*This post is part of a symposium on Modernizing Regulatory Review. For other posts in the series, click here.
The contributions to this symposium illuminate many important aspects of the Biden Administration’s push to “modernize” regulatory review. One big innovation of that push is injecting international considerations into that process more than ever before. Executive Order 14,094 and the draft new Circular A-4 on regulatory analysis expand in meaningful ways previous executive efforts to better integrate the work of U.S. administrative agencies with the global regulatory environment.
The new instruments continue a shift that began under the Obama administration from highlighting efficiency as the objective of international regulatory cooperation to emphasizing its epistemic and global-welfarist advantages. Welfare is no longer framed in purely economic terms, and U.S. persons are not the only ones whose welfare counts. Rather, the new measures’ concept of welfare also encompasses the impact of U.S. regulation on global problems like climate, health and security—and on foreign individuals.
These innovations come at a moment in which the Supreme Court is cracking down on administrative discretion. As I argue in a forthcoming article, the Court’s general skepticism toward the administrative state could potentially limit regulators’ freedom to look to the world in shaping domestic regulation, at least absent explicit congressional authorization to do so. That judicial approach is in tension with the executive’s effort through internal guidance to infuse domestic regulation with global considerations and encourage international regulatory cooperation.
From Efficiency to Global Welfarism
The words “international” and “global” each appear only once in the current Circular A-4, issued in September 2003 under President George W. Bush. The old Circular A-4 urges agencies to consider “[t]he role of Federal regulation in facilitating U.S. participation in global markets” when they decide whether regulation at the federal level is appropriate. “Harmonization of U.S. and international rules,” Circular A-4 currently provides, “may require a strong Federal regulatory role.”
The Bush version, then, conceived of international regulatory cooperation largely in terms of efficiency. Harmonization of U.S. regulatory regimes with international ones was desirable because it helps minimize inefficiencies due to diverging regulatory requirements on U.S. private actors that operate globally. Federal rather than state-level regulation was appropriate because the federal government is best placed to achieve harmonization across domestic and international regimes.
In the intervening two decades, the Obama and Biden administrations took important steps to nudge agencies to look to the world in order to advance policy goals beyond just efficiency. A major milestone was President Obama’s 2012 Executive Order 13,609 on promoting international regulatory cooperation. The Order reprises the efficiency and harmonization theme of the Bush era. “In some cases,” it provides, “the differences between the regulatory approaches of U.S. agencies and those of their foreign counterparts might not be necessary and might impair the ability of American businesses to export and compete internationally.”
Yet Executive Order 13,609 moves beyond standard harmonization. It also views international regulatory cooperation as an imperative given the problems facing humanity today. It therefore advocates for international regulatory cooperation as a strategy for better addressing “shared challenges involving health, safety, labor, security, environmental, and other issues.” There is also an epistemic element to it. The Order conceives of international regulatory cooperation as a vehicle for exposing U.S. regulators to different and possibly better regulatory approaches.
Executive Order 13,609 does not only articulate a policy favoring international cooperation. It also imposes specific requirements on agencies to explicitly address international cooperation in key regulatory documents. It tasks the Regulatory Working Group—established pursuant to the landmark Executive Order 12,866 on regulatory planning and review and chaired by the OIRA administrator—with coordinating and advancing international regulatory cooperation across the administrative state. The Working Group has issued guidelines for the implementation of Executive Order 13,609.
President Biden took at least two major steps to increase the prominence of international considerations in domestic regulatory work further. One focuses on climate. Biden’s 2021 Executive Order 13,990 requires agencies to consider global climate impact in devising federal regulations and revives a mechanism for quantifying that impact.
The other—the draft revision of Circular A-4—is trans-substantive. Like the existing Circular A-4, the draft cites standard harmonization across global and domestic markets as one key interest that agencies should consider when they review regulation. But it goes significantly beyond the Bush-era version by reiterating and expanding key elements of President Obama’s Executive Order 13,609.
Like Executive Order 13,609, the draft revision of Circular A-4 advises agencies to analyze “the foreign effects of a regulation … when such analysis would help inform cooperative efforts with foreign regulators that aim to … meet shared challenges.” It doesn’t stop there, however. The draft also adds specific instructions for agencies to consider the impact of regulations on noncitizens abroad in certain contexts. Agencies should do so, for example, when they gauge impact on U.S. national interests like foreign policy and national security. Or when they regulate the global effects of an externality in a way that “supports a cooperative international approach”. Or, notably, when “international or domestic legal obligations require or support a global calculation of regulatory effects.”
As Dan Farber observes, draft Circular A-4’s emphasis on international considerations “is not pitched in equity terms, and no one really expects U.S. regulatory agencies to view helping the global poor as central to their missions.” It appears to be driven by a pragmatic view of what is necessary to secure U.S. interests in today’s world. Nonetheless, it is an important milestone in the expansion of the scope of regulatory analysis from an efficiency-focused domestic endeavor to one that views promoting global welfare as a key objective. Even if it is for realist rather than altruistic reasons.
The Biden administration’s proposed revision to Circular A-4 pushes agencies to consider international effects and international obligations, and it encourages them to engage with foreign counterparts and international regulatory organizations. It communicates that many of the hardest problems facing regulators today are collective, global problems that must be met with international cooperation and greater attention to the foreign externalities of U.S. regulation.
Whether this is good depends on one’s priors about the role of U.S. regulators and whose welfare they should promote. I will not focus on the normative assessment here. Rather, I wish to make three observations about implementation.
The first point is that we know very little about how agencies have implemented the previous executive directives on international regulatory cooperation. Lofty policy declarations are one thing, but have they made a difference? Did Executive Order 13,609 really increase the profile of international considerations in agencies’ day-to-day work? Did it actually lead to greater international regulatory cooperation through information sharing, exchange of drafts, scientific collaboration, pilot programs, or alignment of regulatory requirements? Or was the policy simply a reflection of pre-existing practices within the administrative state that the White House sought to elevate and own because it suited its broader internationalist agenda? It would be difficult to assess the potential impact of the expanded requirements related to international cooperation and impact assessment in the proposed Circular A-4 without knowing the answers to these questions. A new ACUS study I will be advising together with Kathleen Claussen and David Zaring will hopefully provide more clarity.
The second point is a familiar one. Much has been written about measurement and quantification problems in regulatory cost benefit analysis. Rachel Rothchild’s contribution to this symposium considers one subset of quantification problems related to measuring costs and benefits that materialize over long timespans, and there are many, many more. These same problems arise, perhaps with even greater force, when regulators are asked to quantify global harms and consider impact on noncitizens. The variables are nearly endless, and costs and benefits to security, health, the environment, and other values that the Circular A-4 draft contemplates are extremely vague.
A final point relates to the broader legal environment in which these intra-executive policy innovations are being promoted. As I argue elsewhere, extant administrative law gives agencies substantial freedom to regulate with the international environment in mind, even absent explicit statutory authority to incorporate international considerations into domestic regulation. The thrust of the recent executive efforts to encourage recourse to international considerations and cooperation aligns with this existing status quo. However, the Supreme Court’s skepticism of the administrative state and its use of doctrines like major questions to limit agency power may change this. If that happens, it may create obstacles for this executive policy and complicate successful implementation of the international elements of the new Biden measures.
The Biden administration’s push to modernize regulatory review puts a thumb on the scale in favor of internationalizing U.S. domestic regulation in meaningful ways. It continues the transition from an efficiency-focused view of regulatory analysis to a global-welfarist one. It is an important innovation, but one that is likely to face significant implementation problems not least because of the potential executive-judicial tension regarding unilateral agency recourse to international considerations.
Elena Chachko is an Assistant Professor of Law at Berkeley Law School. She was the inaugural Rappaport Fellow at Harvard Law School.