U.S. Wants More Transparency in Trade

New memorandum focuses on encouraging trade, coordination and public participation.

By Lynn Bergeson, Regulatory Editor

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On May 19, 2011, the Office of the U.S. Trade Representative (USTR) and the Office of Information and Regulatory Affairs (OIRA) jointly issued a memorandum to U.S. departments and agencies highlighting the importance of regulatory transparency and openness to promoting international trade. The memorandum telegraphs the Administration’s renewed emphasis on the significant role international collaboration has in domestic policy development.

Better agency collaboration could help promote job creation and support export goals.

The communication builds upon President Obama’s January 2009 Memorandum on Transparency and Open Government and the December 2009 Open Government Directive from the Office of Management and Budget (OMB). It describes several existing agency obligations that can reduce barriers to trade and contribute to economic objectives, such as economic growth, entrepreneurship, job creation and innovation. These obligations include: conducting robust regulatory analysis, avoiding the creation of unnecessary barriers to trade, providing domestic and foreign stakeholders a meaningful opportunity to participate in the rulemaking process, and encouraging international collaboration. The memorandum is available at www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-23.pdf.

The memorandum notes that Executive Order (EO) 13563, EO 12866, and OMB Circular A-4 all establish principles governing regulatory analysis. For economically significant rules, agencies are directed by EOs 13563 and 12866 to analyze and, to the extent feasible, quantify the costs and benefits of proposed regulatory actions. The memorandum states that, in some cases, such costs and benefits can impact productivity, employment, and the ability of small- and medium-sized enterprises (SME) to participate and compete in the global economy. Where any such effects are reasonably anticipated, agencies should provide a publicly accessible assessment.

The memorandum also reminds agencies that under the Trade Agreements Act of 1979, they are prohibited “from engaging in ‘any standards-related activity that creates unnecessary obstacles to the foreign commerce of the United States.’” One way to avoid creating such unnecessary obstacles is to consider relevant international standards.

Transparency and International Collaboration
Consistent with EO 13563, federal agencies should provide the public with timely access to regulatory analyses and supporting documents, as well as opportunities to comment. To that end, the memorandum states agencies should provide a description of the methods used in their analysis; publish information online; and, to the extent feasible, provide the underlying data in downloadable format.

Public access via the Internet ensures that rules, analyses, and supporting documents are available to, and allow comment by, both domestic and foreign stakeholders, thus promoting exports and trade.

In addition, the memorandum notes the World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT Agreement) requires the U.S. and other member states to notify the WTO of certain draft product standards and related procedures for comment by other members. To fulfill this requirement, the U.S. TBT Inquiry Point, which is housed in the National Institute of Standards and Technology, undertakes the day-to-day notification functions of the United States.

To implement these existing requirements, and help ensure regulatory actions don't create unnecessary barriers to exports and trade, agencies have adopted, in certain cases, collaborative practices to discuss and evaluate potential trade implications. These include information exchanges, dialogues, meetings with other governments and stakeholders; and coordination of regulatory activities with other governments. The goal is to share best practices and harmonize relevant regulatory approaches, standards, and related procedures, and that these efforts contribute to the development of regulatory measures.

These practices can help reduce regulatory costs while also promoting U.S. exports and trade by decreasing unnecessary regulatory divergences, which impose costs on U.S. exporters — especially SMEs. This can help promote job creation and support export goals. These collaborative efforts could have many domestic benefits, including increasing the safety and quality of other countries’ exports to the U.S. and thus helping to protect U.S. consumers.

Discussion
Long-pending trade agreements are being addressed and approved in the current Congress, in contrast to languishing during the first two years of the Obama Administration. The memorandum is, in part, a response to the desire by all in Congress to focus on jobs, while allowing the Administration to improve environmental and labor protection provisions.


Lynn L. Bergeson is Chemical Processing's Regulatory Editor. You can e-mail her at Lbergeson@putman.net.

Lynn is managing director of Bergeson & Campbell, P.C., a Washington, D.C.-based law firm that concentrates on chemical industry issues. The views expressed herein are solely those of the author. This column is not intended to provide, nor should be construed as, legal advice.

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