Taking Foreign Interests into Account: Rulemaking in the U.S. and EU

Domestic regulations increasingly have effects on foreign actors. International law offers no general rules about such regulatory effects. In practice, however, the U.S. and EU rulemaking processes are increasingly open to foreigners. In both jurisdictions regulators are obliged under domestic law to highlight certain proposed rules that have international impacts, and foreigners may in turn participate in notice and comment procedures. In addition, certain regulatory impact assessments take impacts on foreigners into account. These practices pose a puzzle: why would states willingly constrain their policy choices? Why do they seek to learn the preferences of actors outside their polity? I argue that the main rationale behind these practices is their enlightened self-interest in improving market-openness. These principles of openness towards foreigners are now embedded in OECD best practices, which suggests that they might find their way into the domestic legal systems of other countries.