Unbiased Safety Through Procedural Safeguards in TTIP
Regulatory divergences between the US and EU present costly non-tariff barriers to trade, and meaningful change to the status quo requires long-term commitment to making structural changes. There are many currently existing legal instruments that can serve as models in order to preserve a predictable and evidence-based regulatory science process that is both safe and transparent.
Transatlantic Trade and Investment Partnership (TTIP) negotiations have endeavored to reduce unnecessary EU-US regulatory divergences resulting in costly nontariff barriers to trade. These efforts acknowledge that such divergences are attributable to factors such as the lack of common constitutional, legislative, and regulatory frameworks, a persistent inability to reach political consensus on technical regulations, standards, and conformity assessment procedures, and differing cultural preferences for environment, health and safety standards that appear to the other trading partner as disguised protectionism. TTIP negotiating parties appreciate that meaningful reconciliation leading to regulatory harmonization will require long-term EU and US commitments to implementing structural changes in their respective regulatory systems.
To avoid the political challenges that an agreement on a horizontal program of substantive regulatory harmonization would entail, the European Commission, the United States Trade Representative, and outside observers such as the Swedish National Board of Trade, have called for a less ambitious sector-by-sector approach of regulatory convergence. This piecemeal approach, as well, has raised fears and suspicions among US and European parliamentary, environmental and consumer groups, such as the EU Green Party and Transatlantic Consumer Dialogue ("TACD"). They are afraid that downward harmonization and/or convergence of transatlantic regulations will ensue, undoing the effects of Europe's precautionary principle and resulting in substantive food safety, public health and environmental standards that are significantly less "safe" than current (EU) standards. These accusations, however, are hard to substantiate given the broad recognition that the EU and US already have in place strong environmental, health and consumer safety protections, although specific standards may differ. Explanations for such EU-US differences in the stringency and timing of regulatory restrictions can be found in the emphasis of risk perception and social amplification of risk in lieu of actual risk, an emphasis on values that are threatened by new technologies, the determination of net regulatory benefits via new social costing methods, and random or unrelated political constellations harboring multiple forms of cognitive bias.
Prospects for regulatory convergence can be enhanced through incorporation of procedures that ensure rigorous objective peer review of scientific assessments with potentially significant economic impacts, risk evaluation protocols, and open and transparent public participation and government accountability mechanisms designed to circumscribe the rulemaking processes applicable to both goods and services. Erroneously, stakeholders have opposed proposals to incorporate such procedures into horizontal chapters of the TTIP.
The TACD and CIVITAS have argued, for example, that corporate interests have perverted long-established government notice and comment procedures originally intended to facilitate public participation in the regulatory science process, such as those imposed on federal agencies by the US Administrative Procedure Act ("APA"), on EU Member States by the 1998 EU Notification Directive, and on World Trade Organization members by the Technical Barriers to Trade Agreement. It is claimed that since these procedures minimize public input and control in favor of determinations by unelected technical experts, and thereby further exacerbate Europe's democratic deficit, they are inadequate to protect the right-to-know and other participatory interests of EU and US citizens. The question is whether they are right. According to groups such as TACD, perceived technocracy and dominance of "science over democracy" lend too much weight to causation-based quantitative risk assessment, strength-of-the-evidence criteria, and cost-benefit analysis. Consequently, the economic cost-benefit analyses that US federal agencies must perform for economically significant regulations, and the regulatory impact assessments that Commission guidelines oblige EU Member States to undertake if legislative proposals are likely to have significant direct economic, social or environmental impacts, can no longer ensure a high level of environmental, health and safety protection.
Although in some cases their diagnosis is accurate, the remedies these groups prescribe are counter-productive. To create a predictable and evidence-based regulatory science process, the quality and objectivity of regulation-supporting scientific assessments, and the reliability of risk evaluation protocols and cost-benefit analyses are critically important; and it must be assured that governmental authorities will implement these procedural mechanisms properly. Indeed, these procedures provide the best guarantee that science-based regulations can promote public safety and protect consumer and citizen rights and interests on both sides of the Atlantic.
There are plenty of existing legal instruments that provide examples for a TTIP regime of good administrative procedures. The EU principle of transparency and the US Freedom of Information Act establish access to information regimes that could be incorporated into TTIP to ensure that substantive rules are applied consistently and that exemptions to disclosure are justified. EU-style public consultation and stakeholder dialogue, rather than US style "notice and comment," offers a good public participation model for TTIP. Furthermore, the US Information Quality Act ("IQA") and binding Office of Management and Budget implementing guidelines provide a useful model of how rigorous peer view by qualified experts demonstrably certified as impartial, independent and free of apparent and actual conflicts-of-interest, can help to improve the quality and objectivity of highly influential scientific assessments underlying regulatory actions and to prevent unnecessary compliance burdens from arising due to federal agency cherry-picking of scientific information on ideological grounds. Cost-benefit analyses, as required by White House Executive Order 12866 and Circular A-4, and increasingly used by the European Commission, is another vital element of the TTIP regime. Lastly, consistent with the US APA and IQA, interested and affected parties should have a right under TTIP to seek adequate administrative and judicial review of the methodological bases for regulation-supporting scientific assessments prepared by authorities of the other trading partner in risk-focused evidentiary proceedings. If these components are included in TTIP, both EU and US consumers and citizens will benefit.
Lawrence Kogan is managing principal of The Kogan Law Group, P.C., New York, NY, and chief executive of the Princeton, NJ-based nonprofit Institute for Trade, Standards and Sustainable Development. Lucas Bergkamp is a lawyer, medical doctor and a partner at Hunton & Williams, Brussels, Belgium.
This article was published in the second of three theme weeks for our project "TTIP: Myths vs Reality". An introduction of the articles for the week can be found here, and introductions of the other two weeks can be found at the top of the TTIP Forum.