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TTIP talks: What’s cooking?
- Perspectives on Food & Farming
Our system is worse than you think
, you will look at it and it
is worse than you think…our regulatory system did not look
this way 30 years ago, but this is where we are now.”
Robert Weissmann, Public Citizen, USA
The proposed chapter on regulatory convergence in TTIP is landmark.
Proponents of TTIP describe it as a regulatory agreement between the US
and EU. Regulatory convergence is the signature piece of TTIP and will define
the overall content of the agreement. According to Robert Weissman, the
short version of what the US is proposing, is that the EU regulatory system
should look more like the US regulatory system.
One of the main elements of the US system of regulations is called Notice
and Comment. Notice and Comment is very attractive in principle and works
in theory, but in practice is tilted in favour of industry. The core idea behind
Notice and Comment is that in any regulation the public is given notice on
proposed legislation and allowed to comment.
Robert Weissman, explained the 3 key features of the Notice and
Comment system.
First, it has a fundamental reliance on Cost-Benefit analysis, which in the
United States is an evolved pseudo science that is fundamentally tilted in
favour of industry. The costs are mainly related to financial burden for the
industry, using estimated costs provided by the regulated industry. Looking
at cost-benefit analyses in retrospect shows that the industry estimates of
costs are never as high as projected. The benefits are also biased because
benefits are monetized, and that is a problem when examining issues like
lives saved in the long-term, injuries prevented, biodiversity protected, dignity
and equality preserved, and this is inherently underappreciated in a cost
benefit analysis based purely on economic impacts. This is embedded in the
notice and comment system.
A second problem is centralised administrative review. The US Office of
Information and Regulatory Affairs
3
(OIRA) reviews cost benefit analysis
conducted by government agencies. In almost 100 % of the reviews OIRA
intervention favours industry and limits regulation or waters down the
legislation to meet the needs of the regulated industry.
A third area of concern is judicial review. After a rule is finally issued it is
subject to judicial review, where industry can challenge the rule or legislation.
The judicial review process can examine the cost benefit analysis, i.e. if all
costs provided by the industry in the notice and comment phase, were
included.
These three chokepoints mean that in practice it is very difficult to regulate
and this leads to a chilling effect on regulation. It is a big endeavour to make
new rules and agencies are reluctant to do so.
Two examples were given to illustrate how
difficult and time consuming this system is,
ultimately with a “chilling effect “on legisla-
tion, where government agencies are reluc-
tant to propose new rules or legislation. In
both examples given, regulating silica dust
at work sites and technology in automo-
biles that would improve safety relating to
back-over accidents regulation was delayed
and finally not implemented.
In conclusion,
Robert
Weissman
suggested that
Europeans take a much
closer look at the US system
of legislation and how
big business influences
legislation.