Reducing Red Tape: Regulatory Reform Goes International

Over the past year, the Federal Government has been working to implement President Obama’s directions for a 21st-century regulatory system, which he described in Executive Order 13563, “Improving Regulation and Regulatory Review.”  Executive Order 13563 requires U.S. regulators, to the extent permitted by law, to select approaches that maximize net benefits; choose the least burdensome alternative; increase public participation in the rulemaking process; design rules that are simpler and more flexible, and that provide freedom of choice; and base regulations on sound science. Executive Order 13563 also calls for an ambitious, government-wide “lookback” at existing rules, with the central goal of eliminating outdated requirements and unjustified costs.

Today, President Obama has built on Executive Order 13563 by signing a historic Executive Order on Promoting International Regulatory Cooperation.  The new Executive Order will promote American exports, economic growth, and job creation by helping to eliminate unnecessary regulatory differences between the United States and other countries and by making sure that we do not create new ones.  

As I discuss in an op-ed in today’s Wall Street Journal, the order makes clear that in eliminating such differences, we will respect domestic law and will not compromise U.S. priorities and prerogatives. Even while insisting on those priorities and prerogatives, we can eliminate pointless red tape. Today’s global economy relies on supply chains that cross national borders (sometimes more than once), and different regulatory requirements in different countries can significantly increase costs for companies doing business abroad. As the President’s Jobs Council recently noted, international regulatory cooperation canreduce these costs and help American businesses access foreign markets.  Such cooperation can also help U.S. regulators more effectively protect the environment and the health and safety of the American people. 

Today’s Executive Order calls for, among other things, an interagency working group, chaired by OMB’s Office of Information and Regulatory Affairs, to provide a forum to foster greater cooperation and coordination of U.S. Government strategies, including those for promoting regulatory transparency, sound regulatory practices, and U.S. regulatory approaches abroad.  Today’s Order also requires Federal agencies, as part of the President’s retrospective review initiative under Executive Order 13563, to consider regulatory reforms that eliminate unnecessary differences between the United States and its major trading partners.

As we work with other governments to tackle unnecessary differences in regulation, we must continue to protect the environment and the health and safety of Americans. Today’s Executive Order emphasizes this point while reaffirming the primacy of domestic law and national prerogatives. 

The new Executive Order will build on work that is already underway. We have started close to home, with President Obama launching Regulatory Cooperation Councils with Prime Minister Harper of Canada and President Calderon of Mexico. The Councils are implementing work plans to eliminate or prevent the creation of unnecessary regulatory differences that adversely affect cross-border trade; to streamline regulatory requirements; and to promote greater certainty for the general public and businesses, particularly small- and medium-sized enterprises, in the regulation of food, pharmaceuticals, nanotechnology, and other areas. The United Statesand Canada released the United States-Canada Regulatory Cooperation Council (RCC) Joint Action Plan last December. In February, we announced the United States-Mexico High-Level Regulatory Cooperation Council (HLRCC) Work Plan. 

I invite you to review both plans and provide your thoughts and ideas on how we can reduce red tape and unjustified costs by increasing regulatory cooperation, in North America and beyond.  Just email us at international-oira@omb.eop.gov.  The ideas we have received from the public have helped shape our efforts to date, and continued public engagement will help ensure that we make meaningful progress in the years to come.

Cass Sunstein is the Administrator of the Office of Information and Regulatory Affairs.