THE TIME HAS COME FOR CANADA TO ADOPT A PRACTICAL PLAN TO IMPROVE REGULATORY COORDINATION

www.conferenceboard.ca

OTTAWA, Jan. 24 /CNW/ - Regulatory coordination is of little interest for most citizens —until they try to charge their mobile phones with a borrowed charger or with one left over from previous models. Until recently, chargers did not require standardized technology - an agreement between the European Union and manufacturers of mobile carriers has eliminated these differences for European consumers.

Adopting common regulations governing mobile phone chargers is one practical example where different standards among nations and products have been overcome for the benefit of consumers. As a relatively small economy, Canada has much to gain from similar regulatory coordination with trading partners, but little progress has been made.

A new Conference Board of Canada report argues that a practical plan - tailored to specific sectors and focusing on key trading partners - is the best approach to obtain the benefits of regulatory cooperation.

"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, (http://www.conferenceboard.ca/e-library/abstract.aspx?did=3963) published for the Conference Board's International Trade and Investment Centre (http://www.conferenceboard.ca/ITIC/default.aspx).

"Proponents of increased international cooperation and coordination are not calling for an end to regulation, but for greater predictability and uniformity in the measures that do apply. 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."

In seeking partners, Canada should concentrate on countries with similar objectives for health, safety and environmental protection and the capacity to oversee and enforce regulations, such as the United States and European Union. There are a number of sectors where closer regulatory alignment with the United States makes sense.  However, 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.

Canada should set priority sectors and industries for regulatory alignment where the greatest economic advantages are found. These 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 United States maintain separate safety and operating regulations.  Most merely create inefficiencies; that said, a notable and justifiable exception for distinct Canadian regulations might be measures to ensure that vehicles can start in cold weather.

Other sectors which 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.

The International Trade and Investment Centre is intended to help Canadian leaders better understand what global economic dynamics —such as global and regional supply chains, barriers to trade, U.S. policies, or tighter border security—could mean for public policies and business strategies.

SOURCE CONFERENCE BOARD OF CANADA

For further information:

Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext.  448
E-mail: corpcomm@conferenceboard.ca

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