"Better regulation can facilitate trade" (OECD)

OECD (Regulatory Policy Committee) work on International Regulatory Cooperation (IRC) has taken a big step forward with the organisation of a one-day joint workshop with the Trade Committee to investigate how sound regulatory policy could enhance the quality and effectiveness of trade agreements. It was also the first time that the newish community of regulatory experts formally joined forces with the Trade pundits to tap the potential of a synergy between the two bodies of expertise.

In the morning delegates heard a series of presentations (including one from A. Alemanno who recently wrote on the TTIP negotiations) researching how trade barriers related to regulatory heterogeneity could weigh down the desirable development of international commerce and thus impede growth. The afternoon session (chaired by your blogger) featured six national cases of successful experience with IRC mechanisms in support of trade policies and FTA negotiations. The closing session, chaired by the UK delegation, outlined a future programme of work that would substantiate the conclusion (formulated by F.van Tongeren from OECD) that "Better Regulation can facilitate trade." No doubt official proceedings will soon be made available on the IRC and Trade pages of the OECD site.

Background. Recent OECD work on Global Value Chains has provided a strong reminder of the importance of reducing protectionist measures, improving inefficient and unnecessary customs and other border procedures, and reducing the cost of ‘behind the border’ measures that constrain trade in goods and services. In particular, regulatory misalignment, both in policy formulation and application, increases the costs facing firms operating internationally and holds back growth and job-creation. The OECD publication "IRC: addressing global challenges" makes the point that IRC is intensifying but there are also concerns that multilateral and regional trade deals could lead to a weakening of legitimate domestic regulations. Achieving regulatory and policy objectives in an increasingly globalised world while respecting the need for openness internationally can be a challenge for governments.