Differences in regulations across countries can create significant barriers to trade and investment, increasing costs for businesses, hampering market access, and limiting consumer choice. IRC helps to reduce these barriers by promoting greater compatibility and alignment of regulations, while still respecting national policy objectives and preferences. This can be achieved through various mechanisms, such as harmonisation, mutual recognition, or equivalence agreements. By reducing regulatory barriers, IRC can foster international trade, investment, and economic integration, creating new opportunities for businesses and consumers alike.
International regulatory co-operation
In today’s interconnected world, policy problems often have origins and impacts beyond national borders. Regulatory responses made in isolation can lead to inconsistent or conflicting rules that create barriers to innovation, trade, and investment, while impeding effective responses to global challenges such as climate change, public health crises, or financial stability. International Regulatory Co-operation (IRC) can help policymakers drive results by promoting regulatory approaches that work within and across national boundaries.
Key messages
IRC enables policymakers to develop coordinated responses, share knowledge and best practices, and ensure that regulations are mutually reinforcing across countries. By promoting policy coherence and alignment, IRC can help countries achieve better outcomes and enhance the overall effectiveness of their regulatory frameworks in addressing global challenges. The OECD works with countries to identify opportunities for IRC in key policy areas and to develop best practices and guidance for effective cooperation, supporting policymakers in driving results beyond traditional borders.
IRC is a powerful tool for promoting learning and the sharing of best practices among countries and international organisations. The OECD plays a leading role in this regard, notably through the Partnership of International Organisations for Effective International Rulemaking (IO Partnership). The IO Partnership brings together the secretariats of 50 international organisations to promote greater quality, effectiveness, and impact of international rules and standards. These efforts help to disseminate good practices, foster mutual understanding, and build the necessary capacities for effective IRC, enabling policymakers to drive better results.
Context
Explicit whole-of-government IRC strategies are gaining momentum
An increasing number of jurisdictions are adopting explicit whole-of-government strategies or legal frameworks to promote and guide IRC activities. As of 2020, 23 out of 38 countries had a full or partial strategy on IRC, compared to only 9 in 2017. These strategies often set out clear objectives, priorities, and governance arrangements for IRC, helping to ensure a more coherent and systematic approach across different sectors and levels of government. The adoption of such strategies is a positive development, as it reflects a growing recognition of the importance of IRC and a commitment to strengthening cooperation with foreign regulators. However, there is still room for improvement, as a legal requirement does not ensure IRC occurs in practice and many jurisdictions have yet to develop a comprehensive IRC strategy or legal framework.
The use of international instruments in domestic rule-making is accelerating
There is a growing use of international instruments – such as standards, guidelines, or recommendations – in domestic rulemaking processes. The number of jurisdictions with a formal requirement to consider international instruments when developing new regulations has increased for all countries since 2017. This trend reflects a growing awareness of the benefits of aligning domestic regulations with international norms and best practices to reduce trade barriers, facilitate market access, and promote interoperability. However, the data also reveals that not all jurisdictions have such formal requirements in place, suggesting that there is still scope for further progress in this area.
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