Binational effort on reducing economically harmful regulatory conflicts moves ahead, but slowly

February 2014 marks the three-year anniversary of a joint U.S.-Canada effort to reduce unnecessary regulatory differences that raise the cost of doing business across the border — and can raise prices for consumers as well. President Barack Obama and Prime Minister Stephen Harper created the U.S.-Canada Regulatory Cooperation Council to guide bilateral work to streamline and harmonize regulations. The council works toward mutual acceptance of each other’s standards when harmonization is not possible, and seeks other ways to simplify the cross-border regulatory process, such as recognizing common testing procedures and enforcement.

Despite sometimes slow progress, the council has moved ahead with several projects. For example:
• The two countries have launched a number of pilot projects (one already completed) to jointly review veterinary health products.
• Joint observational inspections of pharmaceutical manufacturing sites in the U.S. and Canada are being made, a step toward increasing mutual reliance on each country’s routine oversight of manufacturing practices.
• The U.S. Food and Drug Administration and several Canadian regulatory agencies are working toward recognition of each other’s food safety processes. Both countries are reviewing accreditation criteria for labs that test for food safety, leading toward the development of a permanent system to mutually recognize laboratory certification.
In addition to these and other planned initiatives, the binational council “has raised awareness about the unnecessary regulatory differences between the U.S. and Canada,” says Adam Schlosser, who directs the U.S. Chamber of Commerce’s Center for Global Regulatory Cooperation.
“These differences don’t result in increased protections of health, safety or the environment,” he adds, “and likely arise simply from a lack of communication between regulators.”
One frequently cited example is the varying standards for a can of soup. Vegetable soup in the U.S. is sold in 16-ounce cans, while the same soup in Canada must come in 19-ounce cans. This requires two different production lines and packaging.
A similar size requirement impacted baby food manufacturers for many years, Schlosser says, but the Canadian government recently lifted that mandate. Schlosser notes that each country has separate and distinct regulatory requirements, which compel companies to file multiple applications.
“In order to get approval to use an SPF [sun protection factor] claim on a label, Health Canada requires about three pages of paperwork. Meanwhile, the FDA requires nearly 50 pieces of information,” Schlosser says.
In late 2011, the council formally kicked off its efforts with the creation of a joint action plan. Working groups were created to develop common approaches in areas such as food safety testing; classification and labeling of workplace hazardous chemicals; and rail and motor-vehicle safety standards.
It remains to be seen when states and provinces will be included in what has been, to date, a federal effort. Schlosser cites a number of areas where state and provincial governments play a prominent role (procurement, transportation/trucking standards and business registration) so it makes sense that they should be represented.
Many organizations believe the council’s work is going too slowly. The U.S. Chamber of Commerce recently helped organize a response to both countries’ requests for suggestions to move the process forward.