Obama Administration Issues Memorandum Regarding Export and Trade Promotion, Public Participation, and Rulemaking

The Office of the U.S. Trade Representative (USTR) and the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) issued a May 19, 2011, memorandum to U.S. departments and agencies to highlight the importance of regulatory transparency and openness to promoting international trade. The memorandum is important as it telegraphs the growing importance of trade considerations in domestic regulatory issues, and the Administration’s renewed emphasis on the significant role international collaboration has in domestic policy development.

The memorandum states that reducing unnecessary regulatory barriers to exports and trade will promote economic growth, entrepreneurship, job creation, and innovation. The memorandum describes several existing agency obligations that can reduce barriers to trade and contribute to economic objectives, such as economic growth, entrepreneurship, job creation, and innovation. These obligations include: conducting robust regulatory analysis; avoiding the creation of unnecessary barriers to trade; providing domestic and foreign stakeholders a meaningful opportunity to participate in the rulemaking process; and encouraging international collaboration. The memorandum is available online.Regulatory Analysis

The memorandum notes that Executive Order (EO) 13563 (Improving Regulation and Regulatory Review), EO 12866 (Regulatory Planning and Review), and OMB Circular A-4 (Regulatory Analysis) establish principles governing regulatory analysis. For economically significant rules, agencies are directed by EOs 13563 and 12866 to analyze and, to the extent feasible, to quantify the costs and benefits of proposed regulatory actions. The memorandum states that, in some cases, such costs and benefits can have impacts on productivity, employment, and the ability of small- and medium-sized enterprises (SME) to participate in the global economy, and competitiveness. According to the memorandum, where any such effects, including significant adverse effects on the ability of American companies to compete in domestic and foreign markets, are reasonably anticipated, agencies should provide a publicly accessible assessment.Trade Agreements Act of 1979

The memorandum reminds agencies that under the Trade Agreements Act of 1979, as amended by the Uruguay Round Agreements Act, federal agencies are prohibited “from engaging in ‘any standards-related activity that creates unnecessary obstacles to the foreign commerce of the United States.'” One way for agencies to avoid creating such unnecessary obstacles is to consider relevant international standards.Openness and Participation in the Rulemaking Process

The memorandum states that, under EO 13563, each agency “shall endeavor to provide the public with an opportunity to participate in the regulatory process,” including the opportunity to comment through the Internet on any proposed regulation. To the extent feasible and permitted by law, each agency shall also provide timely online access to the rulemaking docket on http://www.regulations.gov, including relevant scientific and technical findings. For proposed rules, such access shall include an opportunity for comment on all pertinent parts of the rulemaking docket, including relevant scientific and technical findings.

Consistent with EO 13563, federal agencies should provide the public with timely access to regulatory analyses and supporting documents, as well as meaningful opportunities for comment. To that end, the memorandum states, agencies should provide a description of the methods used in their analysis; should publish information online; and, to the extent feasible, should provide the public with the underlying data in downloadable format. Public access via the Internet ensures that rules, analyses, and supporting documents are available to, and allow comment by, both domestic and foreign stakeholders, thus promoting exports and trade.

In addition, the memorandum notes, the World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT Agreement) requires the U.S. and other WTO members to notify the WTO of certain draft product standards and related procedures for comment by other WTO members. To fulfill this requirement, the U.S. TBT Inquiry Point, which is housed in the National Institute of Standards and Technology, undertakes the day-to-day notification functions of the United States.Encouraging International Collaboration

To implement these existing requirements, and help ensure that regulatory actions do not create unnecessary barriers to exports and trade, agencies have also adopted, in certain cases, collaborative practices for economically significant rules with potential trade implications. These practices have included and should be considered (to the extent appropriate and consistent with domestic law):

• Information exchanges, dialogues, or meetings with other governments;
• Information exchanges, dialogues, or meetings with interested stakeholders, including SMEs, in other countries;
• Coordination of regulatory activities with other governments;
• Participation in efforts to share best practices and to harmonize relevant regulatory approaches, standards, and related procedures, as well as consideration of such efforts in the development of regulatory measures; and
• Consideration of regulatory schedules that allow for sufficient time to consider regulatory approaches in other countries, as well as relevant developments in international, regional, and other fora.

According to the memorandum, these practices can help reduce regulatory costs while also promoting U.S. exports and trade by reducing unnecessary regulatory divergences, which impose costs on U.S. exporters, especially SMEs. Efforts of this kind can promote job creation and support export goals. Collaborative efforts — including, inter alia, regulator-to-regulator dialogue, information exchange, mutual recognition arrangements, and similar initiatives — could have many domestic benefits, including increasing the safety and quality of other countries’ exports to the U.S. and thus helping to protect U.S. consumers.

The memorandum encourages agencies to consult with USTR as part of their rulemaking processes. The memorandum states: “Both OIRA and USTR look forward to working cooperatively with you and your staff to promote the goals of public participation and open government in the context of international regulatory cooperation.”Observations

Long-pending trade agreements have started to be taken up and approved in the current Congress, in contrast to essentially languishing during the first two years of the Obama Administration. Partly this is a response to the desire by all in Congress to focus on “jobs, jobs, jobs” while allowing the Administration to insist on improved environmental and labor protection provisions compared to terms negotiated by the Bush Administration. Changes to these agreements, along with the present memorandum on Export and Trade Promotion, signal that international trade will be cited as an achievement in the President’s re-election bid, while allowing some level of bipartisanship in moving some of the newly energized priorities of the Republican majority in the House of Representatives.