—Francesca Bignami, Professor of Law, George Washington University Law School
In seeking to guarantee market access, international trade regimes generally include not only a substantive component, for instance a commitment to non-discriminatory product safety regulation, but also a procedural component designed to ensure that foreign firms can make themselves heard in the domestic administrative process. In a series of high-level policy recommendations and directives issued by the United States government, this procedural agenda has taken a surprising turn: what was once a set of legal devices tailored at stopping discrimination against American firms abroad appears to have morphed into a broad-based template for reforming administrative law worldwide. If this indeed is the ambition, the new task of designing a fair and good model of administrative law amenable to export is likely to prove significantly more complicated than the earlier procedural agenda, and it will be important to take into account the considerable comparative law variation that exists throughout the world.
As I have argued elsewhere, through the rules and procedures of administrative law, liberal societies seek to hold public administration accountable to a whole network of democratic actors, not only organized social and economic groups (including foreign firms), and these rules and procedures vary systematically, and legitimately, among different systems of pubic law.
For students of multilateral and bilateral trade regimes, the procedural dimension of trade liberalization is extremely familiar. The jurisprudence of the European Court of Justice and the WTO Dispute Settlement Body, as well as the positive law of the two organizations, is full of examples in which domestic regulatory agencies are required to revamp their administrative procedure to allow foreign firms an opportunity to be heard before taking action that would unfairly burden foreign products or services. Bilaterally, the United States has entered into a number of agreements, most notably with the European Union, that seek to promote international trade through the harmonization of regulatory standards, the mutual recognition of domestic standards, and, most importantly for present purposes, a set of good governance principles aimed at guaranteeing foreign (American and European) participation in administrative procedure and preventing discriminatory regulation.
The past year has seen a number of important policy statements by the United States government underscoring its commitment to international regulatory cooperation. In 2011, the Administrative Conference of the United States (ACUS), an independent federal agency, issued an impressive report analyzing the historical experience, both positive and negative, of efforts at regulatory harmonization, information exchanges, cross-border enforcement activities, and other forms international regulatory cooperation across the federal government and setting the agenda for an even more concerted effort going forward. This was followed by an official ACUS recommendation, a presidential Executive Order on the steps to be taken by federal agencies to improve international regulatory cooperation, and an American Bar Association resolution in the same vein. (Many thanks to Neysun Mahboubi for chronicling these developments for the Comparative Administrative Law Listserv.)
Although in certain respects, this recent flurry of activity builds upon previous U.S. efforts at trade liberalization, in particular the bilateral U.S.-EU relationship, there is a marked difference in the public law dimension of the agenda. While the procedural commitments contained in the U.S.-EU agreements of the past decade were clearly aimed at facilitating the access of American and European firms to regulatory proceedings in the two jurisdictions, the current set of policy statements directs federal agencies to advocate sound (generally understood to be American) administrative law tout court. According to the ACUS recommendation, federal agencies should “promote to foreign authorities the principles that undergird the United States administrative and regulatory process,” which in the Executive Order is captured by the direction to promote “good regulatory practices internationally, as well as the promotion of U.S. regulatory approaches, as appropriate,” and in the ABA resolution by the recommendation to “promote . . . the core principles of sound administrative and regulatory process.”
If the goal is indeed to promote a set of good governance principles worldwide, then the task that has been set for federal agencies in their dealings with their foreign counterparts is far more ambitious and complex than what we have seen before. To simplify the analysis, let us stick with the first of the eight principles which, according to ACUS, should be part of this good governance initiative: “transparency, openness, and public participation.” What, concretely, as a matter of legal rules and procedures, does this principle entail? If the aim is simply, as it has been in the past, to open up the process to outsiders, and in particular the market actors that are sufficiently well resourced to take part in multiple regulatory proceedings throughout the world, then something like what was set down in the U.S.-EU guidelines might be appropriate:
[P]romote public participation through disclosure of and access to supporting documents, particularly the timely release of the supporting rationales, analyses and data for regulatory proposals, and a timely opportunity for all interested parties, both domestic and non-domestic, to provide meaningful comments concerning regulatory proposals, including supporting materials.
On its face, at least, this procedure bears significant resemblance to U.S. notice-and-comment rulemaking. (It should be noted, however, that the actual European process is markedly different, most importantly in that it is not backed by judicial review). If the aim is, by contrast, to fashion a good public law of administration, then it is necessary to contemplate a much more comprehensive set of legal rules and procedures, designed to hold regulators accountable to the whole host of social and political actors prominent in liberal democracies, and to acknowledge a wide range of comparative law variation in how this common purpose of establishing an accountability network is accomplished.
What then, in an accountability-network scheme, is the set of rules and procedures necessary to achieve “transparency, openness, and public participation”? If the objective is accountability to elected officials, then the legislative veto procedures common in parliamentary regimes might be contemplated. If it is accountability to the general public, which often does not have the resources to engage in complex regulatory proceedings, then it could be important to focus on freedom of information legislation and parliamentary ombudsmen, legal techniques that rely heavily on the indirect pressure that can be brought to bear by the press and elected officials to influence public administration. If the goal is accountability to organized interests in society, then “transparency, openness, and public participation” might indeed be achieved by a rulemaking process of the notice-and-comment ilk, similar to what is contained in the U.S.-EU guidelines. As an important strand of American legal scholarship argues, however, this process has significant pathologies, and therefore it is important to consider the alternative mechanisms that liberal democracies have developed to ensure accountability to social and economic actors, including balanced advisory committees of consumer, industry, environmental, and other civil society groups. Advisory committees have their own flaws, but there is no research showing that they are systematically more problematic than notice-and-comment rulemaking.
In most cases, the transparency and participation called for by a regulatory process that is open to outside interests and foreign firms is not strictly at odds with the other dimensions of fair and good administrative law, or with the legal alternatives to notice-and-comment rulemaking that have been developed in other legal systems. But it should be frankly acknowledged that they are less likely to work to the advantage of foreign market players, which do not have the same electoral clout as domestic actors, and which are unlikely to be appointed to government advisory committees. This is all to caution that the task of fashioning a public law of administration that can be legitimately promoted in the rest of the world is likely to prove considerably more complicated than the procedural trade liberalization initiatives that have been undertaken to date and that the two projects, while certainly related, should be informed by different sets of normative and comparative law considerations.