In this report by the National Board of Trade Sweden, we identify best practices for international regulatory cooperation to address technical barriers to trade (TBTs) and highlight how they can promote sustainability objectives. Linda Bodén, one of the authors of the report, tells more.
What is the background to analysing international regulatory cooperation in this context?
Being a Swedish government agency, our analyses are often focused on EU and its trading partners. By looking at free trade agreements (FTAs) where the EU is not a party we aimed to learn more about how trading partners across the world have committed to regulatory cooperation to eliminate TBTs and to see how we can learn from each other.
We have analysed chapters in FTAs on good regulatory practice and regulatory cooperation, technical barriers to trade (TBT), transparency, as well as sectoral chapters and annexes in 14 FTAs worldwide. By doing this, we could identify useful mechanisms.
How does international regulatory cooperation on TBT measures connect to sustainability objectives?
international regulatory cooperation within the area of TBT offer opportunities to promote sustainability objectives and facilitate a green transition for trading partners, regardless of their level of economic development. That is the beauty of regulatory cooperation on TBT measures; it facilitates the green transition and eliminates trade barriers at the same time.
What are your conclusions?
We conclude that a number of mechanisms would be beneficial to include in ambitious regulatory cooperation initiatives to prevent TBTs. These also offer significant opportunities to promote sustainable development goals. However, such opportunities currently appear to be underutilised in free trade agreements. The report therefore recommends that sustainability should be prioritised in regulatory cooperation chapters.
For example, mechanisms in the area of mutual recognition and harmonisation could focus on products that are important for sustainable development in order to facilitate trade in such products. Moreover, provisions on regulatory impact assessment (RIAs) could make it mandatory for free trade agreement partners to consider sustainability issues when developing regulatory impact assessments.
In order to ensure that regulatory cooperation leads to higher standards related to environmental, social and economic sustainability, free trade agreements could, to a greater extent, outline sustainability as a goal of regulatory cooperation as well as agreeing not to lower standards.
By identifying the best regulatory mechanisms in the various free trade agreements, we have collected this smorgasbord of what we believe are the best regulatory cooperation approaches.
Elements of an all-star regulatory cooperation chapter
General for all categories
- Reaffirm the commitments of the WTO TBT Agreement.
- Include sustainability as an objective for regulatory cooperation and also sustainability-related aspects in relevant mechanisms, as exemplified below.
- Notify also technical regulations that are in accordance with international standards.
- Include more information about the regulations in the notifications, such as information on alternative approaches being considered.
- Specify the time period for comments and that comments received must be replied to in writing.
- Translate notified technical regulations.
Good regulatory practices and regulatory impact assessments
- Encourage the development and use of RIAs, specifically RIAs that include an assessment of the effects for SMEs, the impact on trade and sustainability aspects. If the context permits, make commitments on RIAs binding.
- Choice of mechanism will be largely dependent on the context and existing level of cooperation and trust between the parties.
- Where the context permits, the most far-reaching commitments would be to recognise the technical regulations of the other party and allow goods accepted in one party to also be sold in the territory of the other trading partner.
- List organisations considered to develop international standards.