Regulatory Coherence and the Multilateral Trade System: Lessons from RTAs and Lessons to Promote Convergence

March 28, 2017

On March 28th, 2017, the International Centre for Trade and Sustainable Development (ICTSD) and the Inter-American Development Bank (IDB) organised a dialogue on “Regulatory Coherence and the Multilateral Trade System: Lessons from RTAs and Options to Promote Convergence” as part of the RTA Exchange dialogue series aimed at systematically exploring possibilities for convergence and coherence-building between regional trade agreements (RTAs) and the multilateral trade system. With the importance of tariffs declining because of autonomous liberalisation of RTA commitments, the policies that inhibit international trade flows are increasingly of a regulatory nature. Differences in objectives, implementation and enforcement in regulatory regimes may imply additional costs for foreign firms, particularly those from developing countries, desiring to enter global markets as they will need to satisfy regulatory norms in each country they operate in.


While the WTO includes some disciplines regarding regulatory policies, most notably in the area of mandatory product standards (SPS/TBT), most of the rules and mechanisms that determine how to collaborate on regulatory policies takes place outside the ambit of trade frameworks. In recent years however, innovative provisions and mechanisms to cooperate are increasingly integrated into modern deep integration agreements. While such cooperation might foster common standards or conformity assessment procedures that reduce transaction costs, some fear that the development of new standards in the context of such cooperation schemes might discriminate against third countries and non-parties and set the bar too high for poorer countries.


Taking into consideration this context, the objective of this dialogue is to analyse the role of trade agreements (particularly modern RTAs) in facilitating the various approaches to international regulatory cooperation and examine the tensions arising between RTAs and the multilateral trade system, and potentially amongst RTAs themselves.

Agenda: Link



Dialogue Report and Background Materials

The dialogue opened by mapping the different approaches through which regulatory cooperation is happening at the international level, assessing the role of trade agreements in these various approaches, and identifying some of the resultant cross-border externalities faced by key stakeholders, particularly in developing countries. The afternoon sessions then reviewed the development of innovative provisions and mechanisms for regulatory cooperation that are emerging from recent modern deep integration initiatives and considered what can be learned in order to promote new approaches at the multilateral level. Through this analysis, we aim to develop concrete policy recommendations of best practices which could be replicated and put forth specific ideas to be harvested for the multilateral trade system.


The Role of Regulatory Cooperation in the Future of the WTO

The emergence of global value chains (GVCs) and global public goods presents an opportunity for the World Trade Organization (WTO) to play a larger role in international regulatory cooperation. This paper identifies the circumstances and modalities where the WTO is most likely to be successful. First, it assesses the circumstances in which international regulatory cooperation is best suited to be multilateralised through the WTO. Second, it considers the means by which regulatory cooperation should be pursued at the multilateral level. In particular, it recommends a hub and spoke model for promoting regulatory cooperation and maintaining the transparency and democratic accountability of that mechanism.

Read Full Material: Link


Regulator Considerations: Leveraging Opportunities through Regulatory Cooperation

This paper examines the opportunity that regulatory cooperation provides to rationalise the array of overlapping international regulatory systems going forward, and the role that trade agreements can play to facilitate this occurring, particularly with regard to lessons learned from the Canada-US regulatory cooperation effort. In so doing, the paper outlines the context for cooperation between regulators, the important role for stakeholders, the approach to regulatory cooperation planning, and potential trade agreement implications.

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Bridging Distance for Development: Regulatory Cooperation Applied to Consumer Rights, Parcel Delivery and Sales Tax

This paper examines the need to encourage more widespread and inclusive participation of micro, small, and medium enterprises in global markets as a component of the Sustainable Development Goals. It puts forward recommendations on how international regulatory cooperation can take a central role in facilitating Internet-enabled trade.

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