Transatlantic Approaches to Agriculture Policy: Transatlantic Agriculture & Regulation Working Paper Series: No. 3

US and EU trade
by Susan E. Dudley, Lydia Holmes, Daniel R. Pérez, Aryamala Prasad & Zhoudan Xie
October 04, 2017

Produced via a cooperative agreement sponsored by The United States Department of Agriculture

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Abstract

As part of a cooperative agreement with the United States Department of Agriculture (USDA), the George Washington University Regulatory Studies Center produced a five-chapter report on regulatory differences between the United States (U.S.) and the European Union (EU) and their effects on agricultural production and productivity. Those chapters are published here as a working paper series with five parts. This chapter reviews the institutions and procedures governing regulatory development in the U.S. and EU, details several notable differences in their respective regulatory approaches towards agriculture, and then presents and compares relevant regulations affecting agricultural production in each jurisdiction. It first provides an overview of the U.S. and EU procedures for developing and implementing regulation and how they differ. It then describes how the jurisdictions approach regulation of the agricultural sector. Finally, it discusses five areas of agricultural policy: (i) agri-environmental regulations, (ii) organic farming, (iii) genetically modified organisms (GMO), (iv) pesticides, and (v) fertilizers. The regulations discussed are initiated at the EU level and the U.S. federal level. The roles of member states (in the EU) and states (in the U.S) are outlined wherever applicable, but a complete accounting of the effects of implementation and enforcement present at this level falls outside the scope of this paper.

Regulatory Procedures in the U.S. and EU

Overview of U.S. Regulatory Procedure

The United States and the European Union regulate agriculture in substantively different ways, but both emphasize reducing risks to health and the environment. In the U.S., Executive branch departments and agencies write federal regulations pursuant to authority delegated to them by statutes passed by the two houses of congress and signed by the president. Regulations are constrained by a) authorizing statutory language, b) executive principles for regulatory impact analysis (RIA),[1] and c) procedural rules regarding consideration of public comment.[2] Generally, under the Administrative Procedure Act of 1946, agencies must solicit and consider public comment on draft regulations before they are issued in final form. Once regulations become effective after final publication, it is generally the issuing regulatory agency that is responsible for monitoring and enforcing compliance.[3]

The legislative branch, comprising the U.S. Senate and the House of Representatives, generally passes broad legislation and delegates to regulatory agencies the power to “fill up the details” by issuing regulation.[4] While legislators can provide oversight over regulatory development (e.g., through hearings, letters and budget restrictions), Congress does not have a role in approving new regulations.[5],[6]

While some federal statutes, such as the Clean Air Act, envision a role for states in compliance and enforcement, they usually provide federal agencies (e.g., EPA) authority to ensure that their standards are met. Affected parties may seek redress from the judicial branch on final regulations, and courts often remand them to agencies for reconsideration. Judicial review looks to the administrative record developed by the regulating agency,[7] including its analysis of the facts and its response to public comment.[8] Thus, the administrative record, which includes all supporting documentation and public comment, is an important element of accountability and transparency.[9]

Overview of EU Regulatory Procedure

In the EU, the European Commission initially drafts legislative acts (comparable to statutory law in the U.S.), and then the political bodies, the European Parliament and European Council, vote to approve them. In practice, these institutions consult informally to reach a policy consensus. The Commission generally must provide an impact assessment (IA) and consult the public and stakeholders before submitting a proposed legislative act to the Parliament and Council.[10],[11]

EU member states are involved through the comitology process, and provide a counterweight to the supranational-oriented Commission. With few exceptions, the Commission is not responsible for implementing EU law; implementation and enforcement are delegated to the member states and their bureaucracies, although the Commission is in charge of overseeing the implementation process.[12] Judicial review is not as important in the EU as in the U.S.

Similarities and Differences

In the U.S., executive branch agencies, accountable to the President, develop and implement regulation pursuant to rulemaking powers delegated by Congress (via legislation). In the EU, regulation is a process driven by the executive (EU Commission) but ultimately decided by the Council and the Parliament. Rulemaking powers are delegated to the European Commission rather than to regulatory agencies. Independent expert bodies such as the European Committee for Standardization and the European Telecommunications Standards Institute provide input on technical regulation under broad policy principles defined at EU level.

Stakeholder consultation is an important element of both regimes, however, the mode, timing, and role of consultation differ. In the U.S., consultation is a means of gathering input and increasing the accountability of delegated agency rulemaking to the public. It allows interested parties to voice concerns, and has a long tradition of transparency concerning procedures and the role of comments in decision making and in judicial review. Both regulatory text and supporting analysis are available for review and comment.

In the EU, consultation is a means of gathering input and evidence that politically accountable decision-makers will use to assess policy options. Stakeholder input is solicited earlier in the rulemaking process to develop and support the IA and identify options, but is generally not invited on the IA or regulatory text.

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[1]    Executive Order 12866 “Regulatory Planning and Review.” September 30, 1993 https://www.reginfo.gov/public/jsp/Utilities/EO_12866.pdf and Executive Order 13563 “Improving Regulation and Regulatory Review.” January 18, 2011 https://www.reginfo.gov/public/jsp/Utilities/EO_13563.pdf

[2]    Administrative Procedure Act (5 U.S.C. Subchapter II) https://www.archives.gov/federal-register/laws/administrative-procedure

[3]    Dudley, S., & Wegrich, K. (2015). Achieving Regulatory Policy Objectives: An Overview and Comparison of U.S. and EU Procedures. The George Washington University Regulatory Studies Center, Working Paper March 2015. Retrieved from https://regulatorystudies.columbian.gwu.edu/achieving-regulatory-policy-objectives-overview-and-comparison-us-and-eu-procedures

[4]    Wayman v. Southard, 10 Wheat. (23 U.S.) 1, 41 (1825). https://supreme.justia.com/cases/federal/us/23/1/case.html

[5]    It has a mechanism for overturning individual regulations, though it is typically only used after presidential transitions. 

[6]    Dudley, S. (2015). Improving Regulatory Accountability: Lessons from the Past and Prospects for the Future. Case Western Reserve Law Review, 65 (4), 1027-1057. Retrieved from http://regulatorystudies.columbian.gwu.edu/improving-regulatory-accountability-lessons-past-and-prospects-future

[7]    Administrative Procedure Act (5 U.S.C. Subchapter II) section 706 http://www.archives.gov/federalregister/laws/administrative-procedure/

[8]    Parker and Alemanno point out that while this encourages agencies to develop a full and robust record to defend the rule in court, ironically, it may constrain agencies’ ability to take international trade impacts into consideration if the enabling statute does not mention those factors. Parker, R., & Alemanno, A. (2014). Towards Effective Regulatory Cooperation under TTIP: A Comparative Overview of the EU and US Legislative and Regulatory Systems. Brussels: European Commission.

[9]    Dudley, S., & Brito, J. (2012). Regulation: A Primer, 2nd ed. (pp. 48-50). Washington, D.C.: The George Washington University Regulatory Studies Center and the Mercatus Center at George Mason University.

[10]   Dudley and Wegrich (2015)

[11]   It has increasingly conducted IA and public consultation for non-legislative acts, as well.

[12]   For more detail, see Dudley and Wegrich (2015 pp. 28).