Regulatory reform means making things less complicated or removing overlapping rules
Advancing regulatory cooperation and convergence is an APEC priority in 2011 along with further expanding trade, deepening economic integration, and promoting green growth.
Stepping up regulatory cooperation and reform, including eliminating outdated regulations and improving existing rules, boosts productivity and creates jobs, while also protecting public health, safety and the environment. Overhauling rules and procedures also mean that goods, services and investments flow more efficiently across borders helping small businesses grow.
“Regulatory reform [however] doesn’t mean you let loose on everything,” said Ambassador Laura Del Rosario, senior official of the Philippines for APEC, in an interview on PBS Hawaii during the Honolulu meetings.
“It just means making things less complicated or removing overlapping rules.”
A good example is the Ease of Doing Business Action Plan. APEC is targeting a 25 percent improvement region-wide by 2015 in five key areas of doing business: starting a business; getting credit; enforcing contracts; trading across borders; and dealing with permits.
An interim target of a five percent improvement has been set for the end of this year. To help achieve this, APEC has carried out projects to transfer skills, knowledge, technical expertise and best practice between officials on these priority areas.
Economies in the APEC region have reported successes since this initiative was introduced and APEC is well on target to meet the deadline. Meanwhile, more work is still being done.
As part of the Honolulu Declaration, APEC Leaders announced during their meeting in November their commitment to “eliminating unjustifiably burdensome and outdated regulations” and to fostering “greater alignment in regulatory approaches.”
One of the ways to do this is by implementing Good Regulatory Practices (GRPs), which seek to improve both the effectiveness and efficiency of regulations in realizing their protective objectives, while maintaining a business-friendly environment.
Bolstering the internal coordination of rule-making across government agencies and conducting impact assessments of regulations are two components of GRP.
What bolstering coordination internally means is improving communication among multiple agencies across sectors within an economy. This ensures that trade and business issues are considered through increased transparency and accountability in the rulemaking process. In effect, regulations become mutually supportive and legitimate objectives are met.
Conducting impact assessments of regulations, on the other hand, is a structured process for collecting and evaluating information about the economic and social impacts of proposed rules to find good solutions. In other words, regulators ask themselves if a particular rule or requirement is efficient and effective.
The third component of GRP is facilitating routine public consultations with a wide variety of stakeholders – including civil society, consumer groups, industry and trading partners – to ensure an accountable and transparent regulatory system.
Another big step towards creating a good regulatory environment is applying the new, results-oriented APEC Regulatory Cooperation Plan, which APEC Ministers put forward at their meeting in Honolulu.
The plan provides APEC economies with core principles – such as supporting the multilateral trading system, engaging key stakeholders, and promoting alignment to international standards and conformance systems – to put into action to achieve effective and efficient regulatory cooperation.
As part of the plan, APEC is also strengthening the implementation of the APEC-OECD Checklist in APEC economies. This serves as a voluntary tool that economies can use to assess their respective regulatory reform efforts – for example: regulatory quality, competition policy, and market openness.
In effect, the checklist will help eliminate or minimize unnecessary divergences in regulatory measures and promote regulatory approaches that are transparent, consistent, comprehensible and accessible to users in both the public and private sectors.
Better alignment of standards across all economies in the Asia-Pacific region would help businesses “make inroads into new markets and for citizens to find jobs” said US Secretary of State, Hillary Clinton in her address to APEC officials earlier this year.
Indeed the importance of regulatory issues to governments, businesses and everyday citizens in the region cannot be overstated. Importantly, too, such cooperative activities among regulators, industry and consumers can lead to great benefits for all.
Energy efficiency can be improved when smart grid interoperability standards are better aligned. Patient-care quality can get better when the medical devices industry follows a code of ethics. And foods can be made safer when regulators and producers better harmonize domestic inspection standards with international ones.
The goal therefore is to build high quality regulatory environments in APEC economies where businesses thrive and consumers are also protected.
As APEC works towards its regulatory goals, individual consumers, businesses and whole economies will benefit – because reducing regulatory barriers to trade and investment will help build sustainable economic growth in the region and prosperity for its people.