International Regulatory Cooperation, 20 Years Later:
Updating ACUS Recommendation 91-1
Michael T. McCarthy*

Summary
In 1991, the Administrative Conference adopted Recommendation 91-1, Federal Agency
Cooperation with Foreign Government Regulators, which set out principles for how U.S. regulators
should engage with their foreign counterparts. As trade in goods, services, and information has
expanded in the past decades, the need for U.S. regulatory agencies to work together with foreign
counterparts has grown. In April 2011, the Administrative Conference and the U.S. Chamber of
Commerce co-sponsored a discussion of global regulatory cooperation, its challenges, and potential
solutions. Following up on this meeting, ACUS commissioned this study to review international
regulatory cooperation in federal agencies and consider updates to Recommendation 91-1.
This study reviews how U.S. regulators interact with their foreign counterparts to better
accomplish their domestic regulatory missions and eliminate unnecessary non-tariff barriers to trade.
The study examines developments in global trade; U.S. participation in international regulatory
partnerships; how global regulatory cooperation is pursued by the Executive Office of the President and
several regulatory agencies; and the perspectives of business, regulated entities, and other
stakeholders.
Based on interviews with government and non-government officials and review of studies and
documents, this report identifies key issues that hinder regulatory cooperation, and the legal and
practical obstacles to resolving these difficulties. These include lack of legal authority to account for
international trade implications of regulatory decisions; the challenge of ensuring accountability when
relying on foreign regulators; hesitation of agency leaders to pursue international cooperation due to
resource constraints, high risks, and uncertain rewards; potential conflicts between regulatory goals and
international cooperation; and coordination issues within the U.S. government.
The study analyzes Recommendation 91-1 and identifies portions that have been implemented
or have become obsolete and other portions that might be restated or expanded. The study proposes a
new recommendation for consideration by the Administrative Conference on the following topics:

*

Executive Director, Administrative Conference of the United States. The author prepared this report in his
capacity as a Conference staff member, but the views expressed are those of the author and do not necessarily
reflect those of the members of the Conference or its committees. Thank you to Roland Frye, Andrea Green,
Porscha Winston, Reeve Bull, Jonathan Siegel, and Paul Verkuil, who provided research and comments for this
report.

DRAFT 10-19-2011

1

International Regulatory Cooperation
Promotion of U.S. regulatory principles to foreign counterparts
Review of legal authority for international cooperation
Mutual reliance between U.S. agencies and foreign regulators, as appropriate, to reduce costs
and duplication while still achieving U.S. regulatory goals
Exchanges of information, training, and employees between U.S. and foreign regulators
Transparency and public input in U.S. engagements with foreign regulators
Coordination and leadership on international cooperation within the U.S. government
I.

Introduction

“If American administrative agencies could ever afford to engage in regulatory activities without
regard to the policies and practices of administrative agencies abroad, the character and pace of world
developments suggest that that era has come to a close.” This was the introduction to a
recommendation of the Administrative Conference of the United States titled “Federal Agency
Cooperation with Foreign Government Regulators.” What is notable is that this recommendation was
adopted more than 20 years ago, in June 1991. While many of the issues identified in this
recommendation remain relevant today, the pace of globalization in the past two decades has created
new challenges and dynamics since then. A review of the background materials on the 1991
recommendation shows concern about how United States regulators engage with their counterparts in
the Soviet Union and a partnership among European nations that was just beginning to develop strong
centralized institutions, and contain little mention of U.S. trade or other engagement in Asia. Today’s
dynamics are quite different. Not only are there much more robust institutions, such as the European
Commission and World Trade Organization, but the volume of trade in goods, services, and information
across borders has increased dramatically.1
This report prepared for the Administrative Conference’s consideration reviews international
regulatory cooperation at U.S. government agencies today, assessing how the 1991 recommendation
has been implemented (or not), new challenges that have emerged in the past 20 years, and how the
1991 recommendation might be updated to guide agencies in improving international coordination
today, to benefit U.S. regulatory goals and U.S. competitiveness. In April 2011, the Conference joined
with the U.S. Chamber of Commerce to co-host a discussion of global regulatory cooperation, its
challenges, and potential solutions. The panel discussions featured Presidential appointees from the
current and prior Administrations, international affairs officials from regulatory agencies, and

1

Between 1995 and 2010, international trade in merchandise has increased from $1.324 billion to $3.021 billion,
and international trade in services has risen from $355 billion to $884 billion. Compare U.S. Int’l Trade Comm’n,
The Year in Trade: Operation of the Trade Agreements During 1995 (Aug. 1996) at 8, 10 with U.S. Int’l Trade
Comm’n, The Year in Trade 2010: Operation of the Trade Agreements Program (July 2011) at pp. 1-8, 1-9, 1-12.
These increases, though significant, are dwarfed by the increase in data transfer via the internet during the same
period.

DRAFT 10-19-2011

2

International Regulatory Cooperation
representatives of business interests.2 This report draws on that forum and additional interviews of
officials from U.S. government agencies, representatives of U.S. trade and industry groups, and former
senior government officials. ACUS staff also reviewed U.S. government reports from the U.S. Trade
Representative and Office of Information and Regulatory Affairs, requests for comment on international
issues published in the Federal Register and the comments that were submitted, and academic studies.
Based on this research, the report finds that international regulatory cooperation is desirable for
two reasons. First, it helps U.S. regulatory agencies accomplish their statutory regulatory missions
domestically. Indeed, in some areas like regulating the safety of food and drugs, a large proportion of
which are imported to the U.S., awareness and participation in foreign regulatory processes may be
essential to ensure the safety of products reaching U.S. markets. Second, international regulatory
cooperation can remove non-tariff barriers to trade and exports, promoting global commerce and U.S.
competitiveness. Moreover, these benefits of international regulatory cooperation are not inconsistent;
they often can be pursued in unison.
Although desirable, global regulatory cooperation can be difficult to accomplish. This report
identifies key barriers, both legal and practical, to international regulatory cooperation for U.S.
government agencies. Some agencies claim that they lack statutory authority to account for
international effects when making regulatory decisions. Several agency officials, as well as high-level
leaders, indicated that international regulatory cooperation was a low priority for agency leaders, as it is
an issue with little visibility when accomplished successfully. Agencies indicated that legal restrictions
on information sharing can hinder international cooperation. Finally, coordination among agencies
within the U.S. government is a challenge, particularly for independent regulatory agencies, so that
agencies focused on trade and competitiveness are not always aware of the activities of other federal
regulators.
Despite these challenges, many agencies are effectively engaging in international cooperation,
and the report reviews these success stories. Notably, there is evidence that better international
cooperation can help agencies better accomplish their regulatory missions with fewer resources by
dividing work with foreign counterparts and, where appropriate, mutually recognizing each others’
inspections and other tests. These approaches, which show potential for cost savings without
diminishing regulatory effectiveness, might be expanded for further cost-saving effects.

2

The participants were Paul R. Verkuil, Chairman, Administrative Conference of the United States; C. Boyden Gray,
Founding Partner, Gray & Schmitz, Former Ambassador to the EU, Former White House Counsel; Michael
Fitzpatrick, Associate Administrator, OIRA, OMB; Dan Price, Senior Partner, Sidley Austin, Former Assistant to the
President and Deputy National Security Advisor for International Economic Affairs; Mindel De La Torre, Chief,
International Bureau, FCC; Steve Wood, Assistant Chief Counsel for Vehicle Rulemaking & Harmonization, NHTSA;
Elizabeth Jacobs, Deputy Director, Office of International Affairs, SEC; Jeff Weiss, Senior Director, Technical Barriers
to Trade, USTR; Ralph Carter, Managing Director, Legal, Trade & International Affairs, FedEx; and Michael Walls,
Vice President Regulatory & Technical Affairs, American Chemistry Council.

DRAFT 10-19-2011

3

International Regulatory Cooperation
Many of the issues identified were addressed in the 1991 recommendation. The report assesses
that 1991 recommendation and proposes a new recommendation to be considered by the
Administrative Conference. This new recommendation restates the parts of the 1991 recommendation
that remain valid and relevant, expands on some elements of the 1991 recommendation, and adds new
elements based on the current issues identified in this report.
II.

Background

A. The 1991 Recommendation
In 1991, ACUS studied FAA cooperation with its counterpart agencies abroad related to aircraft
certification, and the issues that such cooperation entailed. Based on that case study, ACUS developed a
recommendation for all U.S. regulatory agencies on working with their international counterparts. ACUS
recommendation 91-1 included the following:
Each agency should be familiar with its foreign counterparts and weigh whether regulatory
cooperation is appropriate, considering whether the agencies share common objectives, the
importance of coordination in a given field, and whether the agencies can rely on common
technical resources, tests, and inspections.
When an agency concludes that it has a pronounced interest in cooperation with foreign
regulatory bodies, it should consider adopting various modes of cooperation with those
agencies, including establishment of common regulatory agendas; systematic exchange of
information; alignment of rules; joint research and development; mutual recognition of
certifications; and regularly scheduled meetings.
Agencies must proceed in coordination with other U.S. interests and should consider that
foreign regulators may have their own agendas, particularly when foreign industries are
government-controlled. To this end, agencies should form interagency advisory groups with
representatives from State, Commerce, Defense, and USTR.
Agencies should provide notice to the public and regulated industries of cooperation with
foreign regulators and an opportunity to participate in the proceedings. Agencies should be
transparent about the effect of foreign negotiations in their own rulemakings.
Coordination efforts should be pursued within the overall framework of the agency's statutory
mandate and with due regard for the interests that Congress intended the agency to promote.
Accordingly, agencies should ensure that any accord informally reached through international
regulatory cooperation is genuinely subject to reexamination and reconsideration in the course
of the rulemaking process.
When the Administrative Conference was revived in 2010, one of the key considerations in
developing the Conference’s agenda was thinking about how the world had changed during the 15-year
dormancy of the Conference, from 1995-2010. The widespread adoption of the Internet and its
transformation of global information sharing and transparency have transformed global economies and
cultures. Similarly, global political realignments, such as increasing unification of Europe, terrorism and
DRAFT 10-19-2011

4

International Regulatory Cooperation
armed conflicts, and the rapid development of economies in Asia, Latin America, and the Middle East,
have influenced economic and political policy in the United States. Given these developments, when
the Conference considered which previous recommendations to reexamine, the 1991 recommendation
on global regulatory cooperation emerged as a prime candidate.
B. Developments in Global Trade
In the 20 years since the Administrative Conference adopted its recommendation on global
regulatory cooperation, the United States has entered into a number of trade agreements intended to
remove barriers to trade, such as tariffs, subsidies, and inconsistent technical standards or regulations.
The Uruguay Round of the General Agreement of Trade and Tariffs was conducted from 1986 to 1994
and resulted in the creation of the World Trade Organization.3 This round also addressed the concern
that, as free-trade agreements reduced measures such as tariffs, non-tariff barriers such as mandatory
product standards and conformity assessment procedures could also disrupt trade.4 The Agreement on
Technical Barriers to Trade (TBT Agreement), an outcome of the Uruguay Round and an elaboration of
the Tokyo Round Standards Code, sets out procedures that countries must follow in developing,
adopting and implementing mandatory product standards and conformity assessment procedures to
protect the countries’ legitimate regulatory interests such as protecting health, safety, and the
environment, while avoiding the creation of unnecessary obstacles to trade in goods.5
The TBT Agreement acts as an analogue to the Administrative Procedure Act in the United
States by setting out principles and procedures for countries to develop their regulatory standards to
comply with WTO rules. Among the key obligations of the TBT Agreement are non-discrimination;
ensuring that mandatory product standards are no more trade restrictive than necessary to fulfill a
legitimate objective; enhanced transparency in the development of mandatory product standards and
conformity assessment procedures; the use of relevant international standards as a basis for mandatory
product standards and conformity assessment procedures (unless ineffective or inappropriate to fulfill a
legitimate objective); and, where appropriate, basing product requirements on performance or
outcomes instead of specific designs or descriptions. The Agreement also strongly encourages the
acceptance of foreign regulations as equivalents, mutual recognition of tests and certifications,
permitting foreign conformity assessment bodies to participate in domestic conformity assessment

3

Marrakesh Agreement Establishing the World Trade Organization, 1867 U.N.T.S. 31874 (1994).

4

See David Lifshiz, Updating American Administrative Law; WTO, International Standards, Domestic
Implementation and Public Participation, 24 WIS. INT’L L.J. 961, 961 (2007).
5

Agreement on Technical Barriers to Trade, Annex to the Marrakesh Agreement Establishing the World Trade
Organization, 1868 U.N.T.S. 120 (1994). Another agreement, the Sanitary and Phytosanitary Measures Agreement
(SPS Agreement), specifically addressed the alignment of international and domestic standards in food and
agricultural products. Agreement on the Application of Sanitary and Phytosanitary Measures, Annex to the
Marrakesh Agreement Establishing the World Trade Organization, 1867 U.N.T.S. 493 (1994).

DRAFT 10-19-2011

5

International Regulatory Cooperation
procedures on no less favorable terms as those accorded to domestic conformity assessment bodies,
and use of international systems of conformity assessment. 6
Because access to information is important in coordinating regulation, the TBT agreement
requires that each member publish certain proposed measures at an early stage so that other members
may have an opportunity to comment and have comments considered, and to promptly publish final
measures.7 Each country is required to establish a National Inquiry Point to facilitate access to this
information. The National Institute of Science and Technology (NIST) within the Department of
Commerce plays this role for the United States. NIST operates a database, Notify U.S., containing
proposed mandatory product standards and conformity assessment procedures from other countries
that may significantly affect trade.8 The Notify U.S. database compiles summary information on foreign
measures, allows users to request complete texts, guides U.S. entities in preparing comments, and
forwards these comments to foreign regulators. NIST is also responsible for notifying foreign countries
of proposed U.S. federal and state measures that may have significant trade effects.9
As one route to greater alignment, the TBT agreement encourages the adoption of voluntary
international standards as national technical regulations.10 The agreement requires Members to use
relevant international standards as a basis for their mandatory product standards and conformity
assessment procedures, provided that such standards are not ineffective or inappropriate to achieve the
legitimate policy objective pursued.11 Such measures can be afforded a rebuttable presumption that
they are not unnecessary technical barriers to trade.

6

Office of the United States Trade Representative, 2011 Report on Technical Barriers to Trade 9 (2011), available
at
http://www.ustr.gov/sites/default/files/TBT%20Report%20Mar%2025%20Master%20Draft%20Final%20pdf%20%20Adobe%20Acrobat%20Pro.pdf.
7

Id.

8

See Notify U.S., https://tsapps.nist.gov/notifyus/data/index/index.cfm.

9

U.S. Dep’t of Commerce, U.S. TBT Inquiry Point: What We Do, http://gsi.nist.gov/global/index.cfm/L1-4/L2-12/A219
10

Office of the United States Trade Representative, 2011 Report on Technical Barriers to Trade 21 (2011), available

at
http://www.ustr.gov/sites/default/files/TBT%20Report%20Mar%2025%20Master%20Draft%20Final%20pdf%20%20Adobe%20Acrobat%20Pro.pdf
11

Office of the United States Trade Representative, 2011 Report on Technical Barriers to Trade 21 (2011), available
at
http://www.ustr.gov/sites/default/files/TBT%20Report%20Mar%2025%20Master%20Draft%20Final%20pdf%20%20Adobe%20Acrobat%20Pro.pdf

DRAFT 10-19-2011

6

International Regulatory Cooperation
The United States has undertaken other efforts to align its regulations with those of other
nations, adopting a law encouraging the use of voluntary consensus standards instead of governmentunique standards. The National Technology Transfer and Advancement Act of 1995 (NTTAA)12 directs
U.S. regulatory agencies to adopt voluntary consensus standards, instead of creating standards unique
to the government, whenever possible. OMB Circular A-119, Federal Participation in the Development
and Use of Voluntary Consensus Standards and in Conformity Assessment Activities, provides guidance
to agencies on implementing the NTTAA. “This Circular instructs agencies to use voluntary consensus
standards in lieu of government-unique standards except where inconsistent with law or otherwise
impractical. It also provides guidance for agencies participating in voluntary consensus standards bodies
and describes procedures for satisfying the reporting requirements in the NTTAA. The aim of the Circular
is to reduce to a minimum the reliance by agencies on government-unique standards.”13
In addition to participation in the WTO, including the TBT agreement, the United States has also
entered into free trade agreements with a number of countries that include obligations for regulatory
cooperation beyond the framework of the TBT Agreement.14 For example, these free trade agreements
require trade partners to recognize U.S. conformity assessment bodies, including testing and
certification bodies, on no less favorable terms than they accord to their own testing and certification
bodies, and vice versa.15
To facilitate greater levels of international regulatory cooperation, the United States created
high-level, bilateral regulatory cooperation forums with the European Union, Mexico, and Canada.16 In
addition, the United States has offered proposals in various fora, such as the WTO’s Doha Round, AsiaPacific Economic Cooperation, and the Trans-Pacific Partnership negotiations to promote transparency
and the use of good regulatory practices, as well as to better align regulatory approaches (including
labeling and packaging requirements) in specific product areas such as textiles, apparel, footwear, and
travel goods; electronic goods; goods with cryptographic capabilities; automotive goods; wine and
distilled spirits; medical devices, pharmaceuticals, and cosmetics.17

12

Pub. L. No. 104-113, 110 Stat. 775 (1996).

13

EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, at 4, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.
14

Id. at 14 n.10. The U.S. has entered into Free Trade Agreements with regulatory cooperation provisions with
Australia, Bahrain, Central America and the Dominican Republic, Chile, Morocco, Oman, and Peru.
15

Id. at 15.

16

Id. at 40.

17

Id. at 44.

DRAFT 10-19-2011

7

International Regulatory Cooperation

III.

The Rationale for Increased International Regulatory Cooperation

Both the United States government and business groups such as the U.S. Chamber of Commerce
agree that, even as international regulatory cooperation has improved over the past 20 years, there are
still shortcomings in cooperation that hinder regulatory effectiveness and commerce. While the
international efforts of U.S. agencies have greatly expanded, the need for international coordination has
also greatly expanded due to increased trade in goods, services, and information.
Incompatible regulatory requirements in different countries persist. Sometimes regulations are
different for non-substantive reasons – regulators share common goals and methods of regulation, but
for historical or other reasons, regulations remain inconsistent. Sometimes regulations differ because
regulators in different countries do not agree on important substantive issues, such as how to weigh
scientific evidence or balance competing priorities. When differences are substantive, the differences
can sometimes be ascribed to countries asserting legitimate national goals such as protecting health,
safety or the environment at the levels that they consider appropriate. Other substantive differences,
however, disrupt trade and serve no legitimate objective, or otherwise operate as de facto protectionist
measures. Moreover, even when regulations themselves are aligned, different national requirements
for conformity assessment, such as testing, certification, inspection, or accreditation, frequently impose
their own costs and delays.
Past and current informal regulatory barriers include (i) uncertainty about foreign regulations,
which could force U.S. manufacturers to “make practical design, production, and commercial decisions
without adequate information”;18 (ii) uncertainty caused by excessive time to process appeals from
regulatory decisions;19 (iii) ineffective, inconsistent or overly lengthy enforcement efforts;20 and (iv)
reimbursable advances (loans) and direct subsidies for companies; 21 and (v) lack of regulatory
transparency of foreign markets.
Because of the global nature of the economy, the domestic regulatory mission of U.S. agencies is
affected by what happens overseas. For example, imports of food and pharmaceutical products to the
U.S. have greatly increased over the past 20 years, so that the FDA’s mission of ensuring food, drug, and
device safety in the United States is necessarily intertwined with how these products are regulated in
their country of origin. The Consumer Products Safety Commission (CPSC) faces a similar challenge.
18

Office of the United States Trade Representative, “European Union” at 180, available at
http://www/ustr.gov/sites/default/files/uploads/reports/2009/NTE/asset_upload_file348_15473.pdf.
19

Id. at 193.

20

Id. at 191-92.

21

Id. at 206-08.

DRAFT 10-19-2011

8

International Regulatory Cooperation
Pollutants do not respect political boundaries and carbon emissions have global effects, so that the
Environmental Protection Agency’s missions of ensuring clean air and clean water in the United States
are reliant on environmental regulations in other countries. Financial institutions in the United States
participate in the global banking system and are exposed to risks in economies all over the world, which
requires financial regulators to coordinate globally in their missions of ensuring safety and soundness of
United States institutions.22 And trade in data flows across national boundaries, requiring the Federal
Trade Commission to cooperate with other global regulators in policing Internet fraud. A CPSC report
outlined reasons that disparate safety standards could have negative consequences, including:
A potential for production errors due to periodic changes of components or procedures to meet
different regulations. Such mistakes may result in an otherwise safe product meeting the
“wrong regulation” or, worse, the accidental absence of, or even the intentional deletion of, a
required safety element.
Higher costs for consumers where production must be modified to meet different safety
requirements.
Confusion and concern by consumers who do not understand why a foreign safety requirement
is not applied to the same products sold in their own market.
Purchase abroad of an otherwise identical product that does not meet safety requirements in
the consumer’s own market.
Unavailability of a useful and safe product in a given market because the manufacturer finds it
cost-prohibitive to meet different safety standards in multiple markets.23
In addition to the impact on regulatory goals such as health, safety, and environmental and
consumer protection in the United States, inconsistent regulatory regimes can act as barriers to trade.
For example, different food labeling requirements between the United States and Europe require
producers who distribute food in both markets to produce the same goods in different packaging,
depending on the market, which hinders economies of scale and adds cost and delay. Another example
is that the United States and Europe have different approaches to regulating the length of tractortrailers. While the U.S. regulations address the length of the trailers, the European regulations address

22

Coordination with foreign financial regulators often occurs through a variety of means, which affords flexibility in
addressing cross-border issues. Examples include membership in international standard setting bodies, such as the
International Organization of Securities Commissions (IOSCO); bilateral and multilateral engagements; and the
Financial Stability Board.
23

CPSC Office of International Programs and Intergovernmental Affairs, Toy Safety Regulatory and Standards
Coordination and Alignment: A Roadmap, April 25, 2011, at p. 5.

DRAFT 10-19-2011

9

International Regulatory Cooperation
the combined length of the tractor and trailer.24 The result of this disparity is that European trucks
typically place the driver’s cab over the engine compartment so that the truck is shorter, while American
trucks place the driver’s cab behind the engine compartment, resulting in a longer truck with a more
aerodynamic profile. This disparity has both regulatory and trade effects: the American design has
better fuel economy, and American manufacturers cannot export their trucks which comply with U.S.
requirements into European markets without significant redesign.
Disparities between regulatory regimes hinder the regulatory effectiveness of the U.S.
government and have costs to the U.S. economy. Regulatory differences between the U.S. and foreign
governments can require U.S. agencies to “devote scarce enforcement resources to policing highvolume but low-risk transatlantic trade, reducing their ability to adequately enforce regulatory
requirements on imports from less well-regulated economies.”25 A 2009 European Commission study
found that the elimination of 50 percent of non-tariff barriers between the U.S. and the EU would result
in a $150 billion increase in gross domestic product (GDP), yielding 0.7-percent and 0.3-percent in
permanent increases to the EU’s and the U.S.’s GDP, respectively.26 In addition to the financial savings,
an increase in GDP could also result in lives saved27 and would yield other non-market benefits to public
health, safety and the environment.28
A challenge for U.S. regulators is the increased ability of other countries and economic
partnerships to influence regulations globally. While the United States was by far the global economic
leader after the fall of the Soviet Union, the past 20 years has seen the rise of the European Union as a
common market rivaling the United States. Several government and private sector officials interviewed
for this project indicated that the European Union is actively marketing its approach to standards,
regulation, and conformity assessment to developing countries. For example, an FCC official discussed
how even though the U.S. was first in setting a digital television standard, the European Union did a
24

Comment of Navistar, Inc. in response to Request for Public Comments Concerning Regulatory Cooperation
Between the United States and the European Union That Would Help Eliminate or Reduce Unnecessary
Divergences in Regulation and in Standards Used in Regulation That Impede U.S. Exports, 76 Fed. Reg. 24860 (May
3, 2011), available at http://www.regulations.gov, Docket No. ITA-2011-0006-0046.
25

John F. Morrall III, Determining Compatible Regulatory Regimes between the U.S. and the EU (U.S. Chamber of
Commerce White Paper) (2011) at p. 23, available at
http://www.uschamber.com/sites/default/files/grc/Determining%20Compatible%20Regulatory%20Regimes%20%20Final_0.pdf
26

Judith M. Dean, et al., Estimating the Price Effects of Non-Tariff Barriers (U.S. International Trade Commission
Working Paper) (2009) at p. 2, available at
http://www.usitc.gov/publications/332/working_papers/EC200606Ar.pdf
27

Morrall, supra note 25, at 2 n.6 (a $150 billion increase in GDP would result in 6,000 lives saved).

28

Id. at 32.

DRAFT 10-19-2011

10

International Regulatory Cooperation
better job of selling their standard in other countries. Now most of South America uses either a
European or Japanese standard for digital television, and an opportunity was lost. Another example is
that EU vehicle safety and emissions standards have been or are in the process of being adopted in a
number of markets, including Chile, Columbia, and Taiwan. Although Taiwan has been a major export
market for U.S. truck manufacturers, the adoption of EU standards that diverge from U.S. standards will
add costs and hinder U.S. exports to that market.29 As their economies grow, member states of the EU
and other countries will enjoy more influence in multilateral forums. When new markets import a
regulatory structure, it is to the advantage of businesses already subject to that regulation, as they are
less likely to incur new compliance costs in exporting to the new market.
IV.

Perspectives of U.S. Government Agencies and Regulated Industries

To assess how the 1991 recommendation had been implemented and identify best practices
and potential improvements to international regulatory cooperation, I conducted interviews at U.S.
government agencies and with representatives of several industry groups. I also reviewed websites and
other documents, such as Federal Register notices, for these agencies and industry groups. Overall,
every agency reviewed engages with its foreign counterparts and international organizations to
coordinate regulatory and enforcement activity. This engagement can take the form of formal and
informal information sharing; mutual recognition of standards, certification, and testing; or consultation
in advance of rulemaking to align regulations. Despite the extensive nature of international
cooperation, the agencies also believed that more coordination is necessary, and they identified both
legal and practical obstacles to regulatory convergence.
A. Executive Office of the President
Improving international regulatory cooperation has been a focus of the Executive Office of the
President across Administrations, with substantial participation from several components – the Office of
Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB), the Office of
the U.S. Trade Representative (USTR), the National Security Council, and the National Economic Council.
Much of the work in this field has been establishment of high-level regulatory cooperation partnerships
with the European Union and, more recently, Canada and Mexico. Leadership and responsibility rests in
the Executive Office of the President, cutting across its components.
The most robust high-level regulatory cooperation partnership has been with the European
Union. In 2002, the United States and European Union agreed on Guidelines for Regulatory Cooperation
and Transparency, negotiated as part of the Transatlantic Economic Partnership launched at the London

29

Id.

DRAFT 10-19-2011

11

International Regulatory Cooperation
Summit of May 1998.30 The objectives of the agreement were to “improve cooperation between
regulators and to promote transparency to the public in establishing and amending regulations.”31
In implementing these guidelines, the U.S. and EU have issued regularly updated “roadmaps”
that outline specific sectors for cooperation, such as pharmaceuticals, auto safety, information and
communications technology standards, cosmetics, consumer product safety, nutritional labeling, energy

30

See TEP Guidelines on Regulatory Cooperation and Transparency Implementation Roadmap (2002), available at
http://www.ustraderep.gov/World_Regions/Europe_Middle_East/Europe/US_EU_Regulatory_Cooperation/TEP_G
uidelines_on_Regulatory_Cooperation_Transparency_Implementation_Roadmap.html.
31

Id. Specifically, the guidelines proposed to:

(a) Improve the planning and development of regulatory proposals; leverage resources for regulations
development; improve the quality and level of technical regulations; pursue, as appropriate, harmonized,
equivalent or compatible solutions; and take appropriate steps to minimize or, where appropriate, eliminate
unnecessary divergence in regulations through a more systematic dialogue between regulators, involving
increased cooperation at all phases of the regulations development process;
(b) Obtain an increased predictability in the development and establishment of regulations by identifying and
exchanging regulatory objectives, instruments and timetables;
(c) Grant the opportunity for regulators of each side to provide the other with meaningful input on regulatory
matters, and the possibility to obtain reasonable consideration of such input;
(d) Promote public participation through disclosure of and access to supporting documents, particularly the
timely release of the supporting rationales, analyses and data for regulatory proposals, and a timely opportunity
for all interested parties, both domestic and non-domestic, to provide meaningful comments concerning
regulatory proposals, including supporting materials;
(e) Obtain from each other and interested parties the benefit of the expertise, perspectives and ideas for
alternative approaches, and of a fuller identification of unintended effects and practical problems associated with
regulatory proposals, thereby promoting the adoption of technical regulations that are more performanceoriented and cost-effective and have fewer adverse effects;
(f) Provide public explanations for technical regulations, including the technical information and major
regulatory alternatives considered, the analyses performed, the potential impacts on consumers, regulated
parties, and others identified, the criteria applied to guide decision-making, and the consideration given to the
public comments; and
(g) Create greater public understanding of the purpose and effect of regulatory proposals, greater public
confidence in the fairness and openness of the regulations development process, and greater public acceptance of
the technical regulations adopted, thereby enhancing the development and implementation of regulations, and
contributing to a stable and sustainable foundation for long-term economic and social growth and development.

DRAFT 10-19-2011

12

International Regulatory Cooperation
efficiency, and nanotechnology.32 To provide additional formal mechanisms for regulatory cooperation,
in 2005 the U.S. and EU agreed to a regular meeting schedule known as the EU-US High-Level Regulatory
Cooperation Forum, which brings together senior officials semiannually in Brussels or Washington to
exchange views on cooperative best practices (including how to cooperate in specific sectors) and
regulatory workplans.33 These meetings have identified issues that hinder effective regulatory
cooperation, including:
information exchange suffers from a lack of legal authority that allows sharing and
appropriate protections for confidential business information;34

32

See 2004 Roadmap for EU-U.S. Regulatory Cooperation and Transparency (2004), available at
http://www.ustraderep.gov/World_Regions/Europe_Middle_East/Europe/US_EU_Regulatory_Cooperation/2004_
Roadmap_for_EU-US_Regulatory_Cooperation_Transparency.html; 2005 Roadmap for EU-U.S. Regulatory
Cooperation and Transparency (2005), available at
http://www.ustraderep.gov/World_Regions/Europe_Middle_East/Europe/US_EU_Regulatory_Cooperation/2005_
Roadmap_for_EU-US_Regulatory_Cooperation_Transparency.html; Joint Report on the Roadmap for EU-US
Regulatory Cooperation (2006), available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/joint_report_on_the_roadmap_for_euus_regulatory_cooperation_june_2006.pdf; Joint Report of the Roadmap for EU-U.S. Regulatory Cooperation
(2007), available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/joint_report_on_the_roadmap_for_useu_regulatory_cooperation_april_2007.pdf; EU-US High-Level Regulatory Cooperation Forum, Report on the Sixth
Meeting of the EC-U.S. High-Level Regulatory Cooperation Forum (2009), available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_july_2009.pdf.
33

See EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, April 25,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_april_2008.pdf; EU-US HighLevel Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15, 2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf; EU-US
High-Level Regulatory Cooperation Forum, Report on the Sixth Meeting of the EC-U.S. High-Level Regulatory
Cooperation Forum, July 24, 2009, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_july_2009.pdf; European
th
Commission-United States High-Level Regulatory Cooperation Forum, Report of the 8 Meeting, June 29-30, 2010,
available at http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_june_2010.pdf;
th
European Commission-United States High-Level Regulatory Cooperation Forum, Report of the 9 Meeting, Dec. 16,
2010, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_december_2010.pdf.
34

See EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, April 25,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_april_2008.pdf; see also
Office of the United States Trade Representative, “European Union” at 179 (the U.S. chemical industry is

DRAFT 10-19-2011

13

International Regulatory Cooperation
differences between how the U.S. and EU measure and analyze risk;35
differences in the standards system between the U.S. and EU, including divergent views in
what constitutes an international standard.36
In June 2011, the Forum issued a Common Understanding on Regulatory Principles and Best
Practices which reaffirmed the commitment of the U.S. and EU to the following regulatory principles:
(1) evidence-based policy-making for all regulatory measures likely to have significant impacts, with
consideration of all relevant benefits and costs;
(2) transparency and openness, allowing participation by citizens and stakeholders;
(3) analysis of relevant alternatives;
(4) monitoring and evaluation of the effectiveness of existing regulatory measures; and
(5) use of approaches that minimize burden and aim for simplicity.37
Following the model of extensive high-level partnership with the European Union on regulatory
issues, the White House has recently entered into similar arrangements with Canada and Mexico. In
February 2011, President Obama and Prime Minister Harper of Canada directed the creation of the
United States-Canada Regulatory Cooperation Council, with the mission of increasing regulatory
transparency and coordination.38 In March 2011, terms of reference were adopted by the United States
and Mexico for the U.S.-Mexico High-Level Regulatory Cooperation Council. While these coordination
mechanisms are in their early stages, it is notable that they adopt the same high-level model as the U.S.concerned that its polymer manufacturers may be forced to disclose confidential business information), available
at http://www/ustr.gov/sites/default/files/uploads/reports/2009/NTE/asset_upload_file348_15473.pdf.
35

See EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.
36

See EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.
37

See United States – European Commission High-Level Regulatory Cooperation Forum, Common Understanding
on Regulatory Principles and Best Practices, June 2011, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/common-understanding-on-regulatory-principlesand-best-practices.pdf.
38

The White House, Joint Statement by President Obama and Prime Minister Harper of Canada on Regulatory
Cooperation, February 4, 2011, available at http://www.whitehouse.gov/the-press-office/2011/02/04/jointstatement-president-obama-and-prime-minister-harper-canada-regul-0.

DRAFT 10-19-2011

14

International Regulatory Cooperation
EU partnership – participation of high level officials who have the authority to reach agreements and the
clout to implement them within their respective governments’ regulatory agencies. Bob Hamilton, a
Senior Associate Secretary for Canada’s Treasury Board who is a leader of the U.S.-Canada Council,
emphasized the importance of attention to the issue of regulatory cooperation at the highest levels of
the national government, and said that he had a specific mandate directly from Prime Minister Harper,
which bolstered his authority and credibility with Canadian regulatory agencies.39
In May 2011, the Office of the United States Trade Representative and the Office of Information
and Regulatory Affairs issued a memorandum to the heads of executive departments and agencies and
independent regulatory agencies titled “Export and Trade Promotion, Public Participation, and
Rulemaking.” This memo recommended steps that agencies can take to reduce unnecessary regulatory
barriers to exports and trade.
The memo stated that cost-benefit analysis required by Executive Orders 13563 and 12866
should consider “productivity, employment, the ability of small and medium-sized enterprises (SMEs) to
participate in the global economy, and competitiveness.”40 The memo also noted provisions of OMB
Circular A-4 that “*t+he role of Federal regulation in facilitating U.S. participation in global markets
should also be considered” and that “*c+oncerns that new U.S. rules could act as non-tariff barriers to
imported goods should be evaluated carefully.”41 In addition, the memo points out that the Trade
Agreements Act prohibits Federal agencies from engaging in “any standards-related activity that creates
unnecessary obstacles to the foreign commerce of the United States.”42 The memo notes that openness
and the opportunity for the public to participate in the regulatory process is required by Executive Order
13563, and providing public access over the Internet to proposed rules, analyses, and supporting
documents pursuant to the Executive Order and the requirements of the Technical Barriers to Trade
Agreement makes them available to both domestic and foreign stakeholders, so that impacts to export
and trade may be considered.43
Finally, the memo encourages international collaboration, to include “information exchanges,
dialogues, or meetings with other governments; information exchanges, dialogues, or meetings with
39

Meeting with Bob Hamilton, Senior Associate Secretary, Treasury Board of Canada, at Embassy of Canada to the
United States, June 9, 2011.
40

Office of the U.S. Trade Representative and Office of Information and Regulatory Affairs, Export and Trade
Promotion, Public Participation, and Rulemaking, M-11-23, May 19, 2011, available at
http://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-23.pdf
41

Id. at 2.

42

Id. at 2-3. See Trade Agreements Act of 1979, Pub. L. No. 96-39, as amended by the Uruguay Round Agreements
Act, Pub. L. No. 103-465 (codified at 19 U.S.C. § 2532).
43

Id. at 3.

DRAFT 10-19-2011

15

International Regulatory Cooperation
interested stakeholders, including SMEs, in other countries; coordination of regulatory activities with
other governments; participation in efforts to share best practices and to harmonize relevant regulatory
approaches, standards, and related procedures, as well as consideration of such efforts in the
development of regulatory measures; and consideration of regulatory schedules that allow for sufficient
time to consider regulatory approaches in other countries, as well as relevant developments in
international, regional, and other fora.”44 The memo argued that “such practices can help reduce
regulatory costs, making it easier to do business, and also promote U.S. exports and trade by removing
unnecessary regulatory divergences, which impose costs on U.S. exporters, especially SMEs.”45 These
practices “could have many domestic benefits, including increasing the safety and quality of other
countries’ exports to the United States and thus helping to protect U.S. consumers.”46
Similarly, in its 2011 Report to Congress on the Costs and Benefits of Regulation, OMB
recommended that “in order to promote trade and exports, and thus to increase job creation, agencies
should promote regulatory cooperation initiatives with key trading partners.”47
There is a consensus among Presidential appointees from the current and prior Administrations
that high-level attention from the White House is necessary to make international cooperation a priority
for the agencies. They emphasized that for agency leaders to take the issue seriously, it must be
something that they know senior officials at the White House are monitoring. A senior official perceives
widespread support for international cooperation in the career ranks in agencies, but it is hard for these
officials to feel empowered to change regulations or pursue alignment unless there is someone at the
policy level pushing change.
(1) Office of Information and Regulatory Affairs (OIRA)
In addition to its participation in the international high-level regulatory cooperation groups,
OIRA manages international regulatory cooperation policy in its oversight role over U.S. regulatory and
information collection activities, especially regulatory review.
In 2008, OIRA provided guidance to U.S. agencies on analyzing the international effects of
regulation, stating that agencies should consider effects on international trade and investment as part of
the Regulatory Impact Analysis required by OMB Circular A-4.48 In preparing their analyses, agencies
44

Id. at 3-4.

45

Id. at 4.

46

Id. at 4.

47

Office of Management and Budget, 2011 Report to Congress on the Benefits and Costs of Federal Regulations
and Unfunded Mandates on State, Local, and Tribal Entities, available at:
http://www.whitehouse.gov/sites/default/files/omb/inforeg/2011_cb/2011_cba_report.pdf
48

Office of Management and Budget, 2008 Report to Congress on the Benefits and Costs of Federal Regulations
and Unfunded Mandates on State, Local, and Tribal Entities, available at:

DRAFT 10-19-2011

16

International Regulatory Cooperation
should consider international trade as a “private market where economic exchange takes place across
national boundaries.”49 Therefore, regulations that hinder international trade have costs that should be
measured against the benefits that the regulations provide, focusing on “benefits and costs that accrue
to citizens and residents of the United States.”50 In measuring costs and benefits related to international
trade effects, agencies should “distinguish a regulation affecting trade which benefits the producers in
their country at the expense of the consumers in their country, from a regulation that retains welfareenhancing trade where possible and only restricts trade, either indirectly or directly, in cases where the
benefits outweigh the costs.”51
OIRA has added a data element on international impacts to http://www.reginfo.gov, the online
system that provides information and status updates on the unified regulatory agenda, regulatory
review process, and information collection review process. Proposed rules submitted to OIRA for review
are categorized by whether they have international impact, and users of the reginfo website can check a
box to search for rules that have international impact, to facilitate transparency and comments from
foreign regulators and stakeholders.
While OIRA plays a major role in international regulatory cooperation and issuing policy
guidance, resource issues at OIRA limit its involvement in international issues at the agency level. OIRA
does not have any full-time staff devoted to international work, and the international portfolio is
handled unofficially by one branch chief, who estimates that he spends about half of his time on
international issues, and by other OIRA staff on an as-needed, collateral duty basis.
OIRA staff emphasized that agencies should involve OIRA, trade officials, and national security
staff early in the process. To this end, OIRA staff noted a State Department regulation “that nobody
knows about,” which requires federal agencies to coordinate with OIRA before entering into an
international agreement with potential regulatory impacts.52

http://www.whitehouse.gov/sites/default/files/omb/assets/information_and_regulatory_affairs/2008_cb_final.pd
f.
49

Id. at 71.

50

Id. at 71 (citing OMB Circular A-4).

51

Id. at 72.

52

“The Secretary of State is responsible, on behalf of the President, for ensuring that all proposed international
agreements of the United States are fully consistent with United States foreign policy objectives. … *N+o agency of
the U.S. Government may conclude an international agreement, whether entered into in the name of the U.S.
Government or in the name of the agency, without prior consultation with the Secretary of State or his designee.”
22 C.F.R. § 181.4(a); “If a proposed agreement embodies a commitment that could reasonably be expected to
require (for its implementation) the issuance of a significant regulatory action (as defined in section 3 of Executive
Order 12866), the agency proposing the arrangement shall state what arrangements have been planned or carried
out concerning timely consultation with the Office of Management and Budget (OMB) for such commitment. The

DRAFT 10-19-2011

17

International Regulatory Cooperation
As befitting their role within OMB, OIRA staff sees potential resource savings through
international regulatory cooperation. Mutual trust between regulators is an opportunity for
worksharing – if agencies don’t have to duplicate tests or science, they can share their workload with
foreign counterparts and shift limited inspection and other resources to areas of greater need.
OIRA staff also expressed the view held by others that high level political leadership, in both the
executive and legislative branches, is needed to spur agencies to make international cooperation a
priority.
(2) U.S. Trade Representative
To promote international regulatory coordination, USTR staff regularly review proposed foreign
regulations that stakeholders bring to their attention to determine if they might have an impact on
trade. If so, USTR staff must engage with the appropriate U.S. regulators and other key agencies
through the Trade Policy Staff Committee to develop a U.S. position that balances the goal of trade
facilitation with regulatory goals.
USTR staff noted that the trade and regulatory authorities are much more closely aligned in the
European Commission than in the U.S., which has an effect on bilateral negotiations on regulatory
issues. The European Commission’s Directorate General - Enterprise, which looks at standards
development through a competitiveness lens as well as a regulatory one, can take the lead in
representing the EU position, while for the U.S., regulatory agencies take the lead instead of tradefocused agencies like USTR.
USTR staff stated that U.S. trade and regulatory goals would be advanced by better, earlier
coordination between regulatory agencies and USTR. Agencies should consult with USTR at the outset
of developing regulations, to learn of potential impacts on trade and commerce. USTR would also
benefit from regulatory agencies reporting back on what they learn about other national regulatory
agendas through their formal and informal interactions with their foreign counterparts, since it is easier
to prevent the creation of unnecessary obstacles to trade and unnecessary regulatory divergences than
it is to eliminate problematic measures once they are in place.
USTR staff sees a correlation between the attention that agency leadership pays to international
issues and agencies’ effectiveness in pursuing international cooperation. The Consumer Product Safety
Commission was held out as a model agency in this regard. The agency conducts a planned and goaloriented international program with close interagency coordination. The Chair personally engages with
her foreign counterparts, and as a result, the CPSC has made considerable progress in aligning global
standards and improving compliance in the area of toy safety.

Department of State should receive confirmation that OMB has been consulted in a timely manner concerning the
proposed commitment.” 22 C.F.R. § 181.4(e)(2)

DRAFT 10-19-2011

18

International Regulatory Cooperation
B. U.S. Executive and Independent Regulatory Agencies
Review of high-level focus on international regulatory cooperation in the Executive Office of the
President provides one perspective on challenges and potential solutions, but international coordination
takes place on a day-to-day level in the various regulatory agencies, in both Cabinet departments and in
independent agencies. To research how these agencies engage with their international counterparts
and the difficulties they encounter, I reviewed documents and conducted interviews at several agencies.
Agency officials from the Federal Communications Commission, National Highway Traffic Safety
Administration, and the Securities and Exchange Commission participated in the March 2011 forum
convened by ACUS and the U.S. Chamber of Commerce. In addition, I interviewed officials at the Food
and Drug Administration, Consumer Product Safety Commission, and Federal Trade Commission. A
fuller discussion of the international activities of each agency is attached as an Appendix to this report.
This section highlights themes that emerged from reviewing these agencies – areas where agencies face
common problems, and areas where the different experiences of agencies highlight what works and
what doesn’t.
One such issue is the question of statutory authorization for international regulatory
cooperation. Differences in the degree to which agencies can engage in such activities depend on the
agency’s specific statutory authorization. Some agencies have clear authorization and a mandate to
engage in international activities. For example, the FCC has statutory mandates to pursue international
cooperation for international communications topics, including international long distance, submarine
cables, and satellites. The U.S. SAFE WEB Act of 200653 gave the FTC new authorities to share
information and provide investigative assistance to foreign law enforcement agencies. The SEC also has
statutory authority to provide enforcement assistance to its foreign counterparts.54 Yet other agencies
state that their authorizing statutes do not grant them legal authority to consider international impacts
when making regulatory decisions. The CPSC emphasized that all of its international work takes place in
pursuit of the mission of promoting product safety.55 While alignment of standards may be beneficial
from a trade perspective, the CPSC will only pursue alignment if it would increase safety, and will not
support efforts toward alignment where safety is not improved.56 NHTSA staff emphasized that the
authorizing statute makes safety the overriding priority of the agency, and there is no mention of
coordination in the authorizing statute. The SEC’s primary mission is to protect investors; maintain fair,

53

Pub. L. 109-455, 120 Stat. 3372 (2006).

54

15 U.S.C. § 78u(a)(2)

55

See also CPSC Office of International Programs and Intergovernmental Affairs, Toy Safety Regulatory and
Standards Coordination and Alignment: A Roadmap, April 25, 2011.
56

CPSC Office of International Programs and Intergovernmental Affairs, Toy Safety Regulatory and Standards
Coordination and Alignment: A Roadmap, April 25, 2011.

DRAFT 10-19-2011

19

International Regulatory Cooperation
orderly, and efficient markets; and facilitate capital formation. The SEC will only pursue alignment if it
would further that mission.
Another common theme was the extent to which agencies engage in both formal and informal
collaboration with their foreign counterparts. Agencies emphasized that extensive informal contacts
and information sharing were key to regulatory cooperation. The FDA has extensive formal and informal
exchange programs with foreign counterparts, especially the European medicine and food safety
agencies. There is an employee exchange program in place between the FDA and its EU counterparts,
and the FDA’s Deputy Commissioner for International Affairs reported that he communicates with
foreign counterparts on a daily basis. The CPSC has informal relationships with European counterparts,
with multiple phone calls and emails every week. CPSC staff also have close informal working
relationships with counterparts in Canada, Mexico, Australia, Japan, and Korea. The FTC provides
training and technical assistance to other countries in developing their regulatory policies. For example,
the FTC helped Eastern European countries write their competition laws and establish their competition
agencies. The FCC maintains an international visitors program which hosted more than 500 visitors from
overseas in 2010, and it hosts Web forums to discuss current issues with foreign counterparts. The
SEC’s international office also has a very active program to provide training and technical assistance to
foreign regulators. It conducts formal training and exchange programs attended by more than 1,000
regulators per year.
When these types of relationships with foreign counterparts are well-developed, it facilitates
formal cooperation and possible mutual recognition, which have the potential for cost savings as U.S.
agencies can divide and share workloads with foreign counterparts. The FDA believes there is great
potential for cost savings and improved health and safety in mutual reliance on the data from clinical
trials and manufacturing quality inspection regimes in other countries. For example, the FDA recently
concluded a pilot project with European and Australian regulators to inspect manufacturing plants in
China and other countries that manufacture active pharmaceutical ingredients.57 The agencies
compared their lists of plants subject to inspection and the resources that each country had available,
and where two or more agencies were scheduled to visit the same plant, the agencies agreed on one
agency to inspect that plant or to do a joint inspection, and reallocated resources so that they could
cover more plants. Building on the success of that pilot, the FDA is now pursuing a similar project with
European regulators for site inspections of clinical trials. Despite these successes, there is some
hesitance in relying upon inspectional data from foreign regulators, as it is unclear where accountability
would lie if there were a failure in the system. Although U.S. officials have views of which foreign
country regulators are reliable, it is difficult to identify data or outcome measures to support those
perceptions. The CPSC is conducting an experiment with four jurisdictions – the U.S., EU, Canada, and
Australia – to review standards for three products – corded window coverings, chairtop booster seats,
57

EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.

DRAFT 10-19-2011

20

International Regulatory Cooperation
and baby slings. The goal of the initiative is for the four agencies to review safety requirements for the
three products together, reach consensus on how requirements can be improved to remove serious
hazards, and then shepherd a consensus through either rulemaking or voluntary standards procedures,
as each jurisdiction chooses. A fully successful outcome would include an International Standards
Organization standard that closely reflects that consensus approach taken in each of the four
jurisdictions.
Some agencies noted that legal restrictions on sharing of information and data can be a barrier
to international cooperation. For example, the FDA engaged in more than 3000 confidential exchanges
with the European Medicines Agency in 2010. Data sharing with foreign regulators is critical to the
FDA’s regulatory cooperation efforts, and the FDA has a robust program of confidential exchanges with
trusted foreign regulators. However, the legal requirements to develop information sharing protocols
are burdensome. The FDA has regulations in place that allow it to share information with foreign
agencies that can protect confidential business information to the same extent as it is protected in the
United States, although under no circumstances can the FDA share trade secrets.58 So information
exchanges are possible, but require investment of time and resources to review materials to determine
what can and cannot be shared and redact materials. This can be particularly wasteful when companies
are submitting the same information to the FDA and foreign regulators, but the agencies are limited in
how they can exchange it. The CPSC faces similar restrictions. Although the agency received statutory
authority to exchange sensitive information, the legislation limits the ability of CPSC to make such
exchanges fully reciprocal. Foreign partners have rejected non-reciprocal terms, so no agreements have
been reached. The FTC has encountered similar difficulties in reaching information exchange
agreements when foreign governments insist on restricting how U.S. agencies share such information
within the U.S. government, terms which the U.S. government will not accept.
C. Stakeholder Views
To identify issues of regulatory divergence that hinder U.S. exports, the Commerce Department
issued two requests for comment on areas in which regulatory cooperation could be improved with the
European Union, and, separately, with Canada and Mexico.59 The EU request yielded 53 comments and
46 comments were submitted for the North America request.
I reviewed each comment submitted in response to the ITA requests. Overall, the comments
submitted identify technical divergences in regulations between the U.S. and the EU, Canada, and

58

21 C.F.R. § 2089.

59

Request for Public Comments Concerning Regulatory Cooperation Between the United States and the European
Union That Would Help Eliminate or Reduce Unnecessary Divergences in Regulation and in Standards Used in
Regulation That Impede U.S. Exports, 76 Fed. Reg. 24860 (May 3, 2011); 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, 76 Fed. Reg. 11760 (Mar. 3, 2011).

DRAFT 10-19-2011

21

International Regulatory Cooperation
Mexico that the submitters believe are unjustified by any policy consideration such as health, safety, or
environmental concerns, but act as de facto barriers to trade. Most of the comments are highly specific
to regulations in a particular industry or product, but my review identified several themes that appeared
in multiple comments as issues across a number of sectors:
Because EU standards are frequently adopted in other markets, divergences between
the U.S. and EU do not just hinder U.S. exports to the EU, but to other countries as
well.60
EU regulations are developed in a top-down approach, and therefore are perceived as
being less evidence-based than U.S. regulations.61
Timeframes should be sufficient to allow comment and allow transition and
implementation of new rules.62

60

Comment of Navistar, Inc. in response to Request for Public Comments Concerning Regulatory Cooperation
Between the United States and the European Union That Would Help Eliminate or Reduce Unnecessary
Divergences in Regulation and in Standards Used in Regulation That Impede U.S. Exports, 76 Fed. Reg. 24860 (May
3, 2011), available at http://www.regulations.gov, Docket No. ITA-2011-0006-0046.
61

Comment of National Confectioners Association in response to Request for Public Comments Concerning
Regulatory Cooperation Between the United States and the European Union That Would Help Eliminate or Reduce
Unnecessary Divergences in Regulation and in Standards Used in Regulation That Impede U.S. Exports, 76 Fed. Reg.
24860 (May 3, 2011), available at http://www.regulations.gov, Docket No. ITA-2011-0006-0052; Comment of
National Pork Producers Council (NPPC) and the American Meat Institute (AMI) in response to Request for Public
Comments Concerning Regulatory Cooperation Between the United States and the European Union That Would
Help Eliminate or Reduce Unnecessary Divergences in Regulation and in Standards Used in Regulation That Impede
U.S. Exports, 76 Fed. Reg. 24860 (May 3, 2011), available at http://www.regulations.gov, Docket No. ITA-20110006-0025. This view is shared by USTR. See Office of the United States Trade Representative, “European Union,”
available at http://www.ustr.gov/countries-regions/europe-middle-east/eurpoe/european-union (“the EU has
restricted or excluded altogether U.S. [agricultural] exports . . . through nontariff barriers or regulatory approaches
that do not reflect science-based decision-making or a sound assessment of actual risks to consumers or the
environment”); Office of the United States Trade Representative, Ambassador Ron Kirk, “Overly Restrictive
Regulations Effectively Shut Out Producers,” available at http://www.ustr.gov/about-us/pressoffice/blog/2011/july/overly-restrictive-regulations-effectively-shut-down-producers (“U.S. companies still face
significant ‘behind the border’ barriers, which typically take the form of complex, burdensome regulations and
standards”); Office of the United States Trade Representative, “Key Technical Barriers to American Exports,”
available at http://www.ustr.gov/about-us/press-office/fact-sheets/2010/march/key-technical-barriers-americanexports (some of the EU’s regional standards “are lacking a sufficient scientific or technical basis and *their+
adoption would favor EU producers and firms”).
62

Comment of TechAmerica in response to Request for Public Comments Concerning Regulatory Cooperation
Between the United States and the European Union That Would Help Eliminate or Reduce Unnecessary

DRAFT 10-19-2011

22

International Regulatory Cooperation
While the U.S. allows adoption of voluntary consensus standards from a range of
organizations, the EU only allows adoption of standards from a small number of
standards organizations headquartered in Europe.63
In addition to reviewing comments submitted in response to the Commerce Department
request, I also met with representatives from a range of business groups to solicit their views on
shortcomings in international regulatory cooperation and areas for improvement.64 Several themes
emerged from these discussions. First, business groups are wary of the term “harmonization” and its
implication that single, uniform, global standards should be established. Instead, business groups would
like to see compatibility and convergence between regulatory regimes, using similar testing and
evaluation methods. This would tend to reduce the burdens placed on business by regulations that are
divergent although directed toward the same goals, without locking in a single standard that business
may disfavor. Second, business groups do not believe that regulatory analysis and impact assessments
properly account for effects on trade. Third, business groups believe that agreements by global
regulators to use common data standards and scientific principles, and mutually recognize each others’
inspection regimes, would save money for governments and reduce burden on industry.65 Finally,
businesses would like to receive more advance notice from U.S. agencies that are entering into
discussions with their overseas counterparts, so business can provide comments that the agencies may
consider, rather than learning about regulatory dialogues after they have been completed.

Divergences in Regulation and in Standards Used in Regulation That Impede U.S. Exports, 76 Fed. Reg. 24860 (May
3, 2011), available at http://www.regulations.gov, Docket No. ITA-2011-0006-0031.
63

Comment of Air-Conditioning, Heating, and Refrigeration Institute in response to Request for Public Comments
Concerning Regulatory Cooperation Between the United States and the European Union That Would Help
Eliminate or Reduce Unnecessary Divergences in Regulation and in Standards Used in Regulation That Impede U.S.
Exports, 76 Fed. Reg. 24860 (May 3, 2011), available at http://www.regulations.gov, Docket No. ITA-2011-00060018.
64

On August 16, 2011, I met with representatives from the U.S. Chamber of Commerce Global Regulatory
Cooperation Project, Business Roundtable, American Chemistry Council, National Association of Manufacturers,
American Bankers Association, and BAFT-IFSA (Bankers’ Association for Finance and Trade-International Financial
Services Association).
65

“Some governments do not permit U.S. suppliers to use competent conformity assessment bodies . . . located in
the United States to demonstrate that their products comply with their technological regulations. Rather, U.S.
exporters are required to use conformity assessment services provided by bodies in the destination market, which
can impose additional costs and burdens on U.S. exporters . . . . These costs and burdens can be compounded by
significant delays when the foreign market lacks sufficient domestic testing, inspection, or certification capacity.”
Office of the United States Trade Representative, “Key Technical Barriers to American Exports,” available at
http://www.ustr.gov/about-us/press-office/fact-sheets/2010/march/key-technical-barriers-american-exports.

DRAFT 10-19-2011

23

International Regulatory Cooperation
A working paper prepared for the U.S. Chamber of Commerce proposed ten questions to be
considered during regulatory impact analysis in assessing the costs and benefits of regulatory alignment
between the United States and European Union:
1.

What is the market failure or compelling national need that requires a divergent
regulation?

2.

Does a statute or other legal impediment prevent an administrative mutual recognition
agreement that would permit the reduction of the divergent regulation?

3.

What are the costs/savings to the private sector (if any) of complying with a single set of
regulations compared to the costs of complying with two or more sets of divergent
regulations?

4.

What are the budgetary savings to the two regulatory authorities of developing,
inspecting, and enforcing two sets of regulations compared to one?

5.

How much is transatlantic trade likely to increase as a result of the lower transaction
costs from the elimination of the divergent rules?

6.

How much would estimated benefits increase if regulatory spillover benefits to the
transatlantic partner are included in the benefit estimates?

7.

Would there be a change in the regulatory alternative recommended if the net-benefits
are increased relative to the baseline of divergent regulations?

8.

What are the quantitative and qualitative benefits of a transatlantic regulatory
alternative compared to the domestic-oriented regulation?

9.

Taking into account the factors above, do the benefits of divergent regulations
compared to the costs justify two separate regulatory regimes?

10.

If legal, political, or pragmatic factors currently compel divergent regulations, are there
reasons to believe that these regulatory regimes are compatible and that pursuit of a
long run strategy to overcome the identified obstacles should be bilaterally pursued?66

The comments received in response to the Commerce Department request were mainly from
industry groups; consumer groups did not submit comments. However, in the past, consumer groups
have expressed concern that regulatory alignment efforts had the potential to sacrifice regulatory
effectiveness in favor of trade promotion.67 The concern has been that alignment entails a race to the
66

Morrall, supra note 29, at 12-13.

67

See David Lifshiz, Updating American Administrative Law; WTO, International Standards, Domestic
Implementation and Public Participation, 24 WIS. INT’L L.J. 961, 977 (2007); Lori M. Wallach, Accountable

DRAFT 10-19-2011

24

International Regulatory Cooperation
bottom. (This is the opposite of the business concern that alignment would lead to overly rigid
standards.) I did not identify evidence that the concerns of consumer groups that alignment would lead
to lower standards have been realized, and U.S. government officials do not believe that such a problem
exists. In fact, several U.S. officials stated that their international activities were intended to raise and
improve standards. However, such views should be accounted for in the Conference recommendation if
they emerge in the consideration process.
V.

Analysis of Challenges in International Regulatory Cooperation and Potential Solutions

Barriers to effective international coordination for U.S. regulators can arise from legal
authorities governing agencies, agency incentives and resources, and the relatively decentralized
structure of federal administrative agencies.
A threshold question for U.S. administrative agencies in pursuing international convergence in
their regulatory activities is whether they have the statutory authorization to do so. It is a tenet of
American administrative law that agencies may exercise only the powers assigned to them by Congress
in statute, and interviews revealed that agencies take this restriction quite seriously in limiting the
extent to which they can consider international implications of their work. Many agencies were
established by statute in the first half of the 20th century, when today’s global economy was not even
contemplated. While some agencies have clear statutory authority to coordinate regulatory activities
with overseas counterparts, other agencies stated that they were limited in their ability to do so, as it
was not part of their agency’s statutory mission. The CPSC has a statutory mission of ensuring product
safety, and the agency’s position is that product safety can be the only factor in issuing regulations and
setting its enforcement agenda. Similarly, NHTSA has a statutory mission of promoting vehicle safety;
international convergence is not provided as a factor that may be considered. These agencies state that
they work with international counterparts on developing regulations and on enforcement issues, but
can do so only to the extent that these activities clearly further the agency’s goal of promoting safety.
For example, even if minor compromises on a safety regulation would allow regulatory alignment that
would greatly facilitate business and trade, these agencies do not believe that they have the statutory
authority to make such a compromise.
To address this problem, several officials suggested that ACUS might recommend to Congress a
statute that would explicitly permit agencies to pursue international coordination and consider the
effects of regulations on trade and U.S. competitiveness. While this solution may solve one problem, it
creates other problems of its own. First, the Administrative Conference’s authorizing statute states that
the administrative procedure that ACUS is to consider “does not include the scope of agency

Governance in the Era of Globalization: The WTO, NAFTA, and International Harmonization of Standards, 50 U. KAN.
L. REV. 823, 831 (2002).

DRAFT 10-19-2011

25

International Regulatory Cooperation
responsibility as established by law.”68 Second, such a change could create conflicts of interest for the
regulator, creating a potential for regulatory capture if the same regulator is trying to both regulate and
promote a particular industry. Collaboration may also create perceptions that a regulator is acting on
behalf of U.S. industry rather than pursuing regulatory goals, diminishing the credibility of the regulator
in the eyes of its foreign counterparts.69 Such a perception can also hinder the effectiveness of the U.S.
Trade Representative in persuading other countries to abandon regulations that act as protectionist
barriers to trade. Finally, many agencies believe they already have ample authority under their statutes,
so a one-size solution is not necessary. The better approach for an ACUS recommendation may be to
encourage each agency to conduct its own analysis of legal authorities and, if authority for international
cooperation is insufficient, to seek new authority through OMB and the legislative process.
Another challenge that agencies face is that agency leadership and resources are not focused on
international coordination. While all agencies reviewed have international affairs offices, several stated
that the amount of work necessary to achieve effective international cooperation outstripped the
personnel and budgetary resources available. Agencies and their leaders focus on priorities of key
constituencies, Congress, and high-profile issues. International regulatory cooperation seldom garners
such attention. As one agency official put it, there are a lot of issues that could land an agency leader in
hot water, but no political appointee is ever going to get in trouble with Congress or the press because
of obscure technical differences between their agency regulations and those of foreign regulators.
However, if an agency relied on a foreign counterpart to regulate or inspect and a problem arose which
threatened health or safety in the U.S., the U.S. agency would be exposed to criticism. Another former
official pointed out that for regulatory agencies, their impact is global, but political accountability is
local. Because of this, several senior officials emphasized that high-level attention and leadership on
international regulatory cooperation is essential to its success, to push officials to pursue international
cooperation and give them cover from criticism if such cooperation creates complications.
A factor that can hinder international efforts is the relative independence of U.S. regulatory
agencies from central, executive branch control. The degree of independence of regulatory agencies is
one of the great questions of American administrative law, but the principle that certain regulators
enjoy a measure of independence vis-à-vis other agencies is widely accepted. These issues of
institutional structure can present obstacles to international coordination, as U.S. regulators may be
pursuing policy goals and priorities that are not necessarily integrated with other U.S. national priorities
pursued by other agencies. These potential conflicts can arise most prominently in the context of trade,
68

5 U.S.C. § 592(3).

69

Likewise, fears of the domestic industries that foreign regulators have been captured by their own regulated
industry could diminish the foreign regulator in the eyes of U.S. regulators. See, e.g., Office of the United States
Trade Representative, “Key Technical Barriers to American Exports,” available at http://www.ustr.gov/aboutus/press-office/fact-sheets/2010/march/key-technical-barriers-american-exports (some of the EU’s regional
standards “are lacking a sufficient scientific or technical basis and whose adoption would favor EU producers and
firms”).

DRAFT 10-19-2011

26

International Regulatory Cooperation
as U.S. government agencies such as the U.S. Trade Representative and Department of Commerce work
to open markets and reduce trade barriers, but regulatory agencies may pursue their own regulatory
goals that are not coordinated with, or are even in conflict with, the trade promotion agenda. This
contrasts with the European Union, where both regulatory and trade policy are coordinated in the
European Commission. To address this problem, regulatory agencies might consider whether they can
work more closely with the White House and executive branch agencies when their actions implicate
international issues.
Several officials recommended improved international coordination as a resource-saving
measure. As the federal government seems to be entering an extended period of constraints on the
discretionary budgets that fund most federal agencies, agencies facing budget constraints are exploring
improved alliances with foreign counterparts to eliminate duplicate efforts and share burdens of
inspection and enforcement. For example, the FDA recently concluded a pilot project with European
and Australian regulators to inspect manufacturing plants in China and India that manufacture
pharmaceutical components.70 The agencies compared their lists of plants subject to inspection and the
resources that each country had available, and where two or more agencies were scheduled to visit the
same plant, the agencies agreed on one agency to inspect that plant, and reallocated resources so that
they could cover more plants. Building on the success of that pilot, the FDA is now pursuing a similar
project with European regulators for site inspections of clinical trials.
Another constraint on international regulatory cooperation is legal restrictions on the extent to
which U.S. agencies can share data with their international counterparts. Although agencies are subject
to different restrictions, it is common for agencies to receive trade secret and confidential business
information in the course of their regulatory activities, for which there are restrictions on disclosure.
Before sharing information with foreign counterparts, agencies must consider whether they can do so
consistent with law and regulation. While protection of trade secrets is important so that agencies can
receive accurate information from regulated industries, regulated industries frequently submit the same
data to foreign regulators, and foreign regulators have their own legal restrictions on how they may
disclose trade secret information that they receive.
VI.

Recommendations
A. Analysis of the 1991 ACUS Recommendation

Based on the research and analysis presented above, this section reviews the 1991
recommendation (printed in italics) to assess which portions remain relevant and can be restated and
which should be modified.

70

EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.

DRAFT 10-19-2011

27

International Regulatory Cooperation
1. Each agency should inform itself of the existence of foreign (including regional and international)
regulatory bodies [FN1] whose activities may relate to the mission of that agency.
[FN1] Throughout this recommendation, the term "foreign regulatory bodies" includes, where
appropriate, also regional and international regulatory bodies.
As discussed in the introduction, the past 20 years have seen the development of multiple new
and varied institutions for regulatory cooperation, and every U.S. regulatory agency reviewed has
established an active international affairs office. However, this paragraph remains relevant and can be
restated in a new recommendation.
2. Each agency should determine whether and to what extent regulatory cooperation with one
or more foreign regulatory bodies is appropriate. Desirable forms of cooperation may include the simple
exchange of information, coordination of regulatory objectives, consultation in advance of rulemaking,
and reciprocal participation in rulemaking processes. Apart from general considerations of cost and
staffing, factors to be considered in deciding the importance and intensity of the cooperative effort to be
made, the forms of cooperation to adopt, and the geographic range of foreign regulatory bodies with
which to cooperate, include:
a. The extent to which the participating regulatory agencies share common regulatory objectives;
b. The importance of commonality, and therefore international harmonization, [FN2] in the development
of regulatory policy in the particular field;
[FN2] Harmonization does not necessarily imply regulatory uniformity. It implies a reduction in the
differences (including but not limited to inconsistencies) among the regulatory standards of different
jurisdictions.
c. The extent to which the capabilities of foreign regulatory bodies justify the agency's reliance on their
technical, regulatory and administrative resources;
d. The opportunities that international regulatory cooperation presents for improvement in the
enforcement and administration of the agency's program (as, for example, through mutual recognition
of tests, inspections and certifications or through mutual assistance in information gathering and other
forms of assistance);
e. The presence of existing bilateral or multilateral international frameworks for addressing common
regulatory concerns;
f. The receptivity of a given foreign regulatory body to meaningful participation by American regulatory
and private interests in its policymaking processes; and
g. In appropriate consultation with the Department of State, the foreign policy of the United States.

DRAFT 10-19-2011

28

International Regulatory Cooperation
This paragraph addresses how agencies should determine whether and to what extent they
engage with foreign counterparts, and factors to be considered. Although in 1991 there may have been
some agencies for which engagement with international affairs was not necessary, in today’s
interconnected world, the Conference might consider restating this paragraph in stronger terms – that
agencies should engage with foreign counterparts, not just that they should consider whether to do so.
The factors to be weighed in determining the extent of cooperation cover a range of topics, and
might be most usefully considered separately. Subparts c and d address mutual recognition and reliance
on other agencies, which was a point of emphasis for officials interviewed for this report, and can form
the basis for a separate paragraph in the new recommendation. Similarly, subpart g addresses an aspect
of how an agency’s international cooperation might fit in with the larger agenda of the U.S. government,
which is a critical issue discussed above, and can form the basis for a separate paragraph.
3. Even when an agency concludes that the factors set out in paragraph 2 do not counsel substantial
regulatory cooperation with foreign governments, it should nevertheless explore the possibilities of
international cooperation in enforcement, including mutual assistance in information gathering and,
where appropriate, reliance upon foreign tests, inspections, and certifications.
The 1991 recommendation draws a distinction between international cooperation in developing
regulations and cooperation in enforcement, and addresses itself only to the former. Although there
may be formal distinctions between the two, this study found that most agencies with international
programs are engaged in cooperation in both regulations and enforcement. Some of the issues
identified, such as the need for reliable mechanisms to share common data, apply equally to
cooperation in both regulation and enforcement. The new ACUS recommendation on international
regulatory cooperation could expand the focus beyond development of regulations and identify
principles that apply both to development of regulations and enforcement practices, as relationships
between agencies and their foreign counterparts produce a continuum of cooperation that crosses both
areas.
4. When an agency concludes that it has a pronounced interest in cooperation with foreign regulatory
bodies, it should consider adopting various modes of cooperation with those agencies, including:
a. The establishment of common regulatory agendas;
b. The systematic exchange of information about present and proposed foreign regulation;
c. Concerted efforts to reduce differences between the agency's rules and those adopted by foreign
government regulators where those differences are not justified;
d. The creation of joint technical or working groups to conduct joint research and development and to
identify common solutions to regulatory problems (for example, through parallel notices of proposed
rulemaking);

DRAFT 10-19-2011

29

International Regulatory Cooperation
e. The establishment of joint administrative teams to draft common procedures and enforcement
policies;
f. The mutual recognition of foreign agency tests, inspections and certifications, to the extent that the
American agency is satisfied that foreign regulatory bodies have sufficient expertise and employ
comparable standards; and
g. The holding of periodic bilateral or multilateral meetings to assess the effectiveness of past
cooperative efforts and to chart future ones.
The description of potential methods of collaboration between agencies and their foreign
counterparts from the 1991 recommendation remains relevant today; the listed range of techniques
that agencies may use in pursuing regulatory cooperation are consistent with the types of activities that
agencies interviewed for this report have employed. Subpart f, recommending mutual recognition of
foreign agency tests, is worthy of added emphasis, since several officials recommended worksharing
with foreign agencies as having potential for expanding capacity while reducing costs. This potential for
cost savings is important in the current budget climate and might be addressed more prominently as a
separate paragraph.
5. a. When engaging in international regulatory cooperation, an agency should ensure that it does so in a
manner consistent with national statutes and international engagements.
b. An agency engaging in international regulatory cooperation should also be alert to the possibility that
foreign regulatory bodies may have different regulatory objectives, particularly where a governmentowned or controlled enterprise is involved.
This section of the 1991 recommendation briefly touches on some of the most significant issues
identified in this report – how U.S. agencies balance consideration of regulatory alignment against their
statutory missions and U.S. treaty obligations, and the implications of cooperation for business and
trade interests. These issues should receive more thorough consideration in any new recommendation,
as discussed above and proposed below.
6. To promote acceptance of and compliance with the measures that result from its cooperation with
foreign regulatory bodies, an agency should enlist the support and participation of other affected
agencies, regulated interests, public interest groups, and other affected domestic interests, as follows:
a. Where appropriate, agencies should, so far as considerations of time and international relations
permit, afford affected private and public interests timely notice of any formal system of collaboration
with foreign regulatory bodies that exists and an opportunity where reasonable to participate and
comment on decisionmaking under such system.
b. The agency should, where appropriate, also encourage the establishment of working relations
between domestic interests and their foreign counterparts, including manufacturers, other trade and
industry interests, and consumer and other public interest groups.
DRAFT 10-19-2011

30

International Regulatory Cooperation
c. The agency should assemble an interagency advisory group, consisting of the Department of State and
other affected agencies such as the Departments of Commerce and Defense and the U.S. Trade
Representative's Office, if one does not exist. Each member agency of an advisory group should, without
prejudice to its independent decisionmaking, both inform that group about the nature and extent of its
concerted activities with foreign regulatory bodies relevant to the purposes of the group and seek that
group's advice. In addition, the Chairman of the Administrative Conference should convene a meeting of
the heads of interested agencies to discuss the need for establishing a permanent, government-wide
mechanism for organizing, promoting, and monitoring international regulatory cooperation on the part
of American agencies.
This part of the 1991 recommendation, on outreach by U.S. regulatory agencies, deals with
three different aspects of outreach that may better be considered separately. Subpart a, providing for
public notice of proposed regulatory cooperation, can be restated and possibly emphasized and
expanded. Improved information technology and treaty obligations have greatly increased
transparency, and there is a consensus among stakeholders interviewed for this report that
transparency is essential to effective international regulatory cooperation. Subpart b, suggesting that
federal agencies encourage connections between U.S. and foreign interest groups, might be abandoned.
The rise of the Internet has reduced barriers to communication between U.S. and overseas groups, such
that the encouragement of U.S. agencies to form such connections does not appear to be necessary.71
In preparing this report, I did not encounter any information suggesting that absence of links between
U.S. and foreign interest groups was a problem. Subpart c, addressing how U.S. agencies coordinate
interests within the United States government, is a major issue identified in this report. The specific
solutions recommended in this subpart do not seem to have been implemented. Although agencies
participate to varying degrees in interagency working groups, the interagency advisory groups within
each U.S. regulatory agency contemplated by this recommendation do not exist in any formal or
consistent way. And while access to records from 20 years ago is incomplete, I have not found any
record that the meeting to discuss establishing a permanent, government-wide mechanism for
organizing U.S. international regulatory cooperation ever took place. The results of the current study
suggest that the need and desire for such a coordinating mechanism remains. A new ACUS
recommendation should address the need for better mechanisms for coordination within the U.S.
government, and I present options for the form that mechanism should take in the proposed
recommendation below.

71

Indeed, there may be some agencies, such as the Nuclear Regulatory Commission, for whom an express
promotion of communication between the US and foreign industries might be construed as a violation of its
statutory charter. When Congress abolished the Atomic Energy Commission (AEC) and created the NRC in 1975, it
assigned to the NRC the AEC’s regulatory responsibilities, and it assigned to the Energy Research and Development
Administration (now part of the DOE) the AEC’s responsibilities involving industry promotion. See 42 U.S.C. §§
5814(a), (c), 5841(a), (f).

DRAFT 10-19-2011

31

International Regulatory Cooperation
7. Agencies should, consistent with their statutory mandate and the public interest, give sympathetic
consideration to petitions by private and public interest groups for proposed rulemaking that
contemplate the reduction of differences between agency rules and the rules adopted by foreign
government regulators, where those differences are not justified.
This paragraph, stating that agencies should consider petitions to eliminate unnecessary
divergences between their regulations and foreign regulations, can be restated in the parts of the new
recommendation addressing transparency and participation.
8. a. Once an agency has a program of international regulatory cooperation with a foreign regulatory
body, it should routinely advise that body before initiating proposed rulemaking, and should seek to
engage that body's participation in the rulemaking process.
b. Conversely, the agency should see to it that it is informed of initiatives by those foreign regulatory
bodies and ensure that its views are considered by those bodies early in the conduct of their rulemaking
procedures.
c. Where, following joint rule development efforts, an agency ultimately proposes a rule that differs from
the rule proposed by the foreign counterpart, it should specify the difference in its notice of proposed
rulemaking and request that it be specified in any corresponding foreign notice.
This paragraph, that agencies with cooperative relationships should provide notice of and
comment in each others’ proceedings, has been implemented through the Notify U.S. system, required
by the WTO under the Technical Barriers to Trade agreement and administered by NIST.
9. An agency should adopt reasonable measures to facilitate communication of views by foreign
regulatory bodies on proposed rules.
This paragraph has also been implemented through the Notify U.S. system, required by the WTO
under the Technical Barriers to Trade agreement and administered by NIST.
10. While international consultations of the sort described in this recommendation do not appear to
necessitate any radical departure from an agency's ordinary practices in compliance with applicable
procedural statutes, [FN3] an agency engaged in such consultations should make reasonable efforts to
ensure that affected interests are aware of them. For example, when an agency substantially relies on
those consultations in its rulemaking (or where foreign government rules, practices or views have
otherwise substantially influenced the agency's proposals), it should describe both the fact and the
substance of those consultations in its notices of proposed rulemaking, rulemaking records and
statements of basis and purpose under the Administrative Procedure Act. Where the objective of
harmonizing American and foreign agency rules has had a significant influence on the shape of the rule,
that fact also should be acknowledged.
[FN3] See, e.g., Federal Communications Commission v. ITT World Communications, Inc., 466 U.S. 463
(1984) (international consultative processes leading to informal policy understandings are not covered by
DRAFT 10-19-2011

32

International Regulatory Cooperation
Government in the Sunshine Act); Public Citizen v. United States Department of Justice, 109 S. Ct. 2558
(1989); Food Chemical News v. Young, 900 F. 2d 328 (D.C. Cir. 1990); Center for Auto Safety v. Federal
Highway Administration, No. C.A. 89-1045 (D.D.C. Oct. 12, 1990) (groups not formed by the Executive
Branch are not "utilized" committees within the meaning of FACA).
This paragraph, that agencies publically acknowledge when international regulatory
coordination has played a role in its process, comports with the accepted practice and OMB guidance. It
can be restated in the context of new recommendations regarding transparency and participation.
11. An agency that engages in systematic exchanges of information and consultation with foreign
regulatory bodies should seek to ensure that domestic interests do not suffer competitive disadvantage
from the release of valuable information by those bodies to foreign private interests. This may require
that the agency seek to reach agreement with its foreign counterparts concerning the conditions under
which information will be disclosed.
This paragraph addresses the handling of confidential information exchanges, which
stakeholders interviewed for this study identified as a major complication in international regulatory
cooperation. It can be updated and restated in the new recommendation.
12. While harmonization of standards with foreign regulatory bodies may be a legitimate objective of
any agency whose activities affect transnational interests or transactions (and therefore may
appropriately influence the rulemaking outcome), it should be pursued within the overall framework of
the agency's statutory mandate and with due regard for the interests that Congress intended the agency
to promote. Accordingly, agencies should ensure that any accord informally reached through
international regulatory cooperation is genuinely subject to reexamination and reconsideration in the
course of the rulemaking process.
Whether and how agencies can pursue international regulatory cooperation within their
statutory mandate is a key issue addressed by this study. As discussed in the analysis section above, the
legal considerations for agencies in reconciling regulatory convergence with their statutory, domestic
responsibilities can vary by agency, depending on authorizing statutes. The interests of this paragraph,
that agency international cooperation should not conflict with its regulatory mission, can be
incorporated in the new ACUS recommendation.
B. Proposed ACUS Recommendations
1. Each agency should inform itself of the existence of foreign (including regional and
international) authorities whose activities may relate to the mission of that agency. Each
agency should consider a strategy for regulatory cooperation with one or more foreign
authorities, when appropriate to further the agency’s regulatory mission or remove
unjustified barriers to trade.

DRAFT 10-19-2011

33

International Regulatory Cooperation
2. Agencies should review their legal authorities to cooperate with foreign authorities and
international organizations under their authorizing statutes, the WTO Agreement on
Technical Barriers to Trade and other relevant treaties adopted by the U.S., and OMB
guidance. Agencies that determine their legal authorities do not sufficiently permit
international cooperation that would benefit their regulatory mission and U.S.
competitiveness should recommend appropriate amendments to OMB and Congress.
Absent clear conflict with other legal authority, agencies should consider the international
implications of regulatory activity, consistent with OMB guidance.
3. When an agency concludes that it has authority and interest in cooperation with foreign
authorities, it should consider adopting various modes of cooperation with those
authorities, including but not limited to:
a. The establishment of common regulatory agendas;
b. The exchange of information about present and proposed foreign regulation;
c. Concerted efforts to reduce differences between the agency's rules and those
adopted by foreign government regulators where those differences are not justified;
d. The holding of periodic bilateral or multilateral meetings to assess the effectiveness
of past cooperative efforts and to chart future ones.
e. Mutual recognition of tests, inspections, and certifications of foreign agencies
4. To deploy limited resources more effectively, agencies should identify foreign regulatory
agencies that maintain high quality and appropriate standards; identify areas in which the
tests, inspections, or certifications of U.S. agencies and such foreign agencies overlap; and,
where appropriate, divide responsibility for necessary tests, inspections, and certifications
and mutually recognize their results. When practicable, agencies should also create joint
technical or working groups to conduct joint research and development and to identify
common solutions to regulatory problems (for example, through parallel notices of
proposed rulemaking) and establish joint administrative teams to draft common procedures
and enforcement policies. U.S. agencies should document cost savings and regulatory
benefits from such mutual arrangements.
5. To accurately assess whether foreign authorities maintain high quality and appropriate
standards, U.S. agencies should develop and maintain relationships with foreign
counterparts by methods such as providing training and technical assistance to foreign
agencies and developing employee exchange programs, as resources permit. U.S. agencies
should also consider whether foreign or international practices represent best practices that
should be considered for adoption in the U.S.

DRAFT 10-19-2011

34

International Regulatory Cooperation
6. U.S. agencies should engage in exchanges of information with their foreign counterparts to
promote better data-driven decisionmaking. Types of information exchanges may include
formal agreements to share data or informal dialogues among agency staff. To facilitate
cooperation, information exchange should be mutually beneficial and reciprocal, to the
extent practicable. Prior to exchanging information, agencies must reach arrangements
with foreign counterparts that will protect sensitive information such as confidential
information or trade secrets.
7. U.S. agency interactions with their foreign counterparts should be transparent, subject to
appropriate exceptions to protect law enforcement, trade secrets, or similar sensitive
information. When engaging in regulatory dialogues with foreign counterparts, U.S.
agencies should seek input and participation from interested parties as appropriate, through
either formal means such as Federal Register notices and requests for comments or informal
means such as outreach to regulated industries, consumers, and other stakeholders.
Agencies should, consistent with their statutory mandate and the public interest, consider
petitions by private and public interest groups for proposed rulemaking that contemplate
the reduction of differences between agency rules and the rules adopted by foreign
government regulators, where those differences are not justified.
8. Agencies should promote to their overseas counterparts and to other standards-setting
bodies the principles of transparency, openness and participation, evidence-based and riskbased regulation, cost-benefit analysis, consensus-based decisionmaking, and impartiality
that undergird the U.S. administrative and regulatory process.
9.

When engaging with foreign authorities, U.S. agencies should consult with other U.S.
government agencies with interests that may be affected by the engagement, including but
not limited to OIRA, USTR, Commerce, State, and Defense. In particular, agencies should
adhere to the requirements of 22 C.F.R. § 181.4, requiring agencies to consult with OIRA
before entering into international agreements that require significant regulatory action, and
19 U.S.C. § 2541, giving the U.S. Trade Representative responsibility for establishing mutual
arrangements for standards-related activities. An agency engaging in international
regulatory cooperation should also be alert to the possibility that foreign regulatory bodies
may have different regulatory objectives, particularly where a government-owned or
controlled enterprise is involved.

10. To provide high-level, government-wide leadership on international regulatory issues, the
Executive Office of the President should create a permanent, high-level interagency working
group of agency heads and other senior officials. The Chairman of the Administrative
Conference should convene a meeting of the heads of interested agencies to consider the
best form of organization for such a working group, including the appropriate organization,
funding, and staffing of such a mechanism; existing efforts at interagency coordination and
differences among agencies with respect to existing international cooperation agreements;
DRAFT 10-19-2011

35

International Regulatory Cooperation
and whether an Office of International Affairs should be established within the Office of
Information and Regulatory Affairs.
11. While international consultations of the sort described in this recommendation do not
appear to necessitate any radical departure from an agency's ordinary practices in
compliance with applicable procedural statutes, an agency engaged in such consultations
should make reasonable efforts to ensure that affected interests are aware of them. For
example, when an agency substantially relies on those consultations in its rulemaking (or
where foreign government rules, practices or views have otherwise substantially influenced
the agency's proposals), it should describe both the fact and the substance of those
consultations in its notices of proposed rulemaking, rulemaking records and statements of
basis and purpose under the Administrative Procedure Act. Where the objective of aligning
American and foreign agency rules has had a significant influence on the shape of the rule,
that fact also should be acknowledged.
VII.

Conclusion

This study found that U.S. agencies engage in extensive international regulatory cooperation,
which is a necessary component of their regulatory missions in today’s globally integrated economy.
While progress has been made in reducing unnecessary barriers to cooperation between countries, the
scope of the problem leaves much more work to be done. There are some systemic barriers to
coordination between U.S. agencies and their foreign counterparts, and ACUS recommendations can
reduce those barriers by promoting best practices in mutual reliance, information sharing, and
coordination within the U.S. government.

DRAFT 10-19-2011

36

International Regulatory Cooperation
Appendix
Individual Agencies’ Perspectives on International Regulatory Cooperation
Consumer Product Safety Commission
The Consumer Product Safety Commission has the mission of protecting the public against
unreasonable risks of injury from consumer products through education, safety standards activities,
regulation, and enforcement.72 Due to the large number of consumer products that enter the U.S. as
imports, the CPSC has actively pursued international coordination of standards and enforcement.
However, CPSC emphasized that all of its international work takes place in pursuit of the mission of
promoting product safety.73 While alignment of standards may be beneficial from a trade perspective,
the CPSC will only pursue alignment if it would increase safety, and will not support efforts toward
alignment where safety is not improved.74 In addition to the statutory mandate to improve safety, the
status of the CPSC as an independent regulatory agency also affects how it approaches international
issues. Unlike the European Union, where trade and regulatory agencies are integrated, many U.S.
regulators have unique and sole mandates. For example, although the CPSC actively participates in
meetings of coordinating bodies such as the Transatlantic Economic Council and the U.S.-EC High Level
Regulatory Cooperation Forum, its staff cannot agree to undertake specific deliverables since their work
may not be directed apart from an agenda voted by the Commission. Moreover, its regulatory
coordination activities must be focused on improving product safety.
CPSC has had success in aligning regulations because it relies mainly on voluntary standards
organizations, rather than issuing government-developed regulations. CPSC staff expressed the view
that it is the responsibility of industry to work through voluntary standards organizations toward
regulatory alignment, not the job of national governments to make everything magically line up.
However, the CPSC is conducting an experiment with four jurisdictions – the U.S., EU, Canada, and
Australia – to review standards for three products – corded window coverings, chairtop booster seats,
and baby slings. The goal of the initiative is for the four agencies to review safety requirements for the
three products together, reach consensus on how requirements can be improved to remove serious
hazards, and then shepherd a consensus through either rulemaking or voluntary standards procedures,
as each jurisdiction chooses. A fully successful outcome would include an International Standards
Organization standard that closely reflects that consensus approach taken in each of the four
jurisdictions.

72

U.S. Consumer Product Safety Commission, 2011-2016 Strategic Plan.

73

Interview with CPSC staff, July 18, 2011; see also CPSC Office of International Programs and Intergovernmental
Affairs, Toy Safety Regulatory and Standards Coordination and Alignment: A Roadmap, April 25, 2011.
74

CPSC Office of International Programs and Intergovernmental Affairs, Toy Safety Regulatory and Standards
Coordination and Alignment: A Roadmap, April 25, 2011.

DRAFT 10-19-2011

37

International Regulatory Cooperation
The CPSC is also a leader in the Working Party on Consumer Product Safety within the
Committee on Consumer Policy at the Organization for Economic Cooperation and Development
(OECD). In the Working Party, in which the CPSC serves in a vice chair role, the agency is spearheading
the creation of a global web platform on which the world’s product safety regulators (not just OECD
members) will be able to have their product recall information displayed in a single global pool for
anyone in the world to see. This is the first of a number of projects in the Working Party’s work plan
that will enhance international regulatory coordination. In addition to the OECD, the CPSC cooperates
closely with USTR and USDOC in capacity building and regulatory coordination in APEC and it also works
closely with the Organization of American States on capacity building for product safety regulators in the
Western Hemisphere. The CPSC stresses that its international coordination and capacity building work
must have a calculated benefit to U.S. consumers by helping to ensure the safety of consumer products
manufactured abroad that may find their way into the United States.
In addition to formal cooperation programs like this, the CPSC also engages in informal
collaborations with foreign counterparts – in particular, the CPSC international office proactively notifies
their foreign colleagues about proposed changes to regulations, instead of solely relying on Federal
Register notices. The informal relationships with European counterparts are especially strong, with
multiple phone calls and emails every week. CPSC staff also have close informal working relationships
with counterparts in Canada, Mexico, Australia, Japan, and Korea.
Federal Trade Commission
The Federal Trade Commission engages in international activity across its functions of antitrust
enforcement, consumer protection, and privacy. The FTC’s Office of International Affairs has a staff of
25. Prior to 2007, international affairs staff were spread throughout the FTC’s bureaus, but are now
consolidated in one office of international affairs, with a director reporting directly to the FTC Chairman.
FTC staff believe that this organizational structure gives the international functions greater stature in
dealing with other U.S. government agencies and with foreign counterparts.
For enforcement on consumer protection and privacy matters, the FTC has a bilateral
cooperation agreement in place with Canada and Memoranda of Understanding with other countries.
The U.S. SAFE WEB Act of 200675 gave the FTC new authorities to share information and provide
investigative assistance to foreign law enforcement agencies. FTC staff stated that clear legislative
authority to share information with foreign counterparts is key to their consumer protection mission,
since so much of the workload in areas such as Internet fraud crosses national boundaries.
The FTC is aware of business interests and tries not to disadvantage them, but the mission of the
agency is consumer protection, not promotion of business. FTC staff believe that the agency would lose
credibility if it were perceived by foreign counterparts as promoting U.S. business interests. For
example, when U.S. business interests had concerns about a new consumer protection regime in
75

Pub. L. 109-455, 120 Stat. 3372 (2006).

DRAFT 10-19-2011

38

International Regulatory Cooperation
Australia, the FTC did not intervene with their counterparts in Australia. However, the FTC did
informally advise the U.S. Trade Representative and Commerce Department on the issues involved.
The FTC participates in interagency working groups within the U.S. government on issues such as
privacy protection, joining with the Commerce, State, and Justice Departments. FTC staff are not
concerned that participation in such working groups compromises the FTC’s status as an independent
regulatory agency, because such cooperation is essential to effectively carry out the mission of the
agency. On some issues, like rules for transfer of consumer data, the FTC and Commerce Department
are approaching the issue with different goals, but have generally been able to accommodate each
others’ concerns.
Like other officials interviewed, FTC staff support convergence of regulatory policy in areas such
as antitrust, but believe that total harmonization should not be the goal, since the U.S. and EU have
reached different policy judgments in areas such as antitrust and privacy. FTC staff believes there is
room to reduce the transaction costs for business by encouraging implementation of the non-binding
recommendations of the International Competition Network, which provide for streamlined merger
filing obligations. They also pursue convergence of substantive merger review standards, recognizing
that it is ultimately up to each national enforcer to determine how to interpret and implement its
national law.76
The FTC provides training and technical assistance to other countries in developing their
regulatory policies. For example, the FTC helped Eastern European countries write their competition
laws and establish their competition agencies, and, more recently, has been training officials in China
and India in connection with the design and implementation of competition laws and policies. FTC staff
sees the EU also actively working to export European-style regulations to new economies as they
develop, in areas such as privacy protection. Because the EU regulatory system tends to adopt formal,
rigid rules – as opposed to the flexible guidelines approach of the U.S. in this area77 – they are easier for
developing countries to adopt, since these countries tend to have limited institutional capacity and a
civil law tradition.
Federal Communications Commission
The Federal Communications Commission has an International Bureau with 40 staff. The Bureau
is divided into three divisions: policy, satellite, and strategic analysis and negotiations. The FCC has
statutory mandates to pursue international cooperation for international communications topics
including international long distance, submarine cables, and satellites. In its role regulating radio waves,

76

See John J. Parisi, Cooperation Among Competition Authorities in Merger Regulation, 45 CORNELL INT’L L. J. 55, 63
(2010).
77

See Lawrence A. Kogan, The Extra-WTO Precautionary Principle: One European “Fashion” Export the United
States Can Do Without, 17 TEMP. POL. & CIV. RTS. L. REV. 491, 521 (2008).

DRAFT 10-19-2011

39

International Regulatory Cooperation
the FCC must coordinate with Canada and Mexico to coordinate allocation of these resources in border
regions.
The FCC works very closely with operators when they have problems overseas. For example,
when a Pacific island nation cut off access to U.S. telecom companies over a payment dispute, the FCC
issued a stop payment order so that the island nation would not be paid through the settlement process
until the dispute was resolved. The FCC also participates in multilateral organizations such as the
International Telecommunications Union which allocates spectrum globally, and the FCC represents U.S.
interests, including the interests of U.S. industry.
The FCC also tries to promote good regulatory practices overseas. FCC maintains an
international visitors program which hosted more than 500 visitors from overseas in 2010. FCC hosts
Web forums to discuss current issues with foreign counterparts.
National Highway Traffic Safety Administration
The National Highway Traffic Safety Administration participates in international negotiations
regarding regulation of auto safety and fuel economy. In doing so, NHTSA has worked to promote a
science-based and data-based process in developing these standards. NHTSA has an Office of
International Policy, Fuel Economy and Consumer Programs, and also has an Assistant Chief Counsel for
Vehicle Rulemaking and Harmonization within the Office of Chief Counsel.
NHTSA staff have participated in development of global standards for vehicle safety, including
the 1998 Agreement for Global Technical Regulations for Auto Safety and Emissions. NHTSA has
developed new standards on emerging technologies such as electronic vehicle stability that have then
been adopted by international bodies.
NHTSA staff emphasized that the authorizing statute makes safety the overriding priority of the
agency, and there is no mention of regulatory alignment in the authorizing statute. Because failures in
vehicle safety are often immediately and gruesomely visible, the priority of the agency is to ensure the
highest level of safety – it is faulted for safety lapses but is given no credit for cost savings, especially
overseas.
Like others interviewed, NHTSA staff see a need for some mechanism for sustained involvement
of senior staff to pursue international coordination.
Securities and Exchange Commission
Given the cross-border nature of financial products and services, the Securities and Exchange
Commission Office of International Affairs is engaged with foreign counterparts in both regulation and
enforcement. The SEC Office of International Affairs has about 40 staff. It is divided into four areas:
international enforcement assistance, international regulatory policy, comparative law and regulation,
and international technical assistance.
DRAFT 10-19-2011

40

International Regulatory Cooperation
The SEC participates in international organizations including the International Organization of
Securities Commissions (IOSCO), the Financial Stability Board (FSB), the Council of Securities Regulators
of the Americas (COSRA) and the Financial Action Task Force (FATF). The SEC staff also has bilateral
exchanges with the European Securities Market Authority, the Japan Financial Services Agency, the
China Securities Regulatory Commission, the Korea Financial Supervisory Commission, the Securities and
Exchange Board of India, and the Capital Markets Board of Turkey, as well as regular discussions with
the UK Financial Services Authority and the Swiss Financial Market Supervisory Authority (FINMA).
Pursuant to Section 21(a)(2) of the Exchange Act, the SEC has the statutory authority to conduct
investigations on behalf of foreign securities regulators, and has reciprocal arrangements with
regulators in several countries. The enforcement assistance program processes approximately 1,000
requests for assistance annually, including approximately 600 requests to foreign agencies.
The SEC plays a leadership role in the International Organization of Securities Commission,
participates in the Financial Stability Board, and engages with investors, the financial services industry,
and other US financial regulators in connection with its work relating to IOSCO. To provide technical
expertise, the SEC Office of International Affairs also provides comparative law research on standards to
assist the Commission in developing domestic standards and provides technical advice to the US
Treasury Department and the United States Trade Representative in their roles as lead negotiators for
free trade agreements.
SEC’s Office of International Affairs also has a very active program to provide training and
technical assistance to foreign regulators. It conducts formal training and exchange programs and trains
more than 1,000 regulators per year.
Food and Drug Administration
The statutory regulatory focus of the Food and Drug Administration is domestic – protection and
promotion of public health in the United States. However, to accomplish this mission, the FDA has a
significant international operation, because of the globalization of supply chains and large quantity of
imports of food, drugs, cosmetics, and medical devices. While the FDA realizes that its actions have an
impact on the larger trade picture, the FDA’s authorizing statute states that its regulatory decisions must
be based only on safety, efficacy, and manufacturing quality – not costs, country of origin, or other
factors.78 Although the FDA has some cognizance of trade issues, they believe it is important to keep an
arms’-length relationship with trade promotion agencies, such as the U.S. Trade Representative, to
maintain their credibility as an independent, science-based regulatory agency with foreign counterparts.
The FDA works extensively with foreign agencies on alignment of technical and administrative
standards. In particular, the FDA and foreign counterparts collaborate on scientific and administrative
procedures for preclinical, clinical, and manufacturing testing of products. The goal is to develop
78

21 U.S.C. § 393(b)(2). See generally FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000).

DRAFT 10-19-2011

41

International Regulatory Cooperation
common data sets that will be accepted by most countries, from which each country can make its own
benefit-risk assessments. This may not necessarily produce the same final outcome in each jurisdiction,
since how to manage benefits and risks is often a cultural decision that must take into account tolerance
to various risks and how they can be managed within that jurisdiction’s legal and medical framework.
This approach – finding convergence on testing and data, rather than final regulatory decisions – can
help eliminate unnecessary regulatory divergences, while allowing divergences that result from different
judgments of national sovereignty.
The FDA believes there is great potential for cost savings and improved health and safety in
mutual reliance on the data from clinical trials and manufacturing quality inspection regimes in other
countries. For example, the FDA recently concluded a pilot project with European and Australian
regulators to inspect manufacturing plants in China and other countries that manufacture active
pharmaceutical ingredients.79 The agencies compared their lists of plants subject to inspection and the
resources that each country had available, and where two or more agencies were scheduled to visit the
same plant, the agencies agreed on one agency to inspect that plant or to do a joint inspection, and
reallocated resources so that they could cover more plants. Building on the success of that pilot, the
FDA is now pursuing a similar project with European regulators for site inspections of clinical trials.
Despite these successes, there is some hesitance in relying upon inspectional data from foreign
regulators, as it is unclear where accountability would lie if there were a failure in the system. Although
U.S. officials have views of which foreign country regulators are reliable, it is difficult to identify data or
outcome measures to support those perceptions.
Information sharing with foreign regulators is critical to the FDA’s ability to successfully
accomplish its domestic mandate, and the FDA has a robust program of confidential exchanges with
trusted foreign regulators. The FDA has confidentiality arrangements with approximately 50 different
foreign counterpart agencies (listed on the FDA Website). For example, the FDA engaged in several
thousand formal confidential exchanges with the European Medicines Agency in 2010. However, the
legal requirements regarding information sharing protocols are burdensome. The FDA has regulations in
place that allow it to share certain information with foreign agencies that can protect confidential
information to the same extent as it is protected in the United States, although under no circumstances
can the FDA share trade secrets.80 So information exchanges are possible, but require investment of
time and resources to review materials to determine what can and cannot be shared and redact
materials. This can be particularly wasteful when companies are submitting the same information to the
FDA and foreign regulators, but the agencies are limited in how they can exchange it.

79

EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.
80

21 C.F.R. § 2089.

DRAFT 10-19-2011

42

International Regulatory Cooperation
The FDA has extensive formal and informal exchange programs with foreign counterparts,
especially the European medicine and food safety agencies. There is an employee exchange program in
place between the FDA and its EU counterparts. There are permanent liaison officials from the
European Medicines Agency and the European Food Safety Authority who reside full time in the FDA,
and there are permanent, full time FDA liaison staff who likewise reside in the European Medicines
Agency and the European Food Safety Authority. The FDA’s Deputy Commissioner for International
Affairs reported that he communicates with one of his foreign counterparts on a daily basis. Until 2008,
the FDA did not have staff permanently stationed overseas. Since then, the FDA has received statutory
authorization and funding to establish permanent posts overseas in China, Europe, India, Latin America,
the Middle East, and sub-Saharan Africa.81

81

EU-US High-Level Regulatory Cooperation Forum, Report to the Transatlantic Economic Council, October 15,
2008, available at
http://www.whitehouse.gov/sites/default/files/omb/oira/irc/hlrcf_summary_report_october_2008.pdf.

DRAFT 10-19-2011

43