Crina Viju
Institute of European, Russian and Eurasian Studies
Carleton University
Outline
 Non-tariff barriers and their importance
 International regulatory cooperation
 Canada - EU historical regulatory cooperation;
 Regulatory approaches
 CETA: regulatory cooperation or convergence?
Non-tariff barriers
 Sanitary and Phytosanitary (SPS) and Technical
Barriers to Trade (TBT) measures:
 Regulations inhibit, restrict and eliminate trade
 Do they have a legitimate purpose?

Protect population from food safety hazards, from fraud
(falsely labelled products);
 Uruguay Round (1994): 2 distinct WTO sub-agreements:

Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS) and the Agreement on Technical Barriers to
Trade (TBT);
Non-tariff barriers (cont.)
 SPS:
 Science as justification for imposition of barriers to
trade;
 Major disagreements between Canada and the EU:


On science itself;
Science should be the sole factor in the establishment of SPS
import regulations?
 2 high profile SPS disputes since 1995:


EU import ban on Genetically Modified Organisms (GMOs);
EU import ban on beef produced using growth hormones.
Non-tariff barriers (cont.)
 TBT:
 Major contentious area: labelling requirements for
imports;
 Increased consumers’ interest regarding credence
attributes: animal welfare; child labour; use of GMOs;
environmentally friendly; use of pesticides;
 TBT agreement:

Import labels cannot be required on the basis of how a
product is produced (except when final product is discernibly
different);
 Other sectors: chemicals (labelling requirements and
EU REACH programme), car industry, pharmaceutical
(different approval times).
International regulatory cooperation
 Three principal forms (Young and Peterson, 2014):
 Approximation:

Align national rules;
 Negotiated mutual recognition:

Bilateral; specific regulations equivalent in effect; preserves regulatory
autonomy, equivalence of regulatory objectives;
 Mutual recognition agreements (MRAs):

Acceptance of differences in national standards; specified bodies in
each party can certify that products produced in its territory conform
to the standards of the other party;
 EU:
 Move away from negative top-down Commission-led regulatory
harmonization to mutual recognition with positive harmonization
of essential safety and performance requirement (Single Market).
 Regulatory capacity: by late 1990s, regulatory leader:

Active role of European standards-making bodies.
International Regulatory Cooperation (cont.)
 1996 Market Access Strategy:

“the completion of the single market regulatory regime now places the
Community in a position to pursue a more outward looking trade
policy in this field.”
 2006 Global Europe:

The EU “must play a leading role in sharing best practice and
developing global rules and standards.”
 “…making European norms the reference for global standards.”
 2007 European Commission: new trade agenda, deep FTAs with
strong regulatory component

“a combination of agreement on common principles, regulatory
dialogues, and flexible mechanisms to facilitate the resolution of
specific non-tariff barriers, increased regulatory transparency and
convergence towards EU or international standards, at least in
selected priority areas.”
International Regulatory Cooperation (cont.)
 Canada (following the US approach):
 Industry driven standards;
 Minimal government intervention: to assure consumer,
health and environmental safety;
 Science and risk-management based on US standards in
many areas;
 Preferential trade agreements:


Importance placed on mutually accepted standards,
regulations and conformity assessment process equivalence;
Obligation to provide justification if equivalence not granted;
 Federal structure: provinces important regulators.
Canada-EU Agreements
 1976:
 Bilateral Framework Agreement for Commercial and Economic
Cooperation: Joint Cooperation Committee
 Bilateral agreements for various trade issues, sectoral agreements and
bilateral “consultations” or “dialogues” for various sectors:
 1997: cooperation between customs administrators;
 1998: Mutual Recognition Agreement (MRA):

good manufacturing practices for pharmaceuticals and mandatory conformity
procedures in the following sectors: medical devices, tele-communications,
terminal equipment, information technology equipment and radio transmitters,
electrical safety, electromagnetic compatibility and recreational craft.
 1999: competition agreement (cooperation between Competition Bureau





Canada and the European Commission);
1999: Veterinary Agreement;
2003: Wine and Spirits Agreement;
2009: Civil Aviation Safety Agreement;
2009: Comprehensive Air Services Agreement;
2005: negotiations on a Trade and Investment Enhancement Agreement
(TIEA):

Regulatory cooperation, gov. procurement, financial services, IPR
CETA
 October 2008:
 Joint study: Assessing the Costs and Benefits of a Closer EUCanada Economic Partnership;
 Benefits:



0.08% increase in EU GDP;
0.77% increase in Canada GDP;
Assumption: Doha Round completed and successful.
 March 2009:
 Joint Report on the EU-Canada Scoping Exercise – main areas of
negotiations:

Trade in goods and services; investment; government procurement;
regulatory cooperation; intellectual property; temporary entry of
business people; competition policy; labour and environment.

NTB: regulatory divergence and technical regulation discrepancies
(Guerin and Napoli, 2009)
Non-tariff barriers
 Import licensing, customs valuation rules, pre-
shipment inspection, rules of origin, investment
measures
 Technical Barriers to Trade (TBT) in industrial sectors
and Sanitary and Phytosanitary (SPS) measures in
agriculture:
 Canadian perceptions: packaging, labelling, certification
(TBT) and health and safety standards (SPS);
 European perceptions: sanitary approval for foodstuffs,
regulations on spirits (i.e. SPS), labelling and packaging
requirements for products and differences in technical
and safety standards (TBTs). (Guerin and Napoli, 2008)
EU, new FTAs and regulatory cooperation
 EU’s new approach to regulatory cooperation:
 EU-South Korea (2011): equivalence based on
international standards (UN Economic Commission for
Europe); negotiated mutual recognition comprehensive
only in one sector (motor vehicles and parts); deeper
obligations for electronics, chemicals, pharmaceuticals;
 EU-Singapore (2013): “far-reaching liberalization” of
services markets; commitments from Singapore to
improve access to public procurement, reduce TBT in cars,
electronics and renewable energy; improved protection for
GIs;
 EU-Japan (>2013): to address Japanese regulatory barriers;
 EU-TTIP (>2013): sectoral negotiated mutual recognition
(except for agricultural sector).
CETA: What has been achieved?
 Chapter 6: TBT; Chapter 7: SPS; Chapter 26: Regulatory
Cooperation; Chapter 27: Conformity Assessment;
Chapter 29: Dialogues and Bilateral Cooperation;
 “Without limiting the ability of each party to carry out its
regulatory, legislative and policy activities, the Parties
commit themselves to further developing their regulatory
cooperation in light of their mutual interest in order to: (a)
prevent and eliminate unnecessary barriers to trade and
investment; (b) enhance the climate for competitiveness and
innovation, including through pursuing regulatory
compatibility, recognition of equivalence, and convergence;
and (c) promote transparent, efficient and effective
regulatory processes that better support public policy
objectives and fulfil the mandates of regulatory bodies,
including through the promotion of information exchange
and enhanced use of best practices. ”
CETA: What has been achieved?
 Regulatory cooperation activities on a voluntary basis;
 “recognizing the right of each Party to determine their
desired level of health, safety, environment, and consumer”;
 Explain why no initiation or withdrawal from cooperation;
 Ongoing bilateral discussions on regulatory governance;
 Sharing information, consult, sharing proposed regulations
that might have an impact on the other party at an early
stage;
 Regulatory Cooperation Forum:
 Setting for discussion, assist individual regulators, review
initiatives, encourage bilateral cooperation;
 Outside bodies to conduct assessments on product
standards:
 Parties have to accept decisions.
CETA: What has been achieved?
 Cooperation in motor vehicles regulations:
 International standards: on a voluntary basis;
 Cooperation in biotechnology:
 Shared objectives:

Exchanging information on policies, regulations and risk
assessment processes; promoting science-based approval
process; low level presence of GMOs; minimize adverse trade
impacts of regulatory practices.
 Chapter 24: Trade and Labour:
 ILO;
 Chapter 25: Trade and Environment.
CETA and regulatory cooperation
 Not achieving the high level of ambitions expressed
during the negotiations;
 However, can TBT and SPS barriers be removed
through trade agreements?
 Not really;
 CETA results in substantial progress by establishing
various institutional channels through which sectorspecific NTBs can be addressed over time;
 Elimination of small regulatory differences, double
testing, inspection procedures;
 Importance of Canada in the middle between the US
and the EU plus TTIP negotiations.