Taking ACUS to Task for Industry Bias in 'International Regulatory Cooperation' Project

by Michael Patoka

March 22, 2013

In late 2011, a little known but surprisingly influential independent federal agency called the Administrative Conference of the United States (ACUS) conducted a research project on “International Regulatory Cooperation” (IRC), culminating in a set of recommendations to U.S. agencies. In a letter sent yesterday (March 21), CPR Member Scholars Rena Steinzor and Thomas McGarity, and I urge ACUS Chairman Paul Verkuil to look back over the project’s many flaws, which reflect—in both process and substance—ACUS’s pervasive bias toward the views of regulated industries.

What exactly is meant by “international regulatory cooperation”? As we write:

The principal objective of IRC is to “harmonize” U.S. regulatory standards with those of other countries or international standard-setting organizations. …. There is always a danger that such harmonization efforts will become a deregulatory “race to the bottom” in which nations, at the urging of business groups, converge on the least protective standard in the interest of maximizing international trade.

A number of current proposals (described in an attachment to the letter) illustrate how “harmonization” efforts can significantly reduce health, safety, or environmental protections. For example, the Food and Drug Administration (FDA) has proposed establishing “import tolerances” for residues of unapproved animal drugs in foods shipped to the United States. Instead of its normally rigorous drug approval process, the FDA would essentially rely on a foreign government’s approval of the drug in question, conducting a much less comprehensive review before signing off on the wholesale importation of foods containing that residue. The FDA would in many cases borrow the “maximum residue limits” established by the Codex Alimentarius, an international standard-setting body heavily influenced by industry groups. Since much of the food we eat in the United States is imported (15 percent of all our food, 91 percent of our seafood, 61 percent of our honey, and 8 percent of our red meat), the presence of unapproved drug residues could expose Americans to much higher risks of allergic reactions, cancer, and other serious health problems.

In the letter, we explain how industry groups and their ideological allies were able to steer ACUS’s project toward their policy preferences at virtually every turn, by framing the debate in ways that ignored any downside to “harmonization” and taking advantage of the industry-biased composition of ACUS decisionmaking bodies. The project grew out of a similarly one-sided event co-hosted by the vociferously anti-regulation U.S. Chamber of Commerce, and the research report that ACUS commissioned in response presented only industry’s perspective on the issue.

This report formed the basis for ACUS’s recommendations and so naturally they reflected industry’s preferences as well. At one point in the process, the project committee, at the urging of one of its members, injected greater balance into the recommendations, but the Chamber and its allies within ACUS had the changes reversed, with the support of ACUS leadership. ACUS’s final recommendations led in part to an Executive Order issued on May 1, 2012 that perpetuates the same industry-driven priorities.

In light of the project’s flaws, we ask Mr. Verkuil to ensure greater balance in ACUS’s work:

We respectfully urge you to (1) monitor research reports for bias in their methods and perspectives, (2) revise the composition of ACUS decisionmaking bodies (the Committees, the Assembly, and the Council) to include a balanced range of viewpoints, and (3) ensure that industry groups and their allies do not enjoy an outsized influence over the process or outcome of ACUS projects.

We also describe the substantive implications of this particular project:

The imprudent push toward IRC, as embodied in ACUS’s recommendations and Executive Order 13609, encourages agencies to find “unnecessary differences” to eliminate in order to promote trade, without adequately grounding such efforts in the agencies’ statutory missions to protect health, safety, and the environment. As a result, agencies may be pressured to make regulatory decisions solely on the basis of trade-related economic factors—which may be impermissible considerations under their statutes in many cases—even where those decisions compromise public safeguards.

The letter is here.

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