1 REDUCING TRADE BARRIERS THROUGH GOOD REGULATORY PRACTICE FOR STANDARDS AND TECHNICAL REQUIREMENTS by Anthony Kleitz Acting Deputy Director Trade Directorate, OECD

2 Introduction When standards hinder trade: Supply-side solutions: TA/CB may help exporters meet standards and participate in future standard-setting; Demand-side solutions: GRP by governments strengthens confidence and predictability. Regulation responds primarily to domestic concerns For GRP, one size does not fit all; This presentation will focus on: I. Four widely accepted principles of GRP for TBTs; II. Two additional priority areas for strengthening GRP.

3 I.Four accepted principles of GRP I.A. Priority to objectives rather than methods -- Use of voluntary rather than mandatory measures Simpler to define and implement; Encourages innovation, efficiency, flexibility in production and sourcing; Is business- and trade-friendly in a globalised economy; Exception to trend: High health or safety risks call for mandatory government measures; –yet lower risks may encourage voluntary private sector standards. -- Performance-based standards preferred over product or production requirements.

4 I.B. Transparency in the development and application of standards & CA -- Public availability of information: regular publication, enquiry points; internet. -- Rule-making procedures: clear definitions, consistent application, predictability. -- Public consultations: Openness to all stakeholders (industry, consumers, regulators), fending off regulatory capture; Accountability in handling comments, enhancing credibility and compliance). Q:How to ensure that transparency really works?

5 I.C. Effective impact assessments Consider whether regulation is needed; Identify alternative solutions; Analyse costs and benefits of regulations in terms of economic performance and cost-effectiveness; Make effective use of risk assessment and risk management; Assess effects on trade, investment, international competition; Assess enforcement mechanisms; Monitor quality of the evaluation process.

6 I.D. National and international co-operation among regulatory authorities Principles of GRP must be adaptable to different national contexts; Problems from regulatory differences can be reduced through co-operation among regulatory authorities, enhancing policy coherence and regulatory efficiency; Sharing of experiences and efforts to better align approaches nationally and internationally can simplify and clarify procedures for traders and enhance their efficiency and competitiveness.

7 I.D. National and international co-operation among regulatory authorities (cont.) Variety of bodies setting and implementing regulations: –governmental (ministries, semi-independent & independent agencies; shared responsibilities between different levels); –private (generally open to all interested stakeholders); –multilateral, plurilateral, regional: Current WTO process: Discussions in TBT Committee, DDA; Substance: proposals on GRP for “minimum consultation standards”, “common regulatory objectives”, sectors. Q: Should current international disciplines on standards and CA be strengthened by co-ordinating approaches to good regulatory design and behaviour?

8 II. Additional priority areas for strengthening GRP II.A. Demonstrating compliance with national regulations Techniques for accepting foreign measures as functionally equivalent to domestic measures that have the same regulatory objectives (as provided for in WTO/ TBT & SPS Agreements): –Unilateral acceptance: clear definition of criteria for acceptance; –MRAs (government-to-government, government-to-private, private- to-private); –Development of domestic capacity in CA (facilities, training & accreditation).

9 II.A. Demonstrating compliance with national regulations (cont.) Supplier’s declaration of conformity: –A recurrent item of discussion in WTO/TBT; –Relies on firms’ integrity, mutual trust between regulators and firms, and effective systems of product liability and market surveillance in the supplying country. –Practical evidence suggests that it is not easy to replace third-party CA by SDoC and that progress has been slow.

10 II. Additional priority areas for strengthening GRP (cont.) II.B. Necessity In WTO, a key issue for standards and CA is to ensure they are not more trade restrictive than necessary; This is specified in the TBT and SPS Agreements, but the exact nature of this obligation is vague. Q: Does this vagueness pose a problem and, if so, what can be done about it?

11 BIBLIOGRAPHY / ADDITIONAL READING APEC-OECD Integrated Checklist on Regulatory Reform (OECD 2005). Integrating Market Openness into the Regulatory Process: Emerging Patterns in OECD Countries TD/TC/WP(2002)25/FINAL (OECD 2003). OECD Guiding Principles for Regulatory Quality and Performance (OECD 2005). Regulatory Reform and Market Openness: Understanding the Links to Enhance Economic Performance TD/TC/WP( /FINAL (OECD 2004). Standards and Conformity Assessment in Trade: Minimising Barriers and Maximising Benefits (Compilation of submissions at OECD-InWent workshop and policy dialogue, Berlin, November 2005) Thank you! For further information please contact