As Ambassador Gray pointed out in his initial comments, differences in regulatory regimes represent the biggest source of barriers to transatlantic trade and investment — other than in certain sectors such as agriculture, tariffs are no longer the issue, and regulatory cooperation between the United States and EU is essential to any further opening of the transatlantic economy.

Both speakers identified progress being made, but drew attention to the significant obstacles which meant that regulatory cooperation was not a ‘magic bullet' for solving all transatlantic concerns. Ambassadors Bruton and Gray pointed to the wide range of sectors, from financial services to cosmetics, in which cooperation is progressing, with Bruton drawing attention to the number of U.S. regulatory agencies that were now involved in the bilateral dialogue. Ambassador Gray also pointed to intensive transatlantic cooperation on some of the more procedural aspects of regulation: he felt that a good working relationship had been established focusing on the analysis of regulation — including on the development of effective cost-benefit analysis — without which, he argued, it would not be possible to make substantive progress in specific sectors. In that regard, he welcomed the European Commission's recent creation of a unit to strengthen regulatory oversight, potentially playing a similar role to that of the Office of Management and Budget in the United States.

But challenges remain, illustrating both the need for continued cooperation and also some limits on the potential for progress. Ambassador Gray noted a difference in administrative law practices between the EU and United States, commenting that there was no process of judicial review in Europe to correspond with that in the U.S. framework — Ambassador Bruton argued that there were now a number of examples where the European Court of Justice had exercised judicial oversight, but agreed that the emergence of a European Administrative Court (along the lines of the United States Court of Appeals for the District of Columbia Circuit) seemed unlikely.

Both speakers, however, identified differences in the distribution of regulatory authority as a key challenge. Ambassador Bruton pointed out that considerable power and authority was held by the EU's Member States, who influenced the development of regulation through the process of comitology — Ambassador Gray, meanwhile, noted that while dispersed power was a lesser issue in the U.S., it was nonetheless an occasional challenge in some sectors where the states, rather than the federal government, continued to hold regulatory power.

Both also noted that even with active cooperation, different approaches to regulation would sometimes lead to divergence, rather than convergence, in regulatory standards — a point that Ambassador Gray felt was well-illustrated by the "REACH" legislation on chemicals currently being considered within the EU. Ambassador Bruton suggested that differences arising, whether because of technical or philosophical difference in approach, often became entrenched over time, creating an economic roadblock to convergence as industry tailored its business models to dealing with the specific regulation it faced. Changing regulation can incur significant costs. 

Also mentioned was the threat of protectionism over investment both in the EU (the desire among some politicians to create "national champions" in certain sectors) and in the United States (in particular, restrictions on foreign investment in airlines, and the potential for security concerns to mask protectionism through CFIUS legislation).

This being said, both Ambassadors reiterated the commitment of both the EU and United States to move forward, citing the November 9th economic ministerial meeting between the transatlantic partners. The current dialogue on financial markets was held up as a good example of strong cooperation (Ambassador Gray described it as "the gold standard" for regulatory cooperation), with work being taken forward across a number of areas, including on re-insurance collateral and International Financial Reporting Standards. More work was needed, but the dialogue was proceeding along the right path.

Ambassador Gray also remarked that the partners' capacity to cooperate had developed considerably since it had begun over 10 years ago, with regulators devoting greater resources and able to draw upon greater funding than they had been able to in the earlier days.

In response to questions on the political impetus for developing cooperation further, the Ambassadors argued that two political arguments needed to be made. First, they argued, policy-makers needed to better understand the importance of the transatlantic economic relationship - how it dominated global trade and investment, resulting in an investment relationship so deep that European and U.S. companies both employed vast numbers of people in the each others' economy. Second, remarked Ambassador Bruton, the case for closer regulatory cooperation had to be made more accessible to politicians. That, he argued, would be made easier by stories which could illustrate the real-world need for cooperation - mentioning, by way of example, that divergence in automobile safety standards between the United States and the EU required manufacturers to crash a car twice in order to satisfy the regulators in both. Progress would also be made easier with firm evidence of deliverables which could be presented to policymakers.

In practical terms, Ambassador Gray pointed to a clear need for Congress to be more closely involved in the dialogue. Firstly, it is important to understand the difference in roles played by the European Parliament and Congress — whereas the European Parliament is ‘sandwiched' between the twin roles of the European Commission as sole legislative initiator (at an EU-level) and regulator, Congress enjoys more direct power through its oversight responsibilities. Secondly, he argued, Congress is not, at present, sufficiently engaged in ongoing cooperation — a factor which might ultimately make it impossible to make significant progress. Their participation, on the other hand, could be the way past many seemingly insuperable roadblocks.