1. The Imperative for Fundamental Change in the North American Regulatory Paradigm - A Focus on Manufacturing and Production -
Robert Carberry
Carberry Insights and Associates Inc
Presentation to CAMPUT, Montreal, Quebec Jan 2018

2. This Presentation
Our Traditional Regulatory System and Approach
Manufacturing and Production Has Evolved
Realities for Regulators
The Canada-US Regulatory Cooperation Effort
Five Key Avenues to Pursue for Regulators
NAFTA

3. Our Traditional Regulatory System and Approach Was Appropriate….
Background
Post-WWII tariffs
GATT focus on tariffs
Led to a “domestic-centric” paradigm
Regulations focussed on domestic manufacturers
Designed for health and safety, but also to protect domestic markets and promote exports
regulatory system development flourished, barriers emerged
WTO in the 1980s
New disciplines – TBT/SPS for fair market access
Technical market access discussions
Now;
Tariffs removed
Most technical barriers addressed
…BUT, the external environment changed.

4. Manufacturing and Production Has Evolved
Globalization
Single country end to end sourcing and production increasingly rare
Firms focussed on production of a single product with access into multiple markets
Integration of supply chains
Canada and the US the most integrated economy in the world
40% of Canada-US border traffic is intra-firm
Manufacturers and retailers seeking supply chain assurances
Adoption of third party systems and standards that can be independently verified
Systems more advanced than those of government are emerging (e.g. trend analytics)
Advances in science and technology changes are outpacing regulator ability to keep up

5. Realities for Regulators……
New analytical tools are ready for use
Big data/trend analytics
Other Players are playing a greater role in ensuring safety and quality
Retailers, producers and manufacturers have better reach, better compliance leverage
Manufacturing and supply chain integration between countries is challenging domestic-centric regulatory approaches
Maintaining non-integrated regulatory systems in an integrated manufacturing environment = unnecessary cost, duplication
Manufacturing integration and market access is being hindered by regulatory systems
Third party systems and standards are more responsive, modern than those of government
Internally - current systems are straining resources and greater challenges are coming
Externally - the plea for regulatory burden reduction is increasing and is justified
…..the current regulatory system model and paradigm is dated, but opportunities exist.

6. Regulatory Cooperation….
Canada-US as initial priority – driven by PM/President commitment
Recognized the integration of the Canada-US economy (production, manufacturing, consumer markets) and the unnecessary costs and requirements impacting industry, consumers, government
First 5 years:
From a concept, to a pilot, to 100’s of initiatives
Not just the regulation per se, mostly implementation procedures (certificates, inspections, tests etc)
Demonstrated the lack of awareness of impact of two systems and opportunities in the system
Examples: Baby Seats, Lip Stick, Home Appliances
Introduction of a new partnership model and planning cycle
At its core, initiated a new language and nature of discussion between Canada-US Regulatory Agencies
Inclusions in TPP, CETA, expected in NAFTA, under discussion at OECD and WTO related bodies
…is increasingly seen as the next generation of market facilitation activity, but will be dependent on regulators

7. Five Key Avenues to Pursue for Regulators
Trend analytics
Complete the transition from inspect and detect TO safety and quality system verification TO predictive technologies
International Regulatory Cooperation
Rationalization and integration of regulatory systems
Exploit private-sector systems and standards
Leverage their expertise, recognize their contribution to health and safety outcomes
Exploit power of manufacturers and retailers on the supply-chain
Leverage their reach, compliance effectiveness
Shift from a “domestic-centric” paradigm - consider domestic regulations as an integral part of a larger international regulatory system
Increase awareness of manufacturing and market trends to identify potential regulatory partners

8. NAFTA Canada’s single most important trade agreement
2nd generation – should be to advance the regional partnership to an unprecedented level – not revisit – bring new ideas to bear and aspirations
Context is not Canada vs US vs Mexico, should be as partners facing an increasingly complex international marketplace
So far we’ve been “Trumped” by ourselves, not Trump. All 3 countries efforts disappointing
There are still options
Canada needs to seed a compelling agenda
infuse the debate with the notions of shared North American interests and the collective potential that drove us toward the NAFTA in the first place
Keep discussions alive – it’s not just cancel or sign in the spring – these are equally disappointing given nature of content to this point

9. Questions