efforts, FDA can better  leverage the expertise of its partners to engage more efficiently and  broadly in enhancing regulatory capacity globally. Examples of such  initiatives include the World Bank/APEC initiative on food-safety  capacity building and the World Bank/Gates Foundation/WHO/African  Union efforts to enhance and rationalize regional regulatory capacity  in various African economic communities, starting with the East  African community.
section_title: Federal Trade Commission (FTC) Technical Assistance
paragraphs: Description: According to FTC officials, the FTC, in coordination with,  among others, USAID, U.S. Trade and Development Agency, and the  Department of Commerce, establishes relationships with developing  countries and provides technical assistance. FTC helps countries develop  and enhance their regulatory frameworks by encouraging convergence  with international standards. FTC’s technical assistance program helps  explain how competition, truthful advertising and marketing, and sensible  privacy frameworks advance economic efficiency, consumer welfare, and  consumer choice. To this end, FTC assists developing countries in their  transition to market-based economies and their development of  competition and consumer protection agencies and sharing approaches  to enforcement that are consistent with this goal. As part of its efforts, the  agency routinely provides input to its foreign counterparts about the  drafting and adopting of domestic legislative frameworks regarding  competition, consumer protection, and privacy. FTC also works to build  the capacity of its foreign counterparts to implement these frameworks  and promote their proper enforcement.
section_title: Animal and Plant Health Inspection Service (APHIS) Capacity Building
paragraphs: Description: APHIS participates in international regulatory capacity  building to help other regulatory entities meet U.S. standards and protect  health. Officials said APHIS actively builds international partners and  meets with foreign regulatory officials bilaterally and multilaterally. For  example, APHIS runs six to seven courses a year where it invites foreign  officials to the United States for training on U.S. processes. APHIS  officials said that APHIS annually trains 100 to 150 individuals from other  countries. The officials said these trainings provide education and  resources to foreign counterparts and build a network of individuals to  support U.S. efforts worldwide and help other countries comply with U.S.  regulations. APHIS also participates in multilateral capacity building on  SPS. Officials said, under the SPS agreement, there is a responsibility to  work with developing countries and APHIS has officials located overseas  who informally work with partners on a daily basis. APHIS also has formal  training programs overseas and in the United States.
section_title: Work Sharing
paragraphs: Agencies work with foreign counterparts on projects to share resources to  implement regulations and avoid duplicating efforts.
subsections: section_title: FDA Coordination on Inspections
paragraphs: Description: FDA partners with foreign counterparts to coordinate on  inspection activities. Foreign counterparts include:
European Medicines Agency (EMA): Significant opportunities exist for  FDA and EMA to leverage their inspection resources, and they are  exploring this potential through a series of activities. They observed  each other’s inspections and jointly inspected manufacturing sites in  the United States and the European Union (EU). Through this work,  FDA and EMA are building a foundation for understanding, trust, and  data-driven decisions in the area of inspections.
EMA and Australia’s Therapeutic Goods Administration: In 2009, FDA  joined the EMA and Australia’s Therapeutic Goods Administration to  conduct a pilot program—the Active Pharmaceutical Ingredient  Inspection Pilot—to demonstrate the potential for leveraging their  inspection resources. Before the pilot, these agencies had been  conducting separate inspections at the same overseas manufacturing  sites—often within just months of one another—to assure that the  safety and quality of the drugs were not jeopardized by poor  manufacturing practices. Under the pilot, the three agencies planned  and conducted joint inspections at participating foreign facilities and  shared information from inspections they had conducted over the past  2 to 3 years. These exchanges have allowed FDA to redeploy  inspection resources and alerted FDA to sites requiring heightened  scrutiny. Since then, FDA has engaged in similar projects with  additional counterparts.
Health Canada: FDA also works with Canada on Third-Party  Inspection/Audits. To enable closer regulatory cooperation, FDA and  Health Canada (HC) initiated the Pilot Multi-purpose Audit Program in  2006. The pilot explored the potential benefits to medical device  manufacturers and the agencies of using a single third party for  inspections audits to simultaneously meet FDA and HC regulatory  requirements for systems quality. It was anticipated that a  multipurpose audit could reduce the overall time spent on site by an  official agency audit/inspection team, thus reducing the regulatory  burden for industry. FDA and HC conducted 11 joint audit/inspections  under the pilot; 10 of these were assessed for program benefits. The  results showed that the joint approach reduced the time-in-facility  spent at participating manufacturers by about one-third, on average,  compared with the estimated time required for separate FDA and HC  audits/inspections. In addition, FDA and HC gained a better  understanding of their auditing/inspection approaches, providing a  foundation for leveraging inspection resources in the future.
New Zealand’s Ministry for Primary Industries: In December 2012,  FDA signed an international arrangement with New Zealand’s Ministry  for Primary Industries recognizing each other’s food safety systems as  providing comparable degrees of food safety assurance. This  arrangement was reached after a significant amount of time was  spent by both parties working on regulatory systems recognition  assessments. Systems recognition involves reviewing a foreign  country’s food safety regulatory system to determine if it provides a  similar set of protections to that of FDA and that the food safety  authority provides similar oversight and monitoring activities for food  produced under its jurisdiction. Outcomes of these reviews may be  used by FDA to make risk-based decisions regarding foreign  inspections, admitting product into the U.S., and follow-up actions  when food safety incidents occur .
Outcomes: Coordinated inspections allow FDA to leverage resources with  their foreign counterparts to fulfill their regulatory responsibilities.
section_title: Joint Animal Health Site Visits to Third Countries
paragraphs: Agency: USDA’s Animal and Plant Health Inspection Service (APHIS)
Description: As part of the United States-Canada Beyond the Border  Initiative, APHIS and Canada conducted a joint site visit in Colombia for a  foot and mouth disease evaluation and produced a joint report as part of  the evaluation of Colombia’s request to export fresh beef in October  2011. The United States and Canada are developing procedures for  conducting future joint site visits and the exchange of information related  to animal health evaluations. APHIS and Canada will also be identifying  other opportunities to share evaluation results.
Outcomes: According to APHIS officials, outcomes could involve the  United States and Canada developing risk evaluations that are based in  part on a joint site visit.
section_title: Voluntary Programs
paragraphs: Agencies cooperate with foreign counterparts on voluntary programs that  are not part of agencies’ regulations.
subsections: section_title: Efficient Electrical End- use Equipment Implementing Agreement, Solid State Lighting Annex
paragraphs: Agency: Department of Energy (DOE)
Description: DOE’s international coordination on solid state lighting is  done in large part through the International Energy Agency (IEA) Efficient  Electrical End-Use Equipment (4E) Implementing Agreement, which was  launched in 2008 and undertakes a range of analytical and information  gathering and dissemination activities related to government regulation  and labeling of appliances and equipment. The IEA was established  under the Agreement on International Energy Program. Thirteen countries  from the Asia-Pacific, Europe, North America, and Africa have joined  together under the forum of 4E to share information and transfer  experience to support good policy development in the field of energy  efficient appliances and equipment. 4E also initiates projects designed to  meet the policy needs of participants, enabling better informed policy  making.
Officials said they worked with the 4E Annex on Solid State Lighting for  several years on performance characteristics and testing procedures  during which time they developed a network of laboratories that would  perform independent testing that could be voluntarily adopted by foreign  governments. Solid state (or LED) lighting is a new technology that has  cost and performance characteristics that are developing rapidly. The  goal of the annex is to develop simple tools to help government and  consumers worldwide identify which solid state lighting products have the  necessary efficiencies and quality levels to reduce the amount of energy  currently consumed by artificial lighting. DOE is working with other  countries to identify efficiency and performance criteria and metrics, test  methods, and qualified testing laboratories that might be used in product  labeling or standards activities related to these products.
Outcomes: According to DOE officials, this coordination is important  because the adoption of performance standards and test procedures will  help determine the products that can be marketed and sold around the  world. They said without a common agreement on key characteristics for  this new technology, it would be difficult for products to enter the world  market. Standard labeling helps customers understand the product they  are buying and how its efficiency compares with other products. The  results of cooperation on solid state lighting will not necessarily be  reflected in DOE’s regulations. DOE does not regulate this product at this  time, although it has proposed a test procedure that might be used to  support the Energy Star program or other initiatives.
section_title: Appendix III: Comments from the Department of Energy
section_title: Appendix IV: Comments from the Consumer Product Safety Commission
section_title: Appendix V: GAO Contact and Staff Acknowledgment
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Tim Bober (Assistant Director),  Claude Adrien, Melissa Emrey-Arras, Lynn Cothern, Kim Frankena,  Joseph Fread, Debra Johnson, Barbara Lancaster, Andrea Levine, Grace  Lui, Susan Offutt, and Cynthia Saunders made key contributions to this  report.