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"Overly Restrictive Regulations Effectively Shut Out Producers"

This week, an op-ed in Crain’s New York Business from United States Trade Representative Ron Kirk explaining how the Obama Administration is working to break down “behind-the-border” trade barriers, helping to increase U.S. exports, boost economic growth for American companies, and support well-paying jobs here at home. 

Overly Restrictive Regulations Effectively Shut Out Producers (Crain’s New York)
By Ambassador Ron Kirk

Tariff levels are generally falling around the world, but U.S. companies still face significant “behind-the-border” barriers, which typically take the form of complex, burdensome regulations and standards. The story of Tuthilltown Spirits of Gardiner, N.Y., illustrates the challenges to U.S. producers that want to export their merchandise overseas.

Ralph Erenzo and his partner, Brian Lee, run Tuthilltown Spirits, a Hudson Valley distiller with fewer than 20 workers. Tuthilltown makes Hudson Baby Bourbon—recently awarded a Double Gold medal at the San Francisco International Spirits Competition—from locally grown corn and uses special American Oak barrels in its innovative aging process, which takes less than six months to complete.

When Mr. Erenzo decided to expand sales to the European Union, he learned that a product sold there as whiskey must have been aged for at least three years. Removing the word whiskey from Hudson Baby Bourbon labels in the EU raises Tuthilltown's costs and forces the company to rely on word-of-mouth to educate European consumers about its products.

The EU's three-year aging requirement for whiskey essentially functions as a trade barrier that severely limits Mr. Erenzo's access to the EU market.

Tuthilltown Spirits is far from alone. Over the past few years, problematic foreign regulations and standards have had a negative impact on critical U.S. sectors—from food and agriculture to financial services and information technology.

President Barack Obama has made eliminating these obstacles to U.S. businesses a top priority.

The administration is pursuing new tools to prevent such barriers from being erected in the first place, while also ensuring that U.S. and foreign regulators can continue to protect the environment, the workplace, and public health and safety.

For example, we are working with the EU to promote better regulatory coordination, especially in emerging areas such as electric vehicles, energy efficiency and nanotechnology.

Through the nine-country Trans-Pacific Partnership negotiations and the Asia-Pacific Economic Cooperation forum, we are seeking to enhance transparency in the development of standards and regulations, to reduce unnecessary differences in product regulation and to encourage better, more centrally coordinated regulation principles.

We have also created cooperation councils to address unnecessarily divergent standards and regulations, which hamper trade within and from North America.

Additionally, we are making efforts to strengthen the World Trade Organization as a forum for the president's goals.

Tackling trade-related regulatory and standards issues is critical to increasing U.S. exports, boosting economic growth, creating more jobs at home and enhancing our country's competitiveness in the 21st century. Our efforts can make a big difference for businesses like Tuthilltown Spirits and enhance America's ability to build a more prosperous future.

U.S. Trade Representative Ron Kirk is President Barack Obama's principal adviser and spokesperson on trade issues.