APEC-OECD CO-OPERATIVE INITIATIVE ON REGULATORY REFORM February 2001 Experience and best practices in achieving regulatory efficiency and open markets Session 1, Panel 4 Presentation by Anthony Kleitz Trade Directorate, OECD, Paris

I. INTRODUCTION A. INTERRELATIONS BETWEEN TRADE AND DOMESTIC REGULATION trade barriers increasingly obviousPast progress in tariff liberalisation makes regulatory trade barriers increasingly obvious To draw full benefit from trade liberalisation, regulatory reform becomes necessary. Obligations in the multilateral trading system may entail commitments to regulatory reform. To be successful, regulatory reform must take account of the trade and investment impact of regulations.

B. OBJECTIVES OF THIS PRESENTATION Consider a conceptual framework developed for assessing trade friendliness of domestic regulations; Examine “best practices” with respect to transparency.

SIX “PRINCIPLES OF EFFICIENT REGULATION” II. SIX “PRINCIPLES OF EFFICIENT REGULATION”  Have been identified by the OECD Trade Committee to assess the implications of regulatory practice for market openness.  Already underpin the WTO, especially the TBT/SPS Agreements and the GATS.  Are interrelated.

A.The six “Principles of efficient regulation”:  Transparency;  Non-discrimination;  Avoidance of unnecessary trade restrictiveness;  Use of international standards;  Recognition of equivalent foreign measures; and  Use of competition principles.

Political and institutional environment of Government-sponsored reform B. Political and institutional environment of Government-sponsored reform  Dialogue with range of stakeholders:  trade liberalisation vs. social objectives;  Dialogue between developed and developing countries;  Domestic good governance vs. multilateral rule-making;  Role of the new economy.

III. TRANSPARENCY A. BENEFITS OF TRANSPARENCY FOR MARKET ACCESS AND DOMESTIC EFFICIENCY  Makes public aware of costs and benefits to national welfare;  Provides business with predictable conditions;  Reduces discretionary or arbitrary implementation;  Facilitates assessment of undue trade restrictiveness;  HOWEVER there may be domestic sensitivity in giving foreigners a voice.

B. SOMEBEST PRACTICES FOR REGULATORY TRANSPARENCY 1. Prior consultation What it involves:  Public announcement of consultation procedures, of a proposed regulation and of comments received;  Non-discrimination between domestic and foreign parties;  Non-discretion among the parties to be consulted. Benefits:  Ensures equality of treatment for stakeholders;  Allows a fuller assessment of stakeholders’ views;  Provides stakeholders with a better perspective on future regulations.

B.SOME BEST PRACTICES FOR REGULATORY TRANSPARENCY 2. Regulatory Impact Analysis (RIA)  Consideration of the purpose of a regulation, its impact and possible alternatives;  Rationale is to ensure adoption of regulations that are efficient;  Trend toward increasing public involvement and more transparent RIA procedures;  RIAs may be a heavy administrative burden for some countries; a lighter alternative could be to publish the rationale for a regulation.

B. SOME BEST PRACTICES FOR REGULATORY TRANSPARENCY 3. Enquiry points and comprehensive codes of regulations  Enquiry point requirements already exist under SPS Agreement and GATS;  Websites are effective for providing information and permitting enquiries;  Importance of ensuring availability of information about sub- federal regulations.

B. SOME BEST PRACTICES FOR REGULATORY TRANSPARENCY 4. Clear administrative procedures  Publication of objective criteria for judging requests;  Standard time periods for decisions;  Explanations when requests are denied;  Independent regulatory bodies; etc.

IV.CONCLUDING REMARKS  Based on the GATT/WTO system, the "principles of efficient regulation" seem broadly relevant for all countries.  Our understanding of them is evolving, recognising that situations differ among countries and sectors. levels.  "Best practices" identified are worth consideration, at both the national and multilateral levels. APEC-OECD Co-operative Initiative can be important in advancing understanding.APEC-OECD Co-operative Initiative can be important in advancing understanding.