bank notesEver since I read the European Commission’s proposal on regulatory cooperation I have been trying to figure out how this system will work in practice. One thing which intrigued me was the price tag for engaging in this kind of cross-Atlantic policy exchange. When asked about the resources needed to manage the regulatory cooperation mechanism proposed under TTIP, DG Trade seemed to think it wouldn’t be significant. Officials suggested that managing the Regulatory Cooperation Body, the ‘focal points’, the ‘requests for regulatory exchanges’, would not need a lot of resources (human, material or financial) to deliver the expected results.

 I find this hard to believe. Here are some reasons why:

  • DG Trade does not have a good track record when it comes to anticipating the implications of engaging with stakeholders. A good example is the ISDS (Investor to State Dispute Settlement) consultation which took place in 2014. Only a few dozen responses were expected – business as usual – but the results were overwhelming and led to major disruption of the negotiations and the need for an immediate reallocation of resources… disruptive at the very least. On controversial topics, trying to find an agreement with the US is likely to be time-consuming and require considerable staff resources.
  • As well as the Commission’s administrative task of running the Regulatory Cooperation Body, it is likely that the EU and national legislators will also be faced with an increased workload as a result of engagement with the US on an issue. These regulatory exchanges will require the involvement of other Commission services beyond DG Trade i.e. experts in charge of the technical files, as well as national authorities. This could end up taking away too many resources from their “domestic” mission.
  • There is a duplication of regulatory cooperation mechanisms in the trade agreements currently on the table, be it in CETA or TTIP. These involve a number of different parties, and different systems in the different treaties. Yet the EU still needs to manage requests for regulatory cooperation consistently. As the provisions agreed in the different treaties will not lead to identical regulatory cooperation schemes, the management of each of these schemes will need a specific set of detailed rules on procedures and different analytical tools – and thus resources.
  • DG Trade totally underestimates the size of the animal it is trying to create. As we have previously pointed out, we are concerned that these mechanisms will be used by corporate stakeholders to question existing legislation and to delay or water down new legislative proposals. The Commission, as the body responsible for regulatory cooperation, will face pressure from lobbyists who seek to persuade it to meet their demands. This will require time and manpower. DG Trade is not responsible for any domestic regulatory activity and therefore has not been submitted to the kind of lobby pressure other Commission services are confronted with. They should be aware that it can slow down or even block the system.

In the era of “Better Regulation” and “Impact Assessment”, it is incomprehensible that the impact of the TTIP proposal for regulatory cooperation has not been quantified in terms of management needs, both at an EU and at a national level. Surely this should be worked out precisely, so that the cost to tax payers can be fully assessed.

Regulatory cooperation could merit the use of public resources if it leads to a more effective exchange of information between regulators on food alerts or clinical trials for instance. Nevertheless, if regulatory cooperation is not done carefully, there is a risk that EU tax payers will end up financing a system which threatens to lower the very same protection standards that were supposed to protect them.

Posted by Monique Goyens