DEREGULATION
United States of America
OBJECTIVE
Actions in 1996:
Telecommunications
Previous Actions:
Transportation
Procurement
In April 1994, the SEC amended its rules so that more foreign issuers are eligible to use short form prospectuses and the shelf registration process. In addition, the SEC made significant changes to its rules on reconciling financial statements. By the end of 1994, over 100 foreign issuers took advantage of these regulatory enhancements and entered the US capital markets for the first time -- this was a record of new listings.
Actions in 1997
The Department of Agriculture (USDA) has implemented major provisions of the Agricultural Market Transition Act (AMTA) and other key elements of the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127) which was signed into law on April 4, 1996. AMTA removes Government authority to require producers to idle some of their land in order to qualify for Government payments. It provides for fixed payments in lieu of Adeficiency payments@ for several basic commodities. Only peanuts and tobacco remain subject to Government regulation of production or marketing and prices; however, price support levels for peanuts have been reduced. Both tobacco and peanut programs operate on a no-net-cost to the Government basis. Marketing allotment provisions which restricted domestic marketing of sugar under certain conditions have been eliminated, and other adjustments have been made in the sugar price support program including utilization of a more transparent formula to determine tariff rate quota (TRQ) levels for sugar imports based on forecast stocks to use ratios. Dairy price support levels have also been reduced, and will be eliminated by 2001. The USDA has also implemented new rules for the Conservation Reserve Program to emphasize the environmental benefits from the land retied under long-term contracts in this program and to shift productive cropland out of the program back into crop production where it is economically justified.
APHIS Deregulation.
Over the past year the Animal and Plant Health Inspection Service has concentrated on updating its import regulations to comply with the principles of transparency and equivalency contained in the World Trade Organization (WTO) agreement. APHIS has also revised its regulations to enhance trade opportunities by allowing additional articles to be imported into the United States. Particular examples from the past year include final rules that allow importation of Hass avocados from Michoacan, Mexico; pork from Sonora, Mexico, and beef from Argentina. APHIS is also working on a final rule that will align its regulatory and decisionmaking structure for cattle and swine and beef and pork product imports with WTO principles.
APEC economies will:
On February 8, 1996 President Clinton signed into law the Telecommunication Act of 1996. This important legislation spurs competition in all communications services by, among other steps, opening local phone markets to competition, setting conditions for regional phone companies to enter new markets, gradually eliminating price controls on large and mid-size cable systems, and establishing competition between telephone and cable companies.
Agriculture
On April 4, 1996, President Clinton signed into law the omnibus farm bill (PL 104-127). The farm bill marks a historic break from U.S. farm policies dating back to the 1930s by repealing a raft of government regulations. The bill replaces a system of "deficiency payments" with a system of fixed annual payments through 2003 and strips from the government the authority to require subsidized farmers to idle some of their land. The bill also drops requirements that a farmer devote a portion of their acreage to the same crop every year, phases out dairy price supports, and partially deregulates the sugar program.
Commerce
The Bureau of Export Administration (BXA), which administers and enforces U.S. export controls on certain commodities, software, and technical data that have both military and civilian uses, completely re-wrote their Export Administration Regulations (EARSs) in the past three years. The interim final rule was issued on March 25, 1996, and simplifies and clarifies a complex body of US regulations. It makes the EARs more user-friendly and is designated to
ensure that novice and veteran exporters alike can more easily locate those regulations which pertain to them. This effort also liberalized licensing restrictions which liberalizes an estimated $10 billion in computer technology exports.
Food and Drug Administration
The FDA has announced 36 reforms in the past year that will significantly cut drug approval times and streamline the pre-market clearance process for certain devices, including: eliminating prior approval of certain manufacturing changes for drug manufacturers; eliminating most environmental assessments that must now accompany drug applications; and, increasing the number of medical devices that do not need pre-market clearance. In addition, FDA is eliminating its lot release requirements for well-characterized drugs, which will generate significant cost savings and speed the development of drugs created through biotechnology without sacrificing safety.
The interstate deregulation effort was extended to interstate trucking on August 26, 1994 in PL 103-305. The regulatory barriers that are dismantled by this law will save shippers and consumers anywhere from $3 billion to $8 billion.
The Federal Acquisition and Streamlining Act of 1994, simplifies procedures for Federal purchase of commercially available goods, promotes the development of computer networks for conducting procurement electronically, and provides more flexibility in awarding and financing government contracts. It will provide billions of dollars in savings for both the private and public sector by increasing the efficiency and transparency of the government's procurement process.
Securities Exchange Commission
Rule 144A, adopted in 1990, allows issuers to sell securities in the US markets to certain without registering the offering with the SEC. Operating in this less structured environment, the market for rule 144A offerings by foreign issuers from 43 countries used the rule to sell the securities. In fact, in those three years 300 foreign issuers have used rule 144A to sell over $25 billion of securities.
Additional deregulation measures were reported in the October 1995 report on U.S. deregulation initiatives.
After a study lasting several months, the Office of Management and Budget (OMB) released in July their first report on the costs and benefits of current regulation, as required by the Treasury postal bill passed in September 1996 (Senate Appropriations Bill, sec. 645a). The report represents the first step in a comprehensive review and reassessment of regulation in the United States.
Agriculture
Omnibus Farm Bill Implementation.
Telecommunications
Several features of the landmark Telecommunications Act of 1996 were implemented in early 1997, continuing the Federal Communication Commission's (FCC) work, begun over 14 months ago, of deregulating the nation's telecommunications industry. Recent FCC efforts strive to foster increased competition in local and long distance telephone services by addressing issues related to infrastructure sharing, universal service, and access charge reform. The FCC and the Department of Justice are reviewing a number of Bell Operating Company petitions to provide in-region long distance services and will evaluate several major mergers and acquisitions as the industry continues to restructure itself following the Act. The FCC has also been actively revamping its regulation of the radio spectrum, auctioning licenses for a wide range of new services and establishing rules for a new generation of digital television.
Transportation
As part of the Reinventing Government effort, the Department of Transportation (DOT) has in recent months made over 50 substantive revisions to text in the CFR to reduce burden or duplication, or to streamline requirements. In addition, DOT has made major efforts to harmonize regulations with those of other countries, particularly European Community member countries. Both the Federal Aviation Administration and the U.S. Coast Guard have efforts underway to harmonize safety standards. These will achieve common standards that reduce unnecessary costs on airplane manufacturers without lowering the level of safety provided by existing regulations. The FAA is also working on harmonization of various regulations, ranging from rotorcraft regulation to structural load requirements, with European Joint Aviation Requirements.