Research On The Regulatory Cooperation Mechanism In International Economic And Trade Agreements

After World War II,GATT has been committed on mitigating and restricting tariff barriers for many years,and then WTO established a coordinating system of member's trade policies.WTO sets up uniform discipline constraints on member's international trade regulatory measures,such as tariffs,customs valuation,origination rules,anti-dumping,etc.It also restricts member's domestic regulatory measures with TBT agreement,SPS agreement,and GATS agreement with requirements of non-discrimination,transparency,and reduction of unnecessary trade restrictions.However,WTO mainly aims at member's protective domestic regulatory measures with a narrow scope.It is hard to resolve the widespread regulatory barriers that are inefficient,repetitive or non-discriminatory.However,such domestic regulatory barriers out of WTO's control keep handicapping the international trade.The difficulties of international economic and trade agreements over domestic regulation control lie in how to distinguish necessary and unnecessary regulations,and how to achieve a balance between the member's regulatory autonomy and trade free.WTO seems to be in a dilemma upon this task.The root cause of this dilemma is that the member is focused on domestic considerations when preparing and implementing regulatory measures,which may lead to both trade barriers and regulation inconsistences among members and then increase trade costs.The key to this dilemma is to introduce international considerations in the process of regulation making,particularly the considerations on the impacts that regulations would have on international trade and the regulation consistence,and to try International Regulatory Cooperation(IRC).It is impossible for one country to resolve the problems of globalization within the areas of environment,finance,health,and safety,where IRC is essential to collective response measures.The Doha Round negotiations have stagnated for a long time,therefore,WTO seems difficult to achieve the reform of domestic regulation supervision.In 2012,the United States passed Executive No.13609,which explicitly advocated IRC in regional FTAs,introduced Good Regulatory Practices as core guideline,and committed to the consistency,transparency and efficiency of domestic regulations.After that the United States successively introduced the issue of regulatory consistency and regulatory cooperation into the TPP and TTIP negotiations.Subsequently,recent international economic and trade agreements such as CETA,EPA,JEEPA,and USMCA all incorporated rules of regulatory cooperation.The objectives,models,rules,and safeguards of IRC in recent international economic and trade agreements have formed a new IRC mechanism as a new global example norm.No IRC is introduced into China's FTAs,nor any domestic good regulatory mechanism established.Therefore,it is necessary to systematically study both the theory and the practice of IRC,to find out strategies of using international economic and trade agreements for better IRC plan and domestic regulatory reform.This dissertation includes the following sections.Part ? of the dissertation is the basic theories and practice of IRC mechanism in international economic and trade agreements.In order to achieve the goal of public policy,countries have formed kinds of regulations to intervene or control the market.Based on different historical,cultural,political and institutional reasons,countries formed different regulations within respective fields.Such regulatory differences,particularly those unnecessary ones,are hindering the development of the global economy.The differences in regulations of various countries will not automatically reach a state of harmony,and will result in regulation conflicts.However,where there is conflict,there will be cooperation.The international regulatory cooperation mechanism can effectively resolve regulatory conflicts and promote global economic development.The practice of regulatory cooperation in international economic and trade agreements has undergone a transition from binding regulatory effects to binding regulatory processes,from binding discriminatory regulations to pursuing domestic regulations to be transparent,consistent,and efficient.GATT pays attention to the coordination of national foreign trade policies,traditional international economic and trade agreements presented by WTO focus on the coordination of domestic regulatory effects,while recent international economic and trade agreements try to pursue the transparency,consistency,and efficiency of the regulatory process.The IRC in international economic and trade agreements still faces many challenges,such as the confusion of IRC goals,the selection of IRC models,the arrangement of IRC rules,and the security of IRC,etc.Part ? of the dissertation is about the objectives and principles of IRC in international economic and trade agreements.The goals of IRC in international economic and trade agreements should not be a single one,but a multi-level,hierarchical goal system.However,there are always confusions in achieving these goals.In order to ensure the domestic policy goals,regulatory autonomy is necessary,but it may also lead to trade barriers and regulatory conflicts.Therefore,the balance of these goals should be fully considered in the beginning of regulation preparation.Secondly,under certain conditions some important goals should be specially identified and given high priority.To achieve these goals,the principles of regulatory autonomy,multiple governance,cost-benefit,and regulatory consistency should be insisted.Part ? of the dissertation is about the model of IRC in international economic and trade agreements.IRC models include three models of principal-agent,composite network and experimental governance.The IRC in traditional international economic and trade agreements mainly adopts the principal-agent governance model.However,under the principal-agent model,the entrusted matters are usually not very clear,and the consequences are usually unpredictable too,so many members worried that it may potentially harm domestic regulatory autonomy and that it may not fit the responding needs to new updating problems.Although experimental governance model has been practiced only in specific areas and no legal bindings have been commonly confirmed,it is widely adopted by recent international economic and trade agreements,by which the framework objectives is declared,participants practice IRC,periodically report and comment under the framework,and keep regular revising to the framework objectives.The experimental governance model fully respects member's regulatory autonomy,keep development in practice,and represents the trend and future if IRC in international economic and trade agreements.Part ? of the dissertation is about the rules of IRC in international economic and trade agreements.Disciplinary constraints on domestic regulations in traditional international economic and trade agreements include non-discriminatory requirements,necessity requirements,international transparency requirements,and the encouragement of usage of regulatory equivalence,mutual recognition,and international standards for regulatory coordination.Such traditional constrains aimed to eliminate protective trade measures,but showed some deficiencies as well,such as unable to resolve the non-discriminatory inconsistency of regulations,paying more attention to regulation effects rather than to regulation process,having limited scope of disciplinary constraints,being insufficient of domestic democracy protection,and ignoring the participation of stakeholders,etc.The IRC rules in recent international economic and trade agreements pay more attention to the transparency requirements of the regulatory process and the participation of stakeholders,create Good Regulatory Practice that requires internal regulatory cooperation review,regulatory impact analysis,transparency,and participation of stakeholders,and focus on the sharing and compatibility of IRC,and eventually form a new IRC paradigm.According to the specific rules design of IRC,the recent international economic and trade agreements have demonstrated their own characteristics and imperfections.TPP/CPTPP takes the guiding approach that directs members to Good Regulatory Practice through demonstration.Since a member's domestic legislation it is not appropriate to be the demonstration,members should explore best practice in accordance with their own national conditions with problem-oriented method.TTIP takes the harmonizing approach which is good at the coordination and integration of different members' rules,but it is not appropriate to consider cost-benefit analysis as an inevitable choice for regulatory impact analysis.USMCA takes the comparative mandatory approach that pays more attention to transparency obligation,which shows the uniformization of different countries' rules and should not be misunderstood as simple direct output of domestic legislation.Part ? of the dissertation is about the security mechanism of IRC in international economic and trade agreements.Traditional international economic and trade agreements trended to adopt compulsory dispute settlement mechanism on IRC disputes.The necessity and rationality of applying dispute settlement mechanism have provoked much questions,and other problems of applying dispute settlement mechanism are also widely discussed for its high cost and non-transparent process.The recent international economic and trade agreements also applied the compulsory dispute settlement mechanism which is half-open and is supported by pecuniary compensation,while only USMCA specially takes comparative constrain disputes settlement mechanism to IRC.The traditional international economic and trade agreements also adopted a soft but effective mechanism of trade policy review.Its shortages include that the review scope is too wide and review details are not enough,and it is wick to major economies.It will be better if sub-issues reviews are appended to comprehensive review,the gap between trade policy review and dispute settlement mechanism is good linked,and the post-review supervision is strengthened.The recent international economic and trade agreements commonly adopted a soft promotion mechanism to IRC.TPP/CPTPP establishes a notification implementation and review mechanism.TTIP adopts a ministerial conference review and exchange mechanism.USMCA encourages members to seek alternative solutions.Since regulation involves the political and legal system of a member country,regulatory cooperation in international economic and trade agreements should combine both compulsory mechanisms and soft mechanisms,strictly limit the application of compulsory mechanisms,perfect soft mechanisms,and establish technical assistance mechanisms for developing countries.Part ? of the dissertation is about the challenge and response of China option on regulatory cooperation in international economic and trade agreements.China is facing double challenges;one is that the political strategies of IRC in recent international economic and trade agreements put pressure on China's participation of IRC,the other is that the new approaches of IRC set up higher requirements to China's domestic regulations.Accordingly,China should adopt dual countermeasures.Domestically,China should reform and optimize regulations with reference of Good Regulatory Practice,improve transparency,broaden public participation,establish regulation impact assessment rules,setup regulatory coordination agency,and improve regulatory coordination procedures.Internationally,China may consider to introduce appropriate IRC mechanisms in the negotiation or upgrading of FTAs.Harmonizing approach of regulatory cooperation should be a preferable choice to China while guiding approach is acceptable and comparative mandatory approach is not appropriate.China should deliberately design the IRC plans,coordinate multiple goals based on the achievement of domestic public policy objectives,confirm other country's IRC principles and procedures,develop regulation impact assessment that accept the absence of cost-benefit analysis,emphasizing transparency and public participation on the basis of regulation consistency improving,encouraging mutual recognition and usage of with international standards,advocate experimental practice of IRC,and exclude the application of disputes settlement mechanism.Beside this,China should also actively participate in the rules making of IRC,and take initiatives to reform the domestic economy and government administration,by which the institutional advantages and Good Regulatory Practice would be demonstrated,and the better interaction between the international and domestic law would be gradually formed,and China would eventually get high voice in global economic governance fields.