International Regulatory Co-operation - Better rules of globalisation

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In 2012, OECD countries adopted the Recommendation of the Council on Regulatory Policy and Governance, making international regulatory co-operation (IRC) a key ingredient of regulatory quality.

IRC plays a strong role to “harness” and create the common rules of globalisation. Surprisingly, however, this potential remains largely untapped. The benefits are potentially high. They include:

increased trade and investment flows and additional GDP points;
administrative efficiency gains and cost savings for government, business and citizens;
societal benefits such as improved safety and strengthened environmental sustainability.

IRC Flower - 2012 Recommendation

The many forms of IRC

IRC mecanisms

There is a variety of ways to achieve regulatory co-operation. OECD (2013) identifies 11 mechanisms, from the most binding one through harmonisation of rules via joint institutions to the lightest form of cooperation through exchange of information among regulators.

Despite the growing trend in regulatory co-operation, decision making on IRC is not based on a clear understanding of benefits, costs, and success factors of the various IRC options. The OECD has defined a preliminary range of benefits and costs/challenges of IRC, and is currently unbundling the typology of IRC mechanisms by identifying the benefits/costs and conditions for success of the various mechanisms.

IRC in practice: first in-depth country review on IRC in Mexico

The variety of IRC approaches was explored in the pioneering Review of International Regulatory Co-operation of Mexico. This report documents and assesses the main IRC policies and practices in Mexico, using the range of possible IRC approaches to structure the analysis. The two main axes of the analysis are: 1) the unilateral efforts undertaken by Mexico to support regulatory coherence through good regulatory practices, namely regulatory impact assessment (RIA), stakeholder engagement, and the adoption of international standards; and 2) Mexico's co-operative efforts on regulatory matters, bilaterally, regionally or multilaterally, through memoranda of understanding (MoU), the High Level Regulatory Cooperation Council with the United States, mutual recognition agreements, trade agreements, and/or participation in international fora.

The OECD finds that Mexico stands out for its commitment to and de facto active use of a variety of IRC approaches. Mexico’s active efforts to embrace globalisation are reflected in many aspects of its domestic policies, practices and institutions. Mexico has put in place innovative mechanisms to integrate international considerations in the everyday work of regulators, through regulatory improvement disciplines. At the same time, the Mexican government as well as individual regulators co-operate actively on regulatory matters at bilateral, regional and multilateral levels. And yet, as in all countries, globalisation has not yet fully permeated the everyday work of regulators.

Two areas of work on IRC: International organisations as rule makers and trade policy

Current OECD work focusses on two core areas. One stream of work analyses the role of international organisations as rule makers supporting IRC. A second stream of work focuses on IRC in the context of trade policy. Further information on these work streams, publications and relevant OECD meetings can be found under the following links:

Key publications on IRC

In 2013, the OECD released International Regulatory Co-operation: Addressing
Global Challenges, the first systematic
and synthetic synthetic stocktaking of knowledge and evidence availlable to
date on the various mechanisms
available to governments to promote IRC.

The report builds on 10 case studies of various IRC mechanisms, their opportunities, pitfalls, benefits and costs: tocktaking of knowledge and evidence available to date on the various mechanisms available to governments to promote IRC, and their benefits and challenges.

Facilitating trade through regulatory cooperation: The case of the WTO's TBT/SPS Agreements and Committees English (3 July 2019)
Review of International Regulatory Co-operation of Mexico - English - Spanish (2018)
The contribution of transgovernmental networks of regulators to international regulatory co-operation, WP No. 10 (2018)
International Regulatory Co-operation and Trade: Understanding the Trade Costs of Regulatory Divergence and the Remedies (2017)
International Regulatory Co-operation: The Role of International Organisations in Fostering Better Rules of Globalisation (2016)
International Trade and Good Regulatory Practices: Assessing The Trade Impacts of Regulation, OECD Regulatory Policy Working Papers, No. 4 (2016)
The Contribution of Mutual Recognition to International Regulatory Co-operation, WP No. 2 (2016)
International Regulatory Co-operation: The Menu of Approaches (2015)
International Regulatory Co-operation and International Organisations: The Cases of the OECD and the IMO (2014)
International Regulatory Co-operation: Addressing Global Challenges (2013)
International Regulatory Co-operation: Case Studies, Vol.1 - Chemicals, Consumer Products, Tax and Competition (2013)
International Regulatory Co-operation: Case Studies, Vol.2 - Canada-US Co-operation, EU Energy Regulation, Risk Assessment and Banking Supervision (2013)
International regulatory co-operation: case studies, Vol.3 - transnational private regulation and water management (2013)
OECD Recommendation of the Council on Regulatory Policy and Governance (2012)

For more information, please contact Céline Kauffmann or Marianna Karttunen, OECD Regulatory Policy Division.

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