U.S. Regulatory Hypocrisy Hampers Trade

• Published in: The Wall Street journal Asia
• Main Author: By Pietro S. Nivola
• Format: Newspaper Article
• Language: English
• Published: Victoria, Hong Kong Dow Jones & Company Inc 16.05.1996
• Subjects: Alcoholism; Civil rights; Costs; Law; Litigation; Regulation; Trade disputes; US exports
• ISSN: 0377-9920

The Office of the U.S. Trade Representative has released its annual report on foreign regulatory policies that hurt American business abroad. Fair enough. The report, however, does not delve into U.S. laws that might create similar difficulties. You'd never know, for instance, that parts of the 1990 Clean Air Act were recently the subject of an international trade dispute -- and, more important, that the law's projected net annual costs to the U.S. economy exceed the estimated value of U.S. exports blocked by all of Japan's known import restrictions. The American economy is singularly unfettered. Nowhere else in the industrial world is it easier to set up a discount store, start a new airline, or shrink a payroll. But alongside economic deregulation has come ever-expanding social regulation. In the U.S., American entrepreneurs face a profusion of legal fine points and perils different from, but not necessarily less exacting than, the regulatory rigors in other places. In key areas, the scope and stringency of the American regulatory state are second to none. Consider pollution abatement. U.S. regulators force larger investments by manufacturers in America than virtually anywhere else, including such "green" societies as Germany, Holland and Japan. Thus, the Trade Rep's Office protests restrictions on sales of American vehicles in Japan and South Korea. Regulations in those countries are indeed a problem for American companies. But so are U.S. environmental laws that sock car manufacturers in the U.S. with a pollution-control bill much steeper than that borne by auto makers in Japan.