Challenges and Opportunities for Regulatory Cooperation Across the Atlantic

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Regulatory policies and practices that are not excessively burdensome can not only facilitate economic growth and public welfare within countries, but they can support international trade and investment. Recognizing this, the Transatlantic Trade and Investment Partnership (T-TIP) between the EU and the U.S. aims to be a comprehensive trade agreement that significantly expands trade and investment between the United States and the EU as well as addressing global issues of common concern.

The success of T-TIP depends on strengthening EU-U.S. regulatory coherence, and reducing regulatory barriers to transatlantic trade and investment. Not only can poorly designed or conflicting regulations inhibit transatlantic trade and investment, but differences in regulatory policy and procedural approaches may continue to challenge economic partnerships between the EU and U.S. In particular, procedural differences in how regulations are analyzed, developed, and enforced must be understood if regulatory cooperation is to be achieved.

The aim of a recent working paper by Susan Dudley (George Washington University) and Kai Wegrich (Hertie School of Governance) is to provide a descriptive analysis of procedural differences in regulatory development between the United States and the European Union to serve as a factual basis for understanding the regulatory challenges and opportunities for transatlantic trade.

The analysis reveals that regulatory policies and procedures in the U.S. and EU are governed by different institutions and influenced by different cultures and circumstances, yet they both recognize the importance of a transparent regulatory framework that promotes the public interest. While both the U.S. and EU are committed to these objectives in principle, the two jurisdictions’ regulatory procedures differ, and these objectives are often met in different ways at different times. While some of these differences are inherent in the different constitutional foundations of the EU and U.S., making direct procedural alignment unlikely, there may be opportunities for greater regulatory coherence and mutual recognition. In particular, the renewed emphasis in both jurisdictions on retrospective review may offer opportunities for the transatlantic dialogue. As governments improve their ability to evaluate the effects of their regulations, including effects on international trade and investment, doors may open to alternatives that minimize regulatory burdens and regulatory barriers.

The full paper is available here.

(Fabrizio Di Mascio)