U.S.-EU HIGH LEVEL REGULATORY FORUM MEETS IN BRUSSELS

UNCLAS SECTION 01 OF 05 BRUSSELS 001059

SENSITIVE BUT UNCLASSIFIED

SIPDIS

WHITE HOUSE FOR NSC (KVIEN, BELL) AND FOR OMB/OIRA
STATE FOR EUR/ERA KESSLER, PURL, WILLIAMS

E.O. 12958: N/A
TAGS: ECON ECIN ETRD ENRG ETRD ECPS SENV TPHY TSPL EUN
SUBJECT: U.S.-EU HIGH LEVEL REGULATORY FORUM MEETS IN BRUSSELS


1. (SBU) SUMMARY: EU and U.S. officials covered a packed agenda
during a well-attended High-Level Regulatory Cooperation Forum
(HLRCF) in Brussels on July 24. The European Commission hosted
this, the sixth HLRCF, gathering regulators from both sides of the
Atlantic to discuss regulatory cooperation, including new ideas and
advances, and to update private stakeholders on joint progress.
Presenters noted progress on issues such as risk assessment,
standards, and import safety, and examined regulatory issues around
energy technology cooperation and nanotechnology development. In
the afternoon, Business Europe hosted a public stakeholder session
featuring panel discussions on energy efficiency, counterfeiting and
consumer protection. END SUMMARY.

BACKGROUND
--------------


2. (SBU) This was the first Forum involving Obama administration
officials; the 12-member U.S. delegation from Washington, led by
Michael Fitzpatrick, Associate Administrator for OMB's Office of
Information and Regulatory Affairs (OIRA),was joined by 12 U.S.
Mission officials for discussions with over 25 European Commission
officials, led by Enterprise Director General Heinz Zourek.
Participants briefed on U.S. and EU regulatory reform efforts and
priorities, including new U.S. emphasis on openness and transparency
and consideration of recommendations for a new presidential
executive order on regulatory review, as well as continued EU
implementation of its programs on simplification and reduction of
administrative burdens.


3. (SBU) Participants reviewed ongoing work on impact assessment,
standards in regulation, risk assessment and import safety. Both
sides discussed regulatory issues around deepening energy technology
cooperation and efforts to address rapid nanotechnology development,
agreeing to prepare inventories/status reports on both issues for
the Fall Transatlantic Economic Council (TEC) meeting. Officials
also agreed to pursue another Forum meeting to be held just prior to
the Fall TEC. The officials briefed a large group of business and
consumer stakeholders in the afternoon on the discussions and
participated on issue panels.


4. (SBU) U.S. agencies represented included the Food and Drug
Administration (FDA),the Environmental Protection Agency (EPA),the
Department of Homeland Security/Customs and Border Protection (CBP),
the Department of Energy (DOE),the Department o H@mmitmenQf Americans and
to econity, all important elemeHLRCF agenda. He described the initial customary review of ongoing
regulatory actions at the start of a new Administration, and
outlined the regulatory review currently underway by order of the
President. He explained that OMB solicited public comments to
inform the development of its recommendations for a new presidential
Executive Order on regulatory review, eliciting 185 submissions from
the public. The recommendations are under review, with a new
Executive Order expected to be issued within the next few months.
Fitzpatrick emphasized, however, that while this broad regulatory
review runs its course, the Washington regulatory process was moving
"full steam ahead," with new proposals under development.

6. (SBU) Fitzpatrick stressed the Administration's commitment to
open government and transparency, highlighting a range of new Web
tools for the public to gain information about and participate in
the U.S. regulatory process. These include sites such as
www.regulations.gov , which contains over two million documents,
including proposed and final rules, public comments, and supporting
documents; www.business.gov, an official business link to the USG
which also hosts an online community for business to share
questions, answers, and best practices; www.data.gov, a searchable
site populated by data sets from across the USG and updated
regularly; and www.recovery.gov, which allows readers to track
stimulus and recovery act funds as they move through the system. He

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said the USG will continue to use the Federal Register process for
public comment purposes, but also noted the Administration's
groundbreaking use of blogs and other web-based technologies to get
input on the regulatory process from new and different stakeholders.
Fitzpatrick encouraged Commission interlocutors to participate in
U.S. public comment processes, saying these are open to all
stakeholders.

7. (SBU) Marianne Klingbeil, Director within the EU Secretariat
General responsible for impact assessment, provided an update on the
EU's Better Regulation drive. She said the Commission's
Simplification Program, a comprehensive program of simplifying
existing regulations, is one key component, complemented by the
Administrative Burden Reduction Program, with a goal of reducing the
costs to business of administrative burdens 25 percent by 2012. She
added that the Commission's online consultation is also open to
third country comments.

8. (SBU) Georgette Lalas, Director at DG Enterprise for consumer
goods, foods and pharmaceuticals, said that U.S.-EU cooperation on
pharmaceuticals, medicines and cosmetics regulation is strong. She
emphasized DG ENTR's good relations and frequent discussions with
the U.S. FDA in all of these areas. She added that the EU is
working to rationalize its current large number of auto safety
regulations. Lalas, whose division also covers the automotive
industry, also commented that cooperation with the National Highway
Transport Safety Administration is less active, despite the recent
conclusion of a Memorandum of Understanding.


9. (SBU) Bernd Langeheine, Director at DG Information Society for
electronic communications policy, reviewed DG INFSO's efforts to
facilitate ambitious EU plans to extend broadband coverage across
the 27 Member States and to help Member States manage their
transition (at different times) from analogue to digital TV
broadcasting. DG INFSO's goal is to keep Member States focused on
service and technology neutrality as a basic principle during this
transition. In this respect, he said, DG INFSO followed closely the
successful June analogue to digital switchover in the U.S. He also
updated participants on the EU's extensive telecoms reform package,
which has passed through much of the EU legislative process but will
undergo conciliation in the fall. When adopted, he said, the reform
will establish the "nucleus" of a single EU telecoms regulatory
authority that will take the EU another step toward a true single
market for telecommunications.

IMPACT ASSESSMENTS
--------------


10. (SBU) Klingbeil said that the EU is continually striving to
improve its impact assessment process, and reminded the Forum that
the EU evidence-based approach was applied "at the beginning of the
legislative process" and allowed policy makers in the Commission to
evaluate "different impacts with different options". She noted that
impact assessment guidelines were revised and improved in January

2009. She said that, though an impact assessment should be done on
major amendments under terms of an agreement with the European
Parliament (EP) and the EU Council (member states),this was not
always followed in practice. On quality control, Klingbeil said the
EU Impact Assessment Board sent back one-third of all impact
assessments done in 2008 because they were not good enough, and she
expected that record to improve.


11. (SBU) In terms of ongoing HLRCF initiatives, Klingbeil noted
continuing cooperation between OMB/OIRA and the Impact Assessment
Board. She said it would be interesting to explore further an
integrated approach to impact assessment that incorporates economic,
environmental, and social impacts. She added that it also would be
useful to compare notes on impacts on Small and Medium Enterprises
(SMEs),an area that needs more study, particularly given that SMEs
account for 95 percent of all EU companies. Finally, Klingbeil said
impact assessments and health might provide another area for U.S-EU
discussion and potential collaboration.


12. (SBU) Alex Hunt from OMB/OIRA provided an update on OMB's
request for public comments on draft guidance to agencies on the
type of analysis needed to assess international trade and investment
impacts. The draft guidance was released as part of OMB's 2008
draft Report to Congress on the Costs and Benefits of Federal
Regulation. In January 2009, OMB released the final Report to
Congress, in which OMB responded to the public comments on this
draft guidance. Although OMB received supportive public comment,
due to the pending change in Administration, OMB did not feel it
would be appropriate to formally incorporate the international trade

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guidance into Circular A-4 or other official agency guidelines.
Hunt said the process for developing a new Executive Order on
regulatory review might change the way U.S. impact analysis is
conducted. In the meantime, OMB has encouraged agencies to refer to
the discussion in the Report for a useful framework for satisfying
their existing obligations to consider the international impacts of
proposed and final regulations, and carefully evaluate concerns that
new U.S. rules could act as nontariff barriers. He agreed that the
U.S. would also be interested in looking at the impact of regulation
on SMEs.

STANDARDS
--------------


13. (SBU) On standards, Pedro Ortun, Director at DG Enterprise,
recalled that the October HLRCF had requested that the U.S. and EU
prepare papers on our respective uses of international standards in
regulation. He said the EU contribution would be finished in time
for a fall Forum. He noted that in the paper, the Commission will
examine different approaches to standards in regulation. He said
the Commission had just published a White Paper on ICT
standardization, the public comment period for which was nearly
finished. This would provide input into a Commission deep review of
standards. Ortun added that the Commission would discuss a draft of
this broader report at an October 14 conference in Brussels, with a
final version due early 2010.


14. (SBU) OIRA's Hunt said that the Department of Commerce has
drafted a paper on the role of standards in the rule-making process
and that an exchange of papers could promote mutual understanding.
He said the U.S. paper provides a detailed overview of the U.S.
regulatory process, the policy and legal context for the use of
standards in support of regulation and procurement, as well as the
various ways standards are referenced in U.S. regulations. Hunt
added that he looked forward to reviewing a Commission paper on
standards and said an exchange of views on the respective U.S. and
EU papers might be an agenda item for a fall HLRCF. Jonathan
Farnell of DG ENTR suggested that both sides should share their
papers in September, and prepare a cover note on similarities,
differences and challenges in their respective systems prior to the
fall Forum. Hunt agreed that a jointly drafted introduction to the
U.S. and EU papers on their respective approaches to standards would
be useful.

RISK ASSESSMENT
--------------


15. (SBU) Panagiotis Daskaleros of DG SANCO emphasized his
directorate's long cooperation with OMB/OIRA and the fruitful
dialogue between scientists on risk that has been underway since

2007. He noted that rising interdependence and globalization "means
we have to work together on risk, especially on new and emerging
technologies and the challenges that arise from them." Daskaleros
said SANCO and OMB agreed to work together on three broad areas
moving forward: exposure assessment, including how to incorporate
new technologies into the assessments; risk assessment terminology
and characterization; and emerging risks. (Note: The area of
emerging risks may include a joint analysis of past crises to gather
lessons learned from how those emerging risks were assessed and also
an evaluation of how we can use new state of art "avant garde"
technologies such as toxicogenomics and systems biology to inform
adverse effects in risk assessments. End note). Daskaleros said
collaboration should be guided by a commitment to avoid duplication
and should be forward looking, while learning from past experience.
OMB's Nancy Beck agreed with Daskaleros' comments, noting that U.S.
scientists are very enthusiastic about cooperation with Europe on
risk assessment.

IMPORT SAFETY
--------------


16. (SBU) Jeffrey Shuren, FDA Associate Commissioner for Policy,
briefed on FDA's expanding pharmaceutical joint inspection program
with the EU. He noted FDA's placement of officials in Brussels and
at the European Medicines Agency in London to facilitate deeper
cooperation, and FDA's plans to launch a similar exchange with the
European Food Safety Agency. He reviewed closer bilateral work on
drug development, orphan diseases, cosmetics and tobacco, and FDA
interest in increasing cooperation on medical devices as well, to
avoid duplicate inspections. Shuren stressed the Administration's
high priority on food safety, highlighted by the establishment of a

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cabinet-level working group on food safety and proposals for a
modernization of U.S. food safety laws. USEU CBP Attache David
Dolan reviewed CBP's increasing focus on import safety, noting joint
enforcement operations and work in the Joint Customs Cooperation
Committee (JCCC) and World Customs Organization (WCO).


17. (SBU) Ortun of DG ENTR lauded useful bilateral cooperation with
the Consumer Product Safety Commission on toy safety, including such
items as magnetic toys and childrens' books, and over testing
methods. Daskaleros of SANCO reiterated some of this, but also
commented on cooperation in the area of product traceability.

FUTURE DIRECTIONS IN REGULATORY COOPERATION
--------------


18. (SBU) Forum participants then turned to discussion of finding
common ground in regulation of emerging technologies such as new
energy technologies and nanotechnology. David Rodgers, Director for
Strategic Planning and Analysis, in the Office of Energy Efficiency
and Renewables at DOE, reviewed the increased funding ($45 billion
total) the USG is directing toward clean energy technology
development in the new budget and stimulus package. He pointed to
the June DOE rulemaking to phase out incandescent lightbulb usage in
the U.S. by 2012, which will save four quadrillion BTUs in U.S.
energy use. He highlighted key areas of cooperation with Europe,
including on development of biofuels, batteries and efficiency
standards. Jim Jones, of the Office of Prevention, Pesticides and
Toxic Substances at EPA, reviewed longstanding U.S.-EU cooperation
on the U.S. Energy Star efficiency standards program, and growing
cooperation on green building standards.


19. (SBU) Didier Herbert of DG Enterprise previewed the Commission
Green Paper, expected for the end of 2009, on promoting energy
technology development in the EU. This will be accompanied by a
strategic paper on innovation, he said. He discussed the EU
directives on ecodesign and efficiency labeling, which cover
lighting, motors, refrigerators and other products. He noted the
four drivers for the EU emphasis on new environmental industries: to
promote EU growth, innovation and competitiveness; to enhance
sustainability; as an exit strategy from the current economic
crisis; and to lead the way toward larger global solutions to
climate change and sustainability problems. John Farnell then
proposed, and Michael Fitzpatrick agreed, that both sides should
complete an inventory/map of bilateral energy technology performance
standards and areas of potential cooperation for the TEC, including
identification of areas for future cooperation.


20. (SBU) Sally Tinkle, of the National Institute of Environmental
Health Sciences at NIH, discussed the U.S. National Nanotechnology
Initiative, a 10-year old interagency group (27 agencies)
coordinating USG nanotechnology activity, including to: develop new
technologies for commercial and societal benefit; develop
nanotechnology infrastructure that encompasses standards,
terminology metrics and a skilled workforce; and ensure responsible
development of nanotechnology to maximize benefit and minimize risk
to public health and safety.


21. (SBU) Lalas of DG Enterprise explained that the Commission is
preparing a 2010-15 nanotechnology management plan. She said the
Commission had examined whether the existing EU regulatory framework
sufficed to manage emerging nanotechnologies, and concluded that
different sectors are doing adequate risk assessment. No single
framework can cover all sectors, she noted. That said, she
emphasized that the precautionary principle is particularly relevant
in the area of new technologies, noting that in the absence of
environmental and safety data, it would be difficult to approve
products. The EU needs to fine-tune existing legislation, not
completely overhaul it, she concluded.


22. (SBU) A DG Environment representative noted that cooperation
over nanotechnology approaches has been difficult, however, with
OECD work, for example, not keeping pace with the worldwide
dissemination of nanotechnologies. This cooperation seems limited
by industry and government resource commitments, he added. Farnell,
alluding to the precautionary principle issue, agreed that the
Commission sees some differences in U.S. and EU approaches, and
suggested that the HLRCF prepare a report for the TEC mapping and
identifying similarities and differences. Fitzpatrick agreed this
would be valuable.


23. (SBU) Finally, Farnell proposed that the Forum could prepare a

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report on how mutual recognition might help the overall goal of
increasing long-term U.S.-EU economic integration. He suggested
that a Forum paper discussing possibilities and constraints over the
use of mutual recognition for bilateral regulatory frameworks, could
be ready to present to the TEC by spring 2010. Hunt of OMB/OIRA
agreed this could be useful, suggesting that such a paper review the
history of Mutual Recognition Agreements (MRAs),and in particular
assess the lessons learned from previous U.S.-EU MRAs. Hunt also
suggested that the Forum should focus on specific sectors, since
this approach has generally been proven easier to negotiate and
implement. USEU EMIN Chase noted that some agencies had taken
potentially more useful, broader approaches, as with the Securities
Exchange Commission's notion of findings on "compatible regulatory
regimes". Farnell promised to provide the U.S. team a more detailed
proposal on the issue.

BRIEFING PUBLIC STAKEHOLDERS
--------------


24. (U) The afternoon of July 24, leading U.S. and EU Forum
participants briefed over 100 business and consumer stakeholders on
the morning's discussions. Hans Glatz, Chair of Business Europe's
U.S. network, welcomed the Forum participants, noting private sector
commitment to regulatory cooperation discussions and the TEC process
overall. Glatz stressed the value of these dialogues in promoting
joint U.S.-EU efforts to recover from the financial crisis and fight
creeping protectionism.


25. (SBU) In a novel approach to the HLRCF de-brief sessions,
business and consumer representatives then made panel presentations
on "Counterfeiting and Import Safety," and on "Regulatory Impacts on
Deployment of New Energy Technologies," with U.S. and EU officials
serving as respondents. Business reps, including Bill Kovacs,
Senior Vice President of the U.S. Chamber of Commerce for
Environment, Technology and Regulatory Affairs, emphasized the need
to strengthen IPR protection to fight counterfeiting, improve import
safety and promote energy innovation. Willemien Bax, Deputy DG for
the European Consumer Organization, said IPR enforcement efforts
should focus on dangerous products first, and supported development
of common standards to promote clean energy technologies.


26. (U) Michael Fitzpatrick, Associate Administrator for OMB's
Office of Information and Regulatory Affairs (OIRA),has not cleared
this cable.

CHASE