1. Illustrative practice

The legislative framework for reliance-based arrangements in the food safety sector has formally existed in many countries for over a century. In the USA, for example, it has long been a core regulatory principle that imports of certain products are only permitted from countries and production establishments that have been determined in advance to have food safety control systems that achieve the same level of safety as domestic regulation systems. ^{Footnote 6} This applies to imports of meat, poultry and egg products, shellfish and some dairy products, ^{Footnote 7} and it is administered by the Food Safety Inspection Service (FSIS) and Food and Drug Administration (FDA) within their respective areas of competence. Notably, pre-approval is only an initial regulatory hurdle for products seeking to enter these markets: such products are still subject to certification and documentary requirements, various forms of reinspection and testing at their ports of entry, as well as other approvals. The level of regulatory trust and confidence implied by equivalence-based pre-approval in the food safety context, then, is significant, but somewhat lower than it might initially seem.

The specific procedures and institutional structures for determining equivalence have changed considerably over the decades. In the USA, the earliest formulations of the principle merely permitted the relevant regulatory authorities to refuse entry to meat products from countries with regulatory systems found not to be equivalent, and prior to 1948 formal equivalence determinations were not published at all. ^{Footnote 8} The process was gradually institutionalised, however, over subsequent decades. ^{Footnote 9} In 1977, the Food Safety and Quality Service – renamed as the FSIS in 1981 – was created and took over responsibility for inspecting foreign establishments to determine whether or not they were “at least equal to” domestic US establishments as regards production safety standards. During this period, food safety systems principally relied on regular inspection and testing of production facilities by public authorities, and as a consequence equivalence determinations also relied heavily on the conduct of on-site inspections and testing abroad. This significantly limited the practice: over the 1980s, the FSIS had inspection officials stationed in only eight overseas jurisdictions, though in 1988 the process was revised considerably to rely more heavily on port-of-entry inspections and past audit results.

Important changes to the system occurred from the 1990s onward, and it is here that the modern story really begins. This was a decade in which the USA’s regulatory approach to food safety management began a long and incremental transformation in the direction of risk-based regulation. This occurred in part as a response to a number of high-profile cases of foodborne illness, but it was also part of a much broader turn towards risk-based approaches that began to be adopted across many regulatory domains at around the same time. The turn to risk-based regulation meant, first, that the focus of regulatory attention was expanded, so as to include not just final products and production facilities but the entire production cycle from farm to market. Second, and as a consequence, it also entailed a turn to risk management – that is to say, approaches that relied less on discrete inspection points and procedures and rather more on the development of comprehensive systems and protocols for managing risk at all points throughout the production chain, using the principles of risk analysis and process control. The governance protocol developed for these purposes was the Hazard Analysis and Critical Control Point (HACCP) model, which, famously, has since been adopted as standardised practice across most developed country agrifood markets and production networks. Third, and again as a consequence, this meant that regulators increasingly relied on internal control systems designed and implemented by producers themselves. In line with broader regulatory trends occurring at the same time, the new regulatory approach reconfigured the relative roles of producers and regulators, with the former responsible for establishing and implementing a plan for managing risk at all points throughout the production chain and the latter taking on the role of overseeing and ensuring its adequacy.

The shift towards risk-based approaches had important implications for practices of equivalence, not only changing the nature of equivalence assessments but also helping to provide the enabling conditions for equivalence relationships with a greater number of foreign jurisdictions. Where, in earlier decades, equivalence had been based largely on the results of on-site inspections and testing in foreign establishments, the new regulatory paradigm necessitated a much more comprehensive assessment of the entire food control system in place in a foreign country. The scope of the FSIS’s equivalence assessment process was accordingly broadened significantly over the 1990s to include, for example: “country laws and documents related to program implementation; records of establishment operations, inspection results, and enforcement activities; chemical residue controls from farm to slaughter; microbiological and chemical testing programs; laboratory support, sampling programs, and sampling and testing methodologies; and other U.S. import requirements such as pathogen reduction and HACCP program”. ^{Footnote 10}

The new approach helped to enable and prompt greater reliance on foreign regulatory systems in a number of ways. For one thing, the rapid spread of HACCP-based governance technologies in transnational agrifood production networks, alongside concerted efforts to harmonise and disseminate best practice risk-based approaches amongst regulators in the most significant agrifood markets, helped to provide a degree of familiarity and commonality between food safety systems in different jurisdictions. ^{Footnote 11} Just as importantly, the new regulatory approaches reconfigured the role of regulatory authorities – now acting primarily as guarantors and overseers of safety control systems designed and implemented by private firms – and in doing so prompted regulators to develop technologies for assessing governance quality and to build confidence in their reliability. It is a relatively short step from there to the assessment of foreign regulatory systems: in both of these cases, food safety regulators take on a role of establishing and verifying compliance with best risk management practices, as well as assuring the quality and reliability of governance carried out by others. Indeed, their ability to work at a distance is one of the great advantages of risk-based regulatory approaches, and it is key to their position as a crucial governance technology enabling the transnationalisation of the agrifood sector.

Accordingly, the number of foreign jurisdictions subject to, for example, an FSIS equivalence determination with respect to meat, poultry or eggs has gradually increased since the 1990s, with seventeen having at least one approved establishment in 2002, rising to around forty at present. More than fifty determinations are currently listed as pending. ^{Footnote 12} Of those, almost all are in the Americas or Europe, with one from the African continent, one from the Middle East, four from East and South-East Asia, as well as Australia and New Zealand. For its part, the FDA did not determine food safety system equivalence prior the enactment of the Food Safety Modernization Act 2011. However, it has recently concluded its very first equivalence determination, in the context of an agreement with European counterparts relating to the mutual equivalence of inspection and control systems for shellfish. ^{Footnote 13}

The procedure for determining equivalence can be lengthy and involved, often taking many years and involving a number of steps. ^{Footnote 14} An initial documentary stage, in which the exporting country reports in detail on the structure and operation of its food control systems, is typically followed by an on-site verification audit of implementation capacity, involving visits to foreign government offices, exporting establishments and laboratories. The assessment is focused at least as much on the governance capacity of foreign regulatory systems – including especially the capacities to prevent, detect, identify and rapidly respond to food safety incidents – and its interoperability with US systems as it is on its substantive similarity with US law and practice. Evidently, the process is relatively one-sided in the sense that the onus is on the petitioning exporting country to demonstrate the reliability of its inspection and control systems. This can involve a degree of adjustment of the exporting country’s regulatory systems and practices to the satisfaction of US authorities. ^{Footnote 15}

Food safety equivalence practice in a number of other jurisdictions shares similar features to the US practice just described. ^{Footnote 16} In the EU, pre-authorisation of countries and establishments is required for live animals, most products of animal origin, seafood and some plant products. ^{Footnote 17} As in the USA, approval is a necessary but not sufficient condition for importation: imports from eligible countries and establishments are still subject to a range of documentary checks, physical inspections and veterinary inspections. The application process is initiated by a third country by request to the European Commission, and this is followed by a process of detailed documentary review based on written responses to a questionnaire, as well as (in most cases) an on-the-spot inspection by relevant European authorities. The factors taken into account are broadly similar to those mentioned above: the governance capacity of the foreign regulatory system, including its level of resources, the training of staff, the nature of routinised procedures; actual hygiene conditions throughout the supply chain; prior experience with imports of products from that country; the assurances that are given by the third country regarding compliance with EU requirements; the mandatory implementation of HACCP-based control systems in all facilities; and so on. Furthermore, approval itself is not necessarily an all-or-nothing matter: approval may be made subject to specific additional commitments or qualifications, relating, for example, to certification requirements, particular territorial restrictions, additional treatment or vaccination programmes, exclusions and so on. These bilaterally tailored requirements are memorialised in the relevant EU regulations and updated as appropriate.

It is important to note that equivalence is not the only modality of regulatory reliance that has been adopted in the food safety context. Another, more recent modality is that of “systems recognition”. Unlike the equivalence arrangements just described, systems recognition arrangements are not prerequisites for importation, but rather mechanisms by which regulatory authorities in two jurisdictions can mutually agree to subject bilateral trade to more streamlined procedures, less stringent testing and inspection and reduced auditing requirements based on an assessment of the reliability of their respective regulatory infrastructures. They are a relatively recent innovation, and they have been analysed by some as illustrative of a paradigmatically new modality of regulatory cooperation. ^{Footnote 18}

In the USA, systems recognition was introduced as part of a broader reorganisation of the US food safety system initiated by the Food Safety Modernization Act 2011 (FSMA). In part to encourage a more efficient and flexible use of limited regulatory resources and in part to remove unnecessarily duplicative regulatory processes and facilitate bilateral trade, the FSMA formally authorised the FDA to rely on foreign regulatory systems as appropriate in fulfilling its mandate. This was followed in 2012 by Executive Order 13609 explicitly promoting international regulatory cooperation across government, including in the food safety context. ^{Footnote 19} Pursuant to this mandate, the FDA has concluded what it calls systems recognition arrangements (SRA) with regulatory counterparts in New Zealand (2012), Canada (2016) and Australia (2017). ^{Footnote 20} These arrangements are non-binding understandings concluded directly between regulators, and the FDA is careful to distinguish them from “equivalence” properly so called. ^{Footnote 21} Unlike equivalence decisions, they are reciprocal agreements, not unilateral determinations. But like equivalence assessments, they are preceded by extensive evaluation by each partner of the other’s regulatory system, including both desk review and on-site inspections. This assessment includes, according to the FDA, an assessment of the capacity of each other’s regulatory systems to learn and adapt over time: “[s]ystems recognition assessments focus not only on the ability of food safety systems to help ensure food safety, but also on the ability of food safety authorities to identify, address and contain food safety issues and outbreaks that may arise, learn from past events and strengthen the system over time”. ^{Footnote 22}

Just as in the equivalence context, the conclusion of an SRA is not a one-off process, but instead establishes conditions for regular interactions. SRAs envisage the establishment of mechanisms for the exchange of confidential information necessary for ongoing regulatory cooperation, as well as mechanisms for notification and case-by-case resolution of specific food safety issues as they arise. They provide for mutual monitoring, periodic reassessment and mutual audits, as well as the possibility of additional follow-up assessments wherever there is a significant change to the level of food safety control in either jurisdiction. They record the intention of the parties to consult in advance on any changes that may affect the relationship. They also envisage ongoing collaboration on audit and inspection activity, including the sharing of results. ^{Footnote 23}

Little is said in the SRA itself about the consequences that flow from the determination of mutual comparability, aside from simply noting that systems recognition “allows for” greater mutual reliance and “may result” in reductions in the type and frequency of verification activities. More detail is found in a policy guidance document issued by the FDA in June 2022. ^{Footnote 24} This document makes clear that the FDA will not “prioritise” foreign establishment inspections in countries with which it has an SRA, except in response to a specific cause or request or for matters outside the scope of the arrangement. In addition, it will adjust its screening and targeting criteria for imports to reflect the reduced risk associated with imports from such jurisdictions, and it will not prioritise import samples and field examinations of food products covered by an SRA.

Although the EU, for its part, does not conclude systems recognition agreements as such, it does have a long-standing practice of concluding Veterinary Agreements with selected trade partners, which have a somewhat similar function. It currently has fifteen such agreements, with the first concluded with New Zealand as early as 1996. ^{Footnote 25} Some of these agreements – such as those with Switzerland, Andorra, San Marino and Liechtenstein – eliminate virtually all certification requirements and border inspections in respect of the regulations covered, but they are predicated on the trade partner largely agreeing to align its plant and animal health and food safety rules with those of the EU. They are typically concluded with closely associated countries in the European space. Others, however – such as those with New Zealand, the USA, Canada and others – are predicated on a lesser degree of alignment and are more relevant to this study.

These latter agreements set out an agreed framework for the initiation and conduct of equivalence and adequacy determinations. This includes setting out the main procedural steps to be followed, as well as the elements of foreign food safety systems that are relevant to an equivalence assessment. They also memorialise equivalence determinations: that is to say, those measures that have been recognised as equivalent or otherwise conditionally adequate are listed in an annex to the agreement and updated as needed. For products covered by such equivalence determinations, bilateral trade is streamlined: the frequency of physical border checks is significantly reduced, though not eliminated, and simplified veterinary certification procedures are applied, involving the recognition by the importing country of certificates issued by the exporting country. Importantly, also, these agreements provide for ongoing monitoring of each other’s regulatory systems in order to maintain mutual confidence in the arrangement. This includes provision for periodic audit and verification of each other’s control programmes, as well as risk-based frontier checks. Finally, they establish mechanisms for routine dialogue and information exchange, requiring notification of significant changes to health status, providing opportunities to consult on proposed regulatory changes and promoting scientific exchanges. ^{Footnote 26}

What we see in SRAs and veterinary agreements, then, in a similar but more developed manner to pre-approval equivalence practice, is the adoption of highly tailored reliance arrangements, in which regulatory resources and burdens are carefully calibrated to qualitative assessments of the governance capacities and risk profile of specific foreign jurisdictions. The deference arrangements that are established under them are flexible and indeed in principle readily reversible, and they are operationalised largely at the level of regulatory practice rather than rigid rule.

2. Key challenges in the implementation of reliance arrangements

Reliance arrangements of one type or another, then, underpin a substantial amount of global agrifood trade, and they are an established and important part of the regulatory architecture of global food trade. Although historically grounded in quite rigid equivalence requirements, which are probably best understood as impediment to trade, the last decades have seen experimentation with more flexible instruments of regulatory reliance as techniques, and frameworks, for market liberalisation. Indeed, a number of major agricultural exporting nations have begun to see reliance arrangements as central tools for facilitating access to markets with key trade partners. ^{Footnote 27} In that context, it is worth setting out some of the attractions of flexible reliance arrangements as techniques of liberalisation, from the perspective of regulators themselves.

When compared to most other mechanisms typically used to address regulatory barriers in projects of economic integration (eg harmonisation or binding treaty-based regulatory disciplines), reliance arrangements involve relatively little loss of regulatory freedom. That is to say, they represent a mechanism of liberalisation that entails relatively few upfront and irreversible legal commitments, which maintains a high degree of regulatory discretion and which is consistent with political demands for regulatory “autonomy”. Furthermore, given their relatively easy reversibility in principle, reliance arrangements can present less of a risk for regulators than more permanent or rigid instruments, providing regulators the possibility of dynamically changing the arrangement in response to evolving risks. In addition, as noted above, they offer regulators a highly differentiated instrument of liberalisation: they can be as narrow or as broad as regulators are comfortable with, and they can broaden over time as levels of comfort and trust increase. Taken together, these factors suggest that such arrangements are a means for regulators to respond to demands for the reduction of regulatory burdens and the liberalisation of markets, with fewer risks and constraints than at least some other available mechanisms.

That said, they are far from perfect, and most stakeholders would agree that there is considerable room for improvement in their operationalisation.Footnote ²⁸ Four specific difficulties are worth highlighting here.

3. International governance

I turn now to examine the international governance architecture that has incrementally emerged alongside practices of regulatory reliance of this kind in the food safety sector since the 1990s. What does this architecture do, and how adequately does it do it? In particular, how well placed is it to address the four key difficulties and challenges just enumerated?

At the multilateral level, one of the key institutions is the WTO, which has worked to facilitate equivalence arrangements in the food safety context in particular through its Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). ^{Footnote 33} This agreement provides an agreed framework of normative principles – albeit a somewhat rudimentary one – governing the conduct of equivalence assessments and the making of equivalence determinations. Article 4 of the agreement provides, for example, strong and specific encouragement to Members to enter into equivalence arrangements: “Members shall accept the sanitary or phytosanitary measures of other Members as equivalent … if the exporting Member objectively demonstrates to the importing Member that its measures achieve the importing Member’s appropriate level of sanitary or phytosanitary protection”. It further provides that that Members “shall, upon request, enter into consultations with the aim of achieving bilateral and multilateral agreements on recognition of the equivalence of specified sanitary or phytosanitary measures”. Furthermore, and just as importantly, all of the core regulatory disciplines of the SPS Agreement apply to equivalence determinations and associated practices. ^{Footnote 34} As a result, such practices must be, for example, non-discriminatory and even-handed, scientifically justified, based on international standards where they exist and are appropriate (including those noted below), no more trade-restrictive than required, timely and transparent. ^{Footnote 35}

It is fair to say that, on their face, these rules provide the foundations of an adequate normative framework for reliance arrangements. The non-discrimination provisions, as well as those relating to the requisite objective evidentiary basis of reliance practices, in principle are especially suitable for addressing some of the challenges noted above – namely, those related to the politicisation of deference arrangements and discrimination in the choice of jurisdictional partners. The provisions relating to the timeliness of decision-making can also address the sometimes significant problems of delay and deferral that can affect the costs associated with equivalence and related processes.

Nevertheless, it is generally acknowledged that this legal framework has been hard to operationalise. With relatively minor exceptions, ^{Footnote 36} Members’ SPS equivalence practices have not been the subject of WTO dispute settlement, and these provisions have not been extensively judicially interpreted. (Disputes are even less likely now, given the state of disrepair in which WTO dispute settlement currently finds itself.) WTO Members have complained about the low levels of implementation of the agreement as it relates to equivalence. ^{Footnote 37} Developing countries in particular have expressed concern about their inability to benefit from equivalence arrangements in major export markets, and they have actively sought to operationalise the WTO’s legal framework in this area through the work of the WTO’s SPS Committee. A number of proposals for strengthening this framework have been made in the context of reviews of the SPS Agreement. ^{Footnote 38}

The WTO’s SPS Committee – part of the extensive administrative (non-legislative) infrastructure of the WTO system tasked with the operationalisation and oversight of the SPS Agreement – has equivalence as a standing item on its agenda, and it has conducted a number of different activities under that item, with varying levels of success. For example, it receives and collates notifications from Members on equivalence determinations, though there are few tangible costs for Members of failing to notify, and it is generally understood that these notifications capture only a small proportion of actual practice in the area. ^{Footnote 39} The Committee has heard from Members wishing to share their experience of negotiating equivalence arrangements and has organised a thematic session on equivalence for the purposes of information sharing and knowledge building. ^{Footnote 40} Probably the Committee’s most significant work, however, has been its Decision on the Implementation of Article 4, adopted originally in 2001 and updated a number of times since. ^{Footnote 41} While the normative content of this document is relatively rudimentary, it nevertheless does succeed in elaborating some additional principles for the conduct of equivalence assessments. It notes, for example, the respective responsibilities of the importing and exporting member as regards the provision of information, the clear establishment of the level of protection and duties of scientific evaluation and explanation. It notes that ongoing equivalence processes should not in themselves interfere with existing trade flows, and it provides further that equivalence determinations can and should take into account historical bilateral trade flows. It notes, albeit in hortatory terms, the importance of technical assistance in this area, and, importantly, it specifically urges the three standard-setting bodies in the areas of food safety (Codex Alimentarius Commission; CAC), animal health (World Organisation for Animal Health; WOAH) and plant health (International Plant Protection Convention; IPPC) to elaborate guidelines on equivalence agreements and to keep the SPS Committee informed regarding the progress of this work.

The standard-setting organisations have responded to this call.Footnote ⁴² The IPPC, for example, developed “Guidelines for the determination and recognition of equivalence of phytosanitary measures”, adopted as ISPM24 in 2005 after a relatively short period of deliberation. ^{Footnote 43} This document specifically addresses the equivalence of individual measures (rather than systems equivalence or combinations of measures). The WOAH developed a new chapter of its Terrestrial Code, adopted in 2003, providing a framework for equivalence determinations of a variety of different kinds (measure, programme and system/infrastructure) in the context of animal health regulation. ^{Footnote 44} In a separate but related initiative, it has also established a framework for the cross-border recognition of “disease-free zones” to facilitate continued trade even in the context of an outbreak of infectious disease.Footnote ⁴⁵ The CAC has been particularly active, producing three texts that explicitly reference equivalence in 1997, ^{Footnote 46} 1999 ^{Footnote 47} and 2003, ^{Footnote 48} with more under development. ^{Footnote 49} These documents have themselves been cross-referenced with approval in revisions to the SPS Committee’s Decision on equivalence, such that the normative influence of work in each body flows both ways. ^{Footnote 50}

These documents aim incrementally to set out an agreed framework for equivalence (and similar) determinations at the bilateral level, drawing on WTO law but also recursively influencing it to facilitate their greater use. They do this in at least four ways. First, they establish a set of general normative principles that govern the conduct of equivalence determinations. These general principles overlap considerably with those derived from WTO law, though they also draw from other texts, such as the IPPC itself. These documents establish, for example, that equivalence processes must be non-discriminatory, based on risk analysis, technically justified, have minimal impact on trade and be timely, consistent, transparent, objective, accompanied by adequate information exchange and promptly modified as new evidence emerges. They can and should be based on all relevant information, including prior experience of bilateral trade, prior knowledge of foreign countries’ systems and the specificities of foreign conditions. Equivalence processes, therefore, not only can be but ought to be tailored to the specific conditions of different foreign territories. ^{Footnote 51} They re-assert the core principle that an importing country has the right to determine its own appropriate level of protection.

Second, these documents establish certain procedural principles and an indicative sequence of steps for the conduct of equivalence negotiations. For example, they allocate the respective responsibilities of importing countries (as regards the initiation of an application, the provision of sufficient information and access to facilities) and exporting countries (as regards the provision of reasons, ensuring clarity of standards and requirements and so on). They note the utility of pilot studies, as well as the need for continual post-determination verification and review, as well as exchange of information.

Third, they compile checklists of factors that authorities may wish to consider before entering into equivalence negotiations and while conducting an equivalence assessment, as well as issues that ought to be addressed in equivalence agreements themselves.

Fourth, they seek to establish their own international standards as an important indicator of governance quality, noting that equivalence determinations ought to be facilitated where regulatory systems conform to international standards. For example, the CAC cross-refers to its Guidelines for National Food Control Systems as well as its Principles for Food Import and Export Inspection and Certification. ^{Footnote 52} This is important: alignment with international standards of good regulatory practice clearly is imagined to provide a basis for confidence in the governance capabilities and capacities of foreign food safety authorities and systems and therefore to facilitate mutual reliance between regulators across borders. In this sense, these international standards-setting bodies can be understood to be taking on a supporting role in assuring the quality and credibility of domestic governance systems. In one (unusual) case, the WOAH has gone a step further, by establishing a procedure for the international recognition of disease freedom for six specific diseases.Footnote ⁵³ This procedure has been well used, and a number of export-oriented developing countries have argued for its greater use in domestic recognition processes. ^{Footnote 54} In their view, where a safe area is established in conformity with international standards, importing states should have limited flexibility to refuse recognition. But the point has been controversial amongst the major importing markets.

Taken together, then, the “three sisters” standards-setting bodies are playing an active role in pragmatically supporting, encouraging and facilitating equivalence arrangements in the food safety sector. That said, while this work is important, most would agree that it remains under-developed. The normative framework for equivalence set out in international guidance is couched in very general terms and still leaves considerable room for discretion and differential treatment in the conduct of equivalence assessments. The incentives for states to conform strictly to the requirements of international standards, furthermore, can often be weak in practice.

Finally, it is important to note, especially in the context of this paper, the way that FTAs are increasingly being used to help establish and consolidate reliance arrangements of the sort just described. Sometimes, for example, equivalence determinations themselves have become matters of interest in FTA negotiations. A number of the USA’s FTAs contain side agreements according to which the foreign trade partner agrees to recognise US food safety systems as equivalent to theirs. ^{Footnote 55} For example, in a 2006 side agreement to the US–Panama FTA, Panama recognizes, among other things, that the US food safety inspection system for “meat … poultry, and products thereof is equivalent to Panama’s inspection system for those products”, and therefore agrees not to require certification of individual US establishments by Panamanian authorities and to accept certain Export Certificates issued by US authorities as sufficient to authorise importation and sale in Panama. ^{Footnote 56} Similar side agreements accompanied US agreements with Colombia ^{Footnote 57} and Peru. ^{Footnote 58} These constitute binding agreements between the parties and thus give some degree of rigidity to the arrangements, though it is worth noting that these agreements can and have been updated and modified on a number of occasions through a further Exchange of Letters, and in no case are the relevant obligations subject to FTA dispute settlement. Additionally, during the negotiation of the Trans-Pacific Partnership – which ultimately was concluded as the CPTPP without US participation – the USA negotiated four side agreements with Chile, Canada and Vietnam regarding similar issues, though with less substantial content. ^{Footnote 59} Similarly, while the EU’s earliest Veterinary Agreements were concluded outside the context of a larger trade agreement, and some continue to be, most are negotiated with partners where such a deal exists and some are directly incorporated into larger trade deals. The 2002 agreement with Chile, for example, is an annex to its agreement with the EU. ^{Footnote 60} The Canadian agreement started life independently, but subsequently has been incorporated into the larger trade relationship defined by the Comprehensive Economic Trade Agreement (CETA). ^{Footnote 61}

Perhaps more importantly in the present context, FTAs increasingly include provisions establishing the institutional structure necessary for building and supporting bilateral regulatory reliance arrangements. It was already noted in Section I that the inclusion of horizontal “regulatory cooperation” chapters is an important and much-discussed feature of the latest generation of FTAs. The SPS chapters of new FTAs are also part of this trend. These chapters vary in form and detail, but increasingly they include provisions performing many of the same functions as described above: setting out an agreed framework of procedures and principles governing future equivalence determinations; providing for mutual audit and inspection of facilities to maintain confidence in each other’s systems; establishing a specialised committee for ongoing dialogue and information exchange; provide for notification of and an opportunity to comment on proposed regulatory changes by the other party; and so on. Good examples of the state of the art can be found, for example, in the UK–Australia FTA, CETA, the USMCA and EU FTAs with Vietnam and Singapore. ^{Footnote 62} In most cases, these new bilateral and plurilateral treaty arrangements are in their infancy, and it is an open question as to how effective they will ultimately prove to be in facilitating cooperation around deference arrangements. But their contribution could be important, given the consistent message from exporters that having clear existing structures for communication and established inter-regulatory relationships can make a big difference in the resolution of interpretive and other issues that arise around equivalence and other deference arrangements.