Regulatory Reform

Overview

Since 1980 the “regulatory state” in the United States has grown enormously, whether measured by the sheer number of new federal regulations, the number of staff employed by federal regulatory agencies, the costs imposed on small businesses, or the national economic burdens of “major” rules—those that typically cost society more than $100 million in compliance costs. The complexities of the modern regulatory state are amplified by the proliferation of state and local regulations, sometimes without any coordination with federal regulations. Internationally, U.S. regulations are often different than regulations issued in Europe or in other parts of the world, which gives rise to concerns about nontariff barriers to trade and the use of regulation for protectionist purposes.

The solution to the growing “regulatory state” will often be more nuanced than deregulation, since federal regulatory programs have reaped significant benefits for the American people: civil rights, safer prescription drugs, clean air and water, and better food safety information for consumers.  The term “regulatory reform” refers to a growing intellectual and political movement, both in the U.S. and abroad, to design a better, smarter, and more efficient regulatory system. The focus is sometimes on fixing the flaws in specific regulatory programs but often the focus is on improvements in the processes used to develop, implement, enforce and evaluate regulatory programs.  

The mission of the Working Group on Regulatory Reform at the O’Neill School is to bring new evidence, methods, and insights to the public debate on regulatory reform. The O’Neill Working Group has a special interest in the application of analytic tools (risk assessment, cost-effectiveness analysis, and benefit-cost analysis) in the regulatory process. We also have a strong interest in the comparison of regulatory activities in different countries, both through document reviews and expert interviews. 

Our Group is comprised of faculty members, post-doctoral fellows, students, and others, and we welcome inquiries from practitioners and scholars from other organizations who might wish to join our efforts or visit the O’Neill School.  For example, during 2016-17 we hosted the former Hungarian Minister of the Environment Zoltan Illes, who offered interesting perspectives on European approaches to environmental regulation.  

Working Research Group

D G

Associate Professor

Phone:
(812) 855-1468
Email:
good@iu.edu
K K

Professor; Faculty Affiliate, Ostrom Workshop

Phone:
(812) 855-0492
Email:
krutilla@iu.edu
A T

Professor

Phone:
(812) 855-0563
Email:
trananh@iu.edu

All testimonies are by John D. Graham unless otherwise noted:

  • Comment on “Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances” to the EPA, by Arthur Fraas, John D. Graham, Kerry Krutilla, Randall Lutter, Jason Shogren, W. Kip Viscusi1
    (February 13, 2023)
  • Testimony on “Midterm Review and an Update on the Corporate Average Fuel Economy Program and Greenhouse Gas Emissions Standards for Motor Vehicles,” before the Subcommittee on Commerce, Manufacturing, and Trade and the Subcommittee on Energy and Power, U.S. House of Representatives, Washington D.C. (September 22, 2016)
  • Testimony on “Proposed Cres-Staffing Rule,” Federal Railroad Association, Docket No.” FRA-2014-0033, before the U.S. Department of Transportation, Washington, D.C. (July 15, 2016)
  • Testimony on “The Federal Government on Autopilot: Delegation of Regulatory Authority to an Unaccountable Bureaucracy,” before the Committee on the Judiciary, U.S. House of Representatives, Washington, D.C.  (May 24, 2016)
  • Testimony on “Moving to a Stronger Economy through Regulatory Budgeting,” before Senate Budget Committee, U.S. Senate, Washington, D.C. (December 9, 2015)
  • Testimony on “Surface Transportation Reauthorization: Performance, not Prescription,” before the Subcommittee on Surface Transportation, Committee on Commerce, United States Senate, Washington, D.C. (March 24, 2015)
  • Testimony on “Examining Federal Rulemaking Challenges and Areas of Improvement Within the Existing Regulatory Process,” before the Subcommittee on Regulatory Affairs and Federal Management, Committee on Homeland Security and Governmental Affairs, United States Senate, Washington, D.C. (March 19, 2015)
  • Testimony on “The First Step to Cutting Red Tape: Better Analysis” before the Committee on Science, Space and Technology, Secret Science Reform Act of 2014, U.S. House of Representatives, Washington, D.C. (April 30, 2014)
  • Testimony on “Regulatory Aspects of Trans-Atlantic Trade and Investment Partnership (TTIP),” before the U.S.-EU Free Trade Agreement, Committee on Trade, European Parliament, Brussels, Belgium (October 14, 2013)
  • Testimony on “Office of Information and Regulatory Affairs: Federal Regulations and Regulatory Reform under the Obama Administration,” before the at the OMB-OIRA Oversight Hearing, Committee on the Judiciary, House of Representatives, United States Congress (March 21, 2012)
  • Testimony on “How a Broken Process Leads to Flawed Regulations,” before the OMB-OIRA Oversight Hearing, Committee on Oversight and Government Reform, House of Representatives, United States Congress (September 14, 2011)
  • Testimony on “Cost-Justifying Regulations: Protecting Jobs and the Economy by Presidential and Judicial Review of Costs and Benefits,” before the Subcommittee on Courts, Commercial and Administrative Law, House Judiciary Committee, U.S. Congress (May 4, 2011)
  • Testimony on S. 981, “Regulatory Improvement Act of 1997,” before the Committee on Governmental Affairs, U.S. Senate, Washington D.C., 105th Congress, First Session (September 12, 1997)
  • Testimony on S. 123, S. 229, S. 333, and S. 343, “Impacts of Regulatory Reform on Environmental  Law,” before the Committee on Environment and Public Works, U. S. Senate, Washington, D.C., 104th Congress, First Session (March 22, 1995)
  • Testimony on Title III, H.R. 9, “Risk Assessment and Cost-Benefit Analysis of New Regulations,” before the Committee on Science, U. S. House of Representatives, Washington, D.C., 104th Congress, First Session (January 31, 1995)
  • Testimony on Title III, H.R. 9, “Risk Assessment and Cost-Benefit Analysis of New Regulations,” before the Committee on Commerce, U. S. House of Representatives, Washington, D.C., 104th Congress, First Session (February 2, 1995)
  • Testimony on S. 291, “Regulatory Reform Act of 1995,” before the Governmental Affairs Committee, U. S. Senate, Washington, D.C., 104th Congress, First Session (February 15, 1995)
  • Testimony on “Reform of the Delaney Clause,” before the Subcommittee on Department Operations and Nutrition, Committee on Agriculture, U. S. House of Representatives, Washington, D.C., 103rd Congress, First Session (July 14, 1993)
  • Testimony on “Reform of the Delaney Clause,” before the Joint Hearing, House Subcommittee on Health and Environment and Senate Committee on Labor and Human Resources, Washington, D.C., 103rd Congress, First Session (September 21, 1993)
  • Testimony on “The Role of Risk Analysis in Environmental Policy Making,” before the Committee on Energy and Natural Resources, U. S. Senate, Washington, D.C., 103rd Congress, Second Session (November 9, 1993)
  • "Why a national carbon tax is smart policy: SPEA dean outlines benefits in new book" - IU Newsroom, June 12, 2017
  • "IU School of Public and Environmental Affairs dean testifies at Senate hearing on regulatory budget" - IU Newsroom, December 9, 2015

November 3-4, 2022: Annual Meeting of the European Society for Benefit-Cost Analysis Society, Paris School of Economics

  • Kerry Krutilla, "Expanding the Growth Theoretic Foundations of the Ramsey Discounting Formula"

March 17-18, 2022: Society of Benefit Cost Analysis Annual Meeting, George Washington University, Washington D.C.

  • Kerry Krutilla, "The Limitations of the Ramsey Discounting Rule for Climate Policymaking"

October 10, 2016: China Council for International Cooperation on Environment and Development, Beijing

  • Kerry Krutilla, “Theory, Methods and Practices of Benefit Cost Analysis in the United States: A Case Study in PM2.5 Policy Analysis.” Sponsored by the Environmental Defense Fund.

June 22-25, 2016: Annual Conference of the European Association of Environmental and Resource Economists, Zurich, Switzerland

  • Katie Fledderman, David Good, John Graham, and Kerry Krutilla, “The effect of differential fine particle toxicity on the economic evaluation of air pollution regulations”

March 16-18, 2016: Eighth Annual Conference and Meeting of the Society for Benefit-Cost Analysis, Washington, D.C.

  • Kerry Krutilla, Gabriel Piña, David H. Good, and John D. Graham, “Benefit cost analysis of lifesaving regulations from the department of transportation”
  • Alexander Alexeev and Kerry Krutilla, “Strategic benefit cost analysis for security threats”

December 6-10, 2015: Society for Risk Analysis Annual Meeting, Crystal City, Virginia

  • Alexander Alexeev and Kerry Krutilla, “Benefit cost analysis in a strategic and risky environment”
  • Katherine Fledderman, David H. Good, Kerry Krutilla, and John D. Graham, “An uncertainty analysis of recent air regulations”

November 12-14, 2015: APPAM 37th Annual Fall Research Conference, Miami, Florida

  • Gabriel Piña, Kerry Krutilla, David H. Good, and John D. Graham, “Benefit cost analysis of federal transportation safety regulations”

September 15-18, 2015: IEEE 18th International Conference, Canary Islands, Spain

  • David Good, Kerry Krutilla, Stanley Chien, Lingxi Li, Yaobin Chen, “Preliminary benefit analysis for pedestrian crash imminent braking systems,” Intelligent Transportation Systems

June 24-27, 2015: Annual Conference of the European Association of Environmental and Resource Economists, Helsinki, Finland

  • Kerry Krutilla, David H. Good, and John D. Graham, “Uncertainty in the Cost-Effectiveness of Federal Air Quality Regulations”
  • Kerry Krutilla and Alexander Alexeev, “Rent-Seeking in Environmental Policy Making: Is the Expected Surplus Dissipated”

June 15-17, 2015: Workshop sponsored by the Science and Technology Section of NATO: “Cyber Attack Detection, Forensics, and Attribution for Assessment of Mission Impact,” Istanbul, Turkey

  • Alexander Alexeev and Kerry Krutilla. Cyber-Attack as a Contest Game: Modeling the Economic Impact.

March 19-20, 2015: Seventh Annual Conference and Meeting of the Society for Benefit-Cost Analysis, Washington, D.C.

  • Kerry Krutilla and Gabriel Piña, “Using Kaldor-Hicks Tableaus in Regulatory Impact Assessment”
  • December 2014: Society for Risk Analysis
  • December 2014:Southern Economic Association
  • March 2014: Society for Benefit Cost Analysis
  • March 2014: Public Choice Society
  • “Fracking Governance: History, Differences and Trends,” (John D Graham, John A Rupp), Environmental Impacts from the Development of Unconventional Oil and Gas Reserves, 79-102, (eds, J.F. Stolz, W.M. Griffin, DJ Bain), Cambridge University Press. Cambridge, UK (2022)

  •  “Regulatory Reform, Benefit-Cost Analysis, and the Poor,” (John D. Graham), The Regulatory Review, University of Pennsylvania, (March 2022)

  • "Incorporating Environmental Justice into Benefit-Cost Analysis of Federal Rulemakings,"(John D. Graham,  University of Richmond Public Interest Law Review, 25(3) 149 (2022)

  • “Reforming Circular A-4, Memos to the New OIRA Administrator,” (Graham, John D.), Regulation, 45 (Spring 2022)

  • Fifty Years at the US Environmental Protection Agency: Progress, Retrenchment, Opportunities, (James Barnes, John D. Graham, David Konisky (eds)), Rowman and Littlefield, (2021)

  • “The Benefits and Costs of Automobile Regulations for Low-Income Americans,” (Kylie Conrad, John D. Graham), Journal of Benefit-Cost Analysis, 12(3) 518-549, (Fall 2021)

  • “The Ascendency of the Cost-Benefit State?" (Paul R Noe, John D Graham),  Administrative Law Review/ACCORD, 5: 85-151, (Winter 2020)

  • “Book review, Potter, Rachel Augustine, ‘Bending the Rules: Procedural Politicking in the Bureaucracy,’ Chicago, IL: University of Chicago Press, 2019,” (Graham, John D.), 244 pp in Presidential Studies Quarterly, 50(1) 232-233 (2019)

  • “Trump's Deregulation: Is It Working?” (Keith B Belton, John D. Graham), Administrative Law Review, 71(4) 803-880 (2019)

  • “Does Dynamic Federalism Yield Compatible Policies? A Study of Federal and State Vehicle Standards,” (Siddiki, Saba, Carley, Sanya, Zirogiannis, Nikolaos, Duncan, Denvil, Graham, John D.), Policy Design and Practice, 1(3) 215-232, (2018)

  • “Industrial Chemical Regulation in the European Union and the United States: A Comparison of REACH & the amended TSCA,” (Botos, Agnes, Graham, John D., Illes, Zoltan), Journal of Risk Research, (April 23, 2018)

  •  “A Smart Regulatory Process for Entrepreneurs and Small Businesses,” (Williams, Anna M., Belton, Keith B., Graham, John D.), Commissioned by the American Council on Capital Formation (ACCF), Washington, D.C., (February 2017)

  • “Consumer’s Guide to Regulatory Impact Analysis: Ten Tips for Being an Informed Policymaker,” (S. Dudley, R. Belzer, G. Blomquist, T. Brennan, C. Carrigan, J. Cordes, L.A. Cox , A. Fraas, J.D. Graham, G. Gray, J. Hammitt, K. Krutilla, P. Linquiti, R. Lutter, B. Mannix, S. Shapiro, A. Smith, W.K. Viscusi, R. Zerbe) Journal of Benefit-Cost Analysis (July 27, 2017)

  • “Carbon Tax Policy: A Conservative Dialogue on Pro-Growth Opportunities,” (Anderson, Kristen Soltis, Carroll, Robert J., Graham, John D., Mathur, Aparna, Swagel, Phillip, Viard, Alan D.), Alliance for Market Solutions, Washington, D.C., (2017)

  • “Regulatory Reform in the Trump Era,” (Belton, Keith B., Krutilla, Kerry, Graham, John D.), Public Administration Review, 77(5) 643-644, (September/October 2017)

  • “EPA’s New Source Review Program: Time for Reform?” (Art Fraas, John D. Graham, Jeff Holmstead) Environmental Law Reporter 47 (1) 10026-10040 (January 2017)
  • “Automobile Safety Standards in the U.S. and EU,” (John D. Graham), Directorate-General for External Policies, Policy Department, European Parliament, Free Trade Agreements and Patterns of Risk Regulation in the EU and the U.S., International Risk Governance Council, Lausanne: IRGC (2016) 
  • “The EU Budget System after Lisbon: How the European Parliament lost power and how it may compensate (somewhat) for it,” (Michael W. Bauer, John D. Graham, Stefan Becker), Zeitschrift fur Staats und Europawissenschaften, Journal for Comparative Government and European Policy, 13 (4) 479-496 (2016) 
  • “Cyber-Attack as a Contest Game,” (Alexander Alexeev and Kerry Krutilla)  In A.Kott (ed.) Proceedings of the NATO IST-128 Workshop: Assessing Mission Impact of Cyberattacks, U.S. Army Research Laboratory, ARL-SR-0349, pp. 66-74 (2015)
  • “Preliminary Benefit Analysis for Pedestrian Crash Imminent Braking Systems,” (David Good, Kerry Krutilla, Stanley Chien, Lingxi Li,  and Yaobin Chen), Proceedings of Intelligent Transportation System Conference, v18 pp 1123-8 (2015)
  • "Stealth Regulation: Addressing Agency Evasion of OIRA and the Administrative Procedure Act," (John D. Graham , James W. Broughel), Harvard Journal of Law & Public Policy-Federalist Edition, Vol.1, No.1, 30-54 (2014)
  • "How to Buttress the Weakened 'Winner'? The Eurapean parliament's budgetary powers after Lisbon," (John D. Graham, Michael W. Bauer, Katerina Potapova), 21st International Conference of Europeanists (CES), Washington, D.C. (March 14-16, 2014)
  • "Regulatory and Quasi-Regulatory Activity without OMB and Cost-Benefit Review," (John D. Graham, Cory R. Liu), Harvard Journal of Law & Public Policy, Vol. 37, No. 2, 425-45 (2014)
  • "Uncertainty in the Cost-Effectiveness of Federal Air Quality Regulations," (Kerry Krutilla, David H. Good, John D. Graham), Journal of Benefit-Cost Analysis, 6, 2015, 66-111, 2015 doi:10.1017/bac.2015.7
  • "Beyond Process Excellence: Toward Enhancing Societal Wellbeing," (John D. Graham, Paul R. Noe), draft paper for discussion at the University of Pennsylvania conference on "Regulatory Excellence" (March 19-20, 2015)
  • “Due Process and Management for Guidance Documents: Good Governance Long Overdue,” (Sergio Fernandez,  John D. Graham), Paper presented at the International Risk and Governance Council’s Workshop on Emerging Risks, Rüschlikon, Switzerland (December 16 -17, 2010) 
  •  “Why Governments Need Guidelines for Risk Assessment and Management,” (John D. Graham), Risk and Regulatory Policy: Improving the Governance of Risk, OECD Reviews of Regulatory Reform, 237-246 (2010)
  •  "Is There a Universal Precautionary Principle?" (John D. Graham, Sarah Olmstead)  Controversies in Globalization, 115-124, CQ Press, Washington, D.C. (2009)
  •  “Saving Lives through Administrative Law and Economics,” (John D. Graham), University of Pennsylvania Law Review, 157 (2) 395-540, (December 2008) 
  • “Due Process and Management for Guidance Documents: Good Governance Long Overdue,”(John D. Graham, Paul Noe), Yale Journal on Regulation, 25 (1) 103-112 (Winter 2008)
  • “The Evolving Regulatory Role of the U.S. Office of Management and Budget,” (John D. Graham), Review of Environmental Economics and Policy, Volume 1 (2) 171-191 (2007)
  • “Regulatory Improvement Legislation: Risk Assessment, Cost-Benefit Analysis, and Judicial Review,” (Fred Anderson, Mary Ann Chirba-Martin, Donald Elliott, Cynthia Farina, Ernest Gelhorn, John D. Graham, C. Boyden Gray, Jeff Holmstead, Ron Levin, Lars Noah, Katherine Rhyne, and Jonathan Wiener), Duke Environmental Law and Policy Forum, 11 (1) 89-138, (2000)
Graham testifies before European Parliament's Trade Committee

Description of the video:

if as I have the floor again 50 minutes
00:41
thank you for coming addressing my
00:44
committee and the public Chris here with
00:47
us Thank You mr. chairman just let me
00:52
elaborate for a moment on how I got
00:54
involved in the regulatory cooperation
00:57
challenges of Europe and the United
00:59
States in 2002 when I was serving in the
01:03
White House at the office of management
01:04
and budget the US Trade Representative
01:07
and the State Department and the
01:09
National Security Council came to me and
01:11
said we are in lawsuits with Europe and
01:14
we're not solving our problems is there
01:17
some way to get to these issues in the
01:20
early stages when regulations are being
01:22
developed so we don't have to try to
01:25
resolve our issues at the World Trade
01:26
Organization I'm very pleased that this
01:29
effort to try to build regulatory
01:31
cooperation into the process early is an
01:33
important part of this current
01:35
discussion of a trade agreement between
01:38
the US and the European Union for the
01:41
benefit of the interpreters I'm not
01:42
going to go into the details of my
01:44
testimony I'm just going to make a small
01:46
case study at the start and then i'm
01:49
going to give some general ideas about
01:51
the scope of a possible agreement in
01:54
this area and then review some specific
01:56
recommendations that are in my testimony
01:58
the case study I would like everyone to
02:01
think about is suppose you are starting
02:03
a new car company and you would like to
02:06
market your automobile in Europe and you
02:09
would like to market it in the United
02:11
States now notice if the only car
02:14
companies we had either marketed only in
02:17
Europe or only in the United States this
02:20
would not be an issue but we're going to
02:22
talk about an auto company that wants to
02:24
do both and everybody in the room knows
02:26
there are companies ford motor company
02:29
Daimler volkswagen general motors that
02:31
are in this category of companies so
02:34
let's think about and feel at worse
02:37
let's think about a few of the
02:39
ramifications of wanting to offer this
02:41
automobile on both sides of the Atlantic
02:44
you need to find out what the
02:46
regulations are on the two sides of the
02:48
Atlantic and make sure that you produce
02:50
your vehicle in compliance with those
02:52
regulations so let's take safety
02:55
regulation for example it's an area of
02:57
my field as a scholar I wrote my
02:59
doctoral dissertation on the automobile
03:01
air bag it turns out that the European
03:05
and United States regulators cannot
03:08
agree on the design of the crash dummy
03:10
that will sit in the seat in the
03:14
compliance test they you have to agree
03:16
on the design of the neck of the dummy
03:18
and the upper torso the extremities how
03:21
they're going to behave in the crash
03:22
dynamics I have SAT through years of
03:25
discussions of technical experts on this
03:28
my own view is the European experts have
03:32
a defensible position the American
03:35
experts have a defense defensible
03:36
position and it would be folly to think
03:40
that someone could know I know which
03:41
side is right the problem is somebody
03:44
has to tell them that they have to come
03:46
to an agreement because it really
03:48
doesn't make a whole lot of sense not to
03:50
come to an agreement on the design of
03:52
the crash dummy now to give you a sense
03:54
that sometimes I think one side of the
03:56
Atlantic has a better case than the
03:58
other side of the Atlantic I'll give you
04:00
a second example if you are this company
04:02
you will have to test this car in the
04:06
United States with a crash dummy that is
04:09
not wearing a safety belt by law you
04:12
must test it with a belt with a dummy
04:14
that's not wearing a safety belt in the
04:17
European Union this crash dummy will
04:19
have a safety belt now 30 years ago when
04:23
I wrote my doctoral dissertation the
04:24
u.s. regulation made some sense we only
04:27
had ten percent of Americans wearing
04:29
safety belts Europe had seventy to
04:31
eighty percent at the time but things
04:33
have changed in the United States has
04:35
adopted many laws like European laws
04:37
that require people to wear safety belts
04:39
usage rates are now above sixty percent
04:41
and continuing to rise does it really
04:44
make sense to require these companies to
04:47
test these vehicles on people who are on
04:50
dummies who are unbelted you might say
04:53
well but there are still some people who
04:55
are not belted it turns out however that
04:57
when you design an airbag system for an
04:59
unbelted dummy you design it differently
05:02
and not as effectively for a belted
05:04
occupant
05:05
so the set there are actually safety
05:07
risks associated with this test of this
05:10
unbelted dummy now that's an example
05:13
where I would argue that the European
05:15
system is better designed for today's
05:18
conditions and we should try to move in
05:19
the direction of the European system
05:21
there are other examples where I think
05:23
we should move in the direction of the
05:24
European system but the most important
05:26
thing is somebody has to be there saying
05:28
you have to come to an agreement
05:30
otherwise there's no pressure on the
05:32
system to bring any kind of convergence
05:35
in the process there is a nice little
05:39
study that I'll mention of 43
05:41
regulations of car of of the auto
05:43
industry in the European Union and the
05:45
United States and have found that only
05:47
11 of them were identical of the 32
05:50
regulations that were different half of
05:53
them were minor differences but half
05:55
were major differences and if you were
05:57
offering a car in both sides of the
05:58
Atlantic you'd have to reanalyze the
06:00
problem on both sides of the Atlantic
06:02
for those regulations so I hope that
06:05
little case study just gives you a
06:07
flavor for what it's like to try to do
06:09
business on both sides of the Atlantic
06:11
and face these different regulatory
06:13
systems now I need I need to emphasize
06:16
to you that this is not just the auto
06:18
industry I have set through numerous
06:22
regulatory discussions with European
06:24
regulators and American regulators about
06:27
the chemical industry about agriculture
06:29
about information technology and very
06:32
similar themes are present in a sense
06:36
these two regulatory regimes across this
06:38
vast ocean were developed separately
06:40
without adequate dialogue cooperation
06:44
and coordination now you will hear some
06:50
people say that well a trade agreement
06:52
should deal with tariff barriers not
06:55
with regulations and quite frankly if
06:58
this agreement is going to be meaningful
07:00
it will address more than tariffs
07:02
because most of the issues in trade
07:05
today are not tariffs they are in fact
07:07
regulatory differences between the two
07:10
countries or regions I should say so
07:15
what are the steps to success in this
07:17
area i will give
07:18
three in goals process and scope on
07:22
goals ideally I would love to see
07:25
harmonization I'm a college professor I
07:29
like to think of the ideal but sometimes
07:32
our regulators are never going to get
07:34
there so I also kind of like the idea of
07:37
mutual recognition it's a kind of mutual
07:40
respect idea you know we recognize that
07:43
your regulations are different than our
07:44
regulations but we respect your process
07:46
and and products that meet your process
07:49
will be accepted acceptable in our
07:51
country and vice versa but frankly
07:53
that's a pretty idealistic idea and that
07:56
won't always work so I also think we
07:58
should think of the concept of
07:59
convergence convergence is when the two
08:02
regulatory systems get closer even
08:05
though they don't become identical and
08:07
it allows for rooms and differences but
08:09
it will reduce the amount of work and
08:12
effort required to develop this car and
08:15
sell it on both sides of the Atlantic so
08:17
the goals are harmonization mutual
08:20
recognition and convergence and as the
08:23
previous speakers have mentioned this
08:25
process will not be uniform across all
08:27
sectors of the economy it will need to
08:30
be carefully tailored on a
08:31
sector-by-sector basis and even on a
08:34
regulation by regulation basis so that's
08:37
my view on the goals how about the
08:40
process the key point here is there must
08:43
be centralized political authorities on
08:46
both sides of the Atlantic who are
08:49
accountable for progress we have had
08:54
years of sectoral dialogues where
08:57
regulators from individual agencies talk
08:59
to each other and in many cases they
09:01
have not made progress if there's not a
09:05
centralized political authority saying
09:07
you must come to resolution by a
09:10
particular date on a specific schedule I
09:12
can assure you from my own experience in
09:15
the government it will not happen so the
09:19
centralized political authority
09:21
reasonable people can disagree who it
09:23
should be on both sides of the Atlantic
09:25
I'll offer my own opinions but it has to
09:27
exist and then the third is the scope of
09:30
the agreement on regular
09:32
cooperation there's a temptation to
09:35
focus on all of the existing regulations
09:37
there's a huge volume of volume of them
09:40
but it's very important that we stop the
09:42
future flow of these inconsistent
09:45
regulations the new regulations that are
09:47
being developed over the next decade so
09:49
the scope has to be helped on the
09:51
existing regulations and work on the
09:54
future regulations now here are some of
09:59
my own opinions on the process questions
10:01
in the US government our trade
10:05
representatives are buried in issues
10:08
late in the dispute stage where were
10:11
they are already up almost about to get
10:13
into a lawsuit or they are in a lawsuit
10:15
they are not in the best position to
10:17
work at the front end of the development
10:19
of regulatory cooperation in our
10:21
government you need to reach to a
10:23
different part of the federal government
10:24
to find these people they exist in a
10:27
very obscure office called the Office of
10:30
Information and regulatory affairs at
10:32
our office of management and budget and
10:34
there are key people in the various
10:37
regulatory agencies i am not a good
10:40
enough student of the european
10:41
governance system to pinpoint where in
10:44
the european system this accountable
10:46
political authority to be my guess would
10:48
be will be in the secretary general's
10:50
office in the european commission but i
10:52
honestly don't know for sure but we need
10:54
to find such a place or create such a
10:57
place and make sure those people are
10:59
accountable now I would like to move to
11:02
some observations on the solution that
11:05
track much more directly my written
11:08
testimony I think it's important for
11:11
people to recognize there is that we're
11:14
not talking here in most cases about the
11:16
United States is wrong or Europe is
11:18
right or vice versa in most cases the
11:23
regulator's do have a case for why they
11:25
want to do the regulation the way
11:26
they're doing it so what we need is some
11:30
pressure on these people to find ways to
11:33
converge even if they don't become
11:35
exactly identical I also want to make
11:38
clear the point I've already hinted at
11:40
that the World Trade Organization is not
11:43
a solution to this problem
11:46
it's not very effective a dispute
11:49
resolution it has very weak remedies
11:52
even if you win a case on the World
11:54
Trade Organization lawsuits in the world
11:57
trade organization as I argued in the
11:59
White House for five years should be
12:01
considered a last resort when all other
12:04
efforts at cooperation have failed in
12:07
other words the WTO lawsuit is a sign of
12:10
a problem not a sign that a solution is
12:13
on the horizon and it's very important
12:15
that we see that because the people who
12:17
are impacted by this process know that
12:20
the WTO is not the solution to these
12:23
problems now I'd like to make a final
12:26
comment about the role of the European
12:28
Parliament and the United States
12:29
Congress as institutions and how they
12:32
can be helpful and moving the process of
12:34
regulatory cooperation forward I think
12:38
each year the European Parliament and
12:40
the US Congress should hold hearings
12:42
where OMB and the Secretary General's
12:45
Office and regulators and stakeholders
12:47
are invited to testify on the rate of
12:50
progress in regulatory cooperation I
12:52
think the European Parliament the
12:54
Congress should develop scorecards for
12:57
regulatory cooperation where we can put
13:00
numerical scores on specific agencies
13:03
specific administrators how well are
13:05
they doing on the progress of regulatory
13:07
cooperation each year these regulators
13:11
will be invited to testify how much
13:13
they've progress they've made where they
13:15
have faced obstacles where they need
13:17
help but this entire dialogue and the
13:19
United States is not occurring now no
13:23
one is asking the executive branch and
13:25
holding them accountable for regulatory
13:27
cooperation with the European Union this
13:30
agreement has the opportunity to create
13:32
that kind of accountability and without
13:35
the Congress and the Parliament pushing
13:37
on this issue I think it is not very
13:40
likely that we will see dramatic
13:42
progress i'm also very encouraged that
13:45
the european parliament has a relatively
13:47
new impact assessment unit and i think
13:50
it could also play a constructive role
13:52
by prodding the european commission to
13:55
engage in more collaboration with the
13:57
united states
13:59
not only in the guidance around
14:00
regulatory impact assessment but
14:03
actually in collaborating on specific
14:06
regulatory impact assessments for key
14:08
regulations they could for example
14:10
publish illustrations of how regulatory
14:14
impact assessments on the two sides of
14:15
the Atlantic have been approved have
14:17
been improved or could be improved and
14:19
how they can be harmonized or reach a
14:23
degree of convergence these models of
14:26
successful regulatory cooperation could
14:28
then be documented and publicized by the
14:31
European Parliament and by the Congress
14:33
thereby providing motivation and morale
14:36
for people in the various agencies to
14:38
improve their practices so I'm in
14:41
conclusion delighted that we are here
14:43
today to talk about this issue it is not
14:46
an easy one and people who say we're
14:48
just going to tweak a few technical
14:50
regulations and nothing else will be
14:51
affected they don't understand the
14:53
complexity of these issues okay it is
14:55
going to take a long time and it's a big
14:57
investment of energy but it's worth it
15:00
there's no real reason you shouldn't
15:02
design these vehicles and sell them on
15:03
both sides of the Atlantic and respect
15:05
each other's regulatory system thank you
15:08
very much for your time sir thank you
15:10
very much indeed
15:18
you