Plan needed to improve regulatory co-ordination

A new report from the Conference Board of Canada calls for Canada to adopt a plan tailored to specific sectors and focusing on key trading partners to improve regulatory coordination.

January 27, 2011   by PLANT STAFF

OTTAWA: A new report from the Conference Board of Canada calls for Canada to adopt a plan tailored to specific sectors and focusing on key trading partners to improve regulatory coordination.

Using mobile phone chargers as an example, the Conference Board noted until recently they didn’t require standardized technology, but an agreement between the European Union and manufacturers of mobile carriers has eliminated these differences for European consumers.

The Ottawa-based research group says Canada has much to gain from similar regulatory coordination with trading partners, but little progress has been made.

“Persistent differences between national standards – many of which so inconsequential that they are essentially meaningless – interfere with the movement of goods, services, capital, and people,” said Kathleen Macmillan, author of Regulatory Cooperation: A Practical Action Plan, published for the Conference Board’s International Trade and Investment Centre.

She says Canada’s best chance for success lies in a practical plan of cooperative self-interest, drawing on the successful experiences of the Australia and New Zealand Trans Tasman Mutual Recognition Arrangement, the European Union and other accords.

The Conference Board recommends focusing on countries with similar objectives for health, safety and environmental protection and the capacity to oversee and enforce regulations, such as the US and EU. Although there are a number of sectors where closer regulatory alignment with the US makes sense, the report acknowledges domestic political concerns on both sides of the border will likely make a comprehensive agreement difficult to achieve.

Australia and New Zealand have negotiated their own Trans-Tasman Mutual Recognition Arrangement, and these countries would also be a good fit for common-sense regulatory cooperation with Canada.

Priorities for Canada should include:

• Agriculture and food. This sector not only has the highest proportion of technical barriers to trade, but consumer and animal health and safety would be well-served by closer cross-border coordination of standards;

• Transportation (trucking). Alignment here would improve trade in the transportation industry and in the sectors that ship goods via truck; and

• Motor vehicles. Although motor vehicle manufacturing is integrated in North America, Canada and the US maintain separate safety and operating regulations.  Most merely create inefficiencies; but an exception for distinct Canadian regulations might be, for example, measures to ensure that vehicles can start in cold weather.

Other sectors that the Conference Board identifies as potential beneficiaries of greater regulatory coordination are R&D intensive sectors (such as biotechnology, and information and communications technologies), therapeutic drugs and professional licencing.

A broad range of options for coordination exist from fully harmonized standards to joint assessments and information sharing among separate regulatory agencies. Where differences are inconsequential or pose little risk to Canadians’ health or well-being, Canada could simply adopt foreign standards.

Canada could also work with other jurisdiction to harmonize standards or recognize the equivalence of other countries’ regulations (mutual recognition). Maintaining unique regulations should be a rare exception, and the onus should be on Canadian regulators to justify distinct standards.

Finally, provinces and territories should redouble their efforts to eliminate internal regulatory differences.

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