Policy Options Paper

Regulatory Cooperation: Lessons from the WTO and the World Trade Regime

January 2016

Trade friction today is largely due to regulatory diversity as contemporary markets are chiefly segmented through non-tariff barriers. The purpose of the paper is to enquire into regulatory cooperation and coherence in the context of the world trade regime. It examines the challenges arising from regulatory diversity and considers mechanisms and approaches that could be taken to reduce regulatory barriers and costs to trade. Following an assessment of how countries are currently pursuing regulatory cooperation in the context of preferential, plurilateral and multilateral initiatives, with the Agreement on Technical Barriers to Trade and the Agreement on Sanitary and Phytosanitary Measures under the aegis of the WTO adopted as the baseline, a set of options for policies and international trade rules that will enhance regulatory cooperation are put forward. The main recommendations concern transparency in the formulation of policies, the interaction between affected parties when preparing and adopting regulatory measures that could impact on trade, and the establishment of fora where these discussions and commitments may take place. The options are divided into two categories: institutional and substantive. The former is dedicated to issues attendant to participation, while the latter is concerned with improving existing obligations and developing new mechanisms for cooperation. The paper acknowledges that developing countries with a limited administrative apparatus may find some of the options difficult to implement, and thus underscores the need for capacity building. It concludes that a mechanism of “reasoned transparency” will bring the trade and regulatory communities together, which should become one of the pillars of the WTO. The organisation should add a function akin to an Information Exchange regime covering all forms of regulatory cooperation.

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