With the Trump administration poised to submit its United States-Mexico-Canada Agreement (USMCA or New NAFTA) to Congress, IATP has teamed up with corporate and trade policy watchdog groups in Canada and Europe to expose the dark history of the regulatory cooperation provisions that comprise much of that agreement. The report, International Regulatory Cooperation and the Public Good, details how transnational corporations have used earlier versions of regulatory cooperation to weaken standards for rail safety, workplace hazard labeling and risk assessment of chemicals used in sunscreens. Under the guise of “harmonizing” regulations between countries to speed up trade and limit “unnecessary” costs, regulatory cooperation has provided a forum for multinational business interests to influence government regulators in secretive committees that largely exclude consumer, environmental and other civil society representatives.
The report shows that, right now, these corporate interests are deeply involved in regulatory cooperation lobbying to convince Canada and the European Union to cut back on consumer and environmental protections. These activities have already had an impact. As the report states, “Delays in removing known toxics, carcinogens, bio-accumulative products and endocrine disruptors from consumer products can be blamed in part on regulatory capture, but also result from pressure to harmonize measures across borders so as not to interrupt profitable supply chains and trade flows.”
While not entirely a new phenomenon—informal discussions between U.S. and Canadian regulators were formalized in the years following implementation of the original NAFTA—the renewed focus on behind-the-scenes discussions between corporations and government officials in recent trade deals represents a shift in tactics. As the report states, “What corporate lobby groups would like most is a means—preferably an enforceable one—of pre-empting, forestalling or weakening pro-consumer or pro-environment policies and regulations before they are ever implemented, avoiding the need to later challenge them at the WTO as burdensome trade barriers.” Even though regulatory cooperation activities are often billed as voluntary, the report found that they undermine the democratic process and give corporations preferred access to regulators: “As practiced in North America, voluntary regulatory cooperation has been much less transparent and accessible to NGOs and academics, or even elected officials, than it has for industry lobbyists.”
As IATP has reported, corporate lobbyists aren’t waiting for ratification of the New NAFTA to attempt to use its regulatory cooperation provisions to eliminate port of entry inspections of imported meat, prevent hazard labeling of explosive grain dust or weaken controls of ozone-depleting gasses that contribute to climate change. Regulatory cooperation also figures heavily in recently initiated trade talks between the Trump administration and the EU, where both governments have indicated that food safety standards could be on the menu. European consumer advocates are already raising alarms about the regulatory focus of these trade negotiations. Monique Goyens, Director General of European Consumer Organization BEUC, said of the talks, “The EU should be very careful and not create an instrument of good regulatory practices that could backfire on its ability to regulate in the public interest. A trade agreement is not the appropriate tool to define how our decision-making processes such as impact assessments or legislative reviews should be conducted.”
As civil society and elected officials on both sides of the Atlantic evaluate the pros and cons of the New NAFTA and negotiations between U.S. and EU officials, they should carefully review the cautionary history of regulatory cooperation detailed in this comprehensive new report.
Note – The report International Regulatory Cooperation and the Public Good was written by Stuart Trew and published by the organizations Canadian Centre for Policy Alternatives and PowerShift. In addition to IATP, the report was co-published by Bund für Umwelt und Naturschutz Deutschland, Corporate European Observatory, LobbyControl, The Centre for Research on Multinational Corporations, and the Transnational Institute.