U.S. and Canada Sign Agreement on Regulatory Cooperation

Susan Dudley
By Susan E. Dudley
June 06, 2018

Despite the unfortunate recent tariffs President Trump has imposed on Canada (as well as other U.S. allies), a new agreement confirms that our neighbor to the north remains one of our closest trading partners.  A Memorandum of Understanding (MOU) signed last week between the Treasury Board of Canada and the U.S. Office of Information and Regulatory Affairs reaffirms the Canada-United States Regulatory Cooperation Council (RCC), which was formed in 2011. Created as a bilateral forum for U.S. and Canadian regulators with health, safety, and environmental protection mandates, the RCC’s goal is to reduce unnecessary differences between the two countries’ regulatory frameworks.

This is important because unnecessary regulatory differences between countries can erect persistent barriers to trade that are less obvious than traditional barriers. The RCC recognizes that the U.S. and Canada may take different regulatory actions according to their national laws & sovereign policies, but encourages consideration of each other’s policies when developing or modifying regulations, with a goal of fostering alignment when appropriate and feasible. It commits to prioritize “economic growth, innovation, competitiveness, and job creation ...while maintaining high levels of protection for health, safety, and the environment.” It recognizes the importance good regulatory practices to effective cooperation. 

Regulatory cooperation can also lead to improved health and safety outcomes for the public—increasing public benefits while reducing or maintaining costs. For example, U.S. and Canadian transportation regulators worked together to develop uniform disability parking permit standards, thereby allowing citizens to travel more freely across borders.

According to the MOU, the RCC’s mandate is to:

  1. serve as a forum to discuss, coordinate, and provide broad guidance on regulatory cooperation initiatives between Canada and the U.S.;
  2. conduct senior-level discussions to proactively identify and discuss challenges, opportunities, and lessons learned regarding Canada-U.S. regulatory cooperation;
  3. identify opportunities to bring significant economic benefits to both countries through increased regulatory alignment within key existing and emerging sectors of the North American economy;
  4. help resolve existing unnecessary divergences and develop mechanisms to facilitate and secure future alignment based on transparency and early engagement between countries and with stakeholders; and
  5. design new regulatory activities with the goal of achieving regulatory alignment, to the extent feasible and appropriate.

The RCC intends to give particular consideration to: 1

  1. sectors that are characterized by high levels of integration and a history of cooperative regulatory approaches and supporting activities;
  2. sectors that have well developed pre-existing regulatory frameworks that are designed to achieve similar outcomes but are currently a barrier to increased integration and activity;
  3. sectors that offer significant, emerging growth potential and that are characterized by rapidly evolving technologies where regulatory approaches are anticipated or are currently in early stages of development; and
  4. sectors where regulatory cooperation are intended to support export growth in North America.

The Council is co-chaired by the Administrator of the Office of Information and Regulatory Affairs (OIRA) in the U.S. and the Secretary of the Treasury Board in Canada and will meet at least once a year. Senior officials from regulatory departments and agencies will also be involved “to provide insights and experiences on departmental, agency and sectoral trends, opportunities and challenges, and to champion regulatory cooperation and RCC initiatives within their respective departments and agencies.” Stakeholders are invited to engage with the RCC through its members, stakeholder forums (intended to be held every two years), and traditional venues (including responding to regulatory notices in the US Federal Register and Canada Gazette).

The GW Regulatory Studies Center has studied and written about ways the U.S. can improve international competitiveness by reducing regulatory barriers to trade and consulted with regulators in the U.S., Canada, and elsewhere. This research will continue to be valuable as the RCC carries on its important work.