This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ROME 005568 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PREL ETRD ECON PREL ETRD IT EUN ITEFIN EUN
SUBJECT: BETTER REGULATION: OMB ADMINISTRATOR GRAHAM 
PROMPTS LIVELY DEBATE 
 
REF: SECSTATE 178272 
 
                       UNCLASSIFIED 
 
PAGE 02        ROME  05568  01 OF 02  151704Z 
 
¶1. SUMMARY. REACTION TO OMB ADMINISTRATOR JOHN GRAHAM'S 
MESSAGE ON REGULATORY REFORM IN THE U.S. AND EUROPE RANGED 
FROM A LIVELY GIVE-AND-TAKE AMONG SENIOR GOI OFFICIALS, 
INCLUDING A NOTED EU PARLIAMENTARIAN, TO POLITE CURIOSITY 
AMONG BUSINESS LEADERS.  WHILE BOTH AUDIENCES ACKNOWLEDGED 
THE UTILITY OF DOING STUDIES ON THE IMPACT OF PROPOSED 
REGULATIONS, THERE WAS NO CONSENSUS WHETHER THE EUROPEAN 
COMMISSION SHOULD MAKE SUCH STUDIES MANDATORY BEFORE ISSUING 
REGULATIONS.  GOI OFFICIALS REPRESENT A POTENTIAL BASE OF 
SUPPORT FOR THE USG AS WE MAKE OUR CASE BEFORE THE COMMISSION 
ON THE EU'S PLANNED REGULATORY REFORM.  GETTING ITALIAN 
BUSINESSES ENGAGED IN THE ISSUE WILL BE A MORE DIFFICULT 
TASK.  END SUMMARY. 
 
¶2. OMB ADMINISTRATOR JOHN GRAHAM CAME TO ROME ON NOVEMBER 13 
AS PART OF A PUBLIC-AFFAIRS SPONSORED PROGRAM, WHICH INCLUDED 
STOPS IN BERLIN, COPENHAGEN, BRUSSELS AND PARIS.  THE EMBASSY 
HOSTED A ROUNDTABLE WITH NOTABLE ITALIAN GOVERNMENT 
OFFICIALS, INCLUDING: GIUSEPPE GARGANI, EU PARLIAMENTARIAN 
AND CHAIR OF THE EU PARLIAMENTARY COMMITTEE ON LEGAL AFFAIRS 
AND THE INTERNAL MARKET; ALESSANDRO PALANZA, VICE SECRETARY 
GENERAL, CHAMBER OF DEPUTIES; MADDALENA FILIPPI, JUDICIAL 
ADVISOR TO THE MINISTER OF PUBLIC ADMINISTRATION AND A MEMBER 
OF THE OECD WORKING GROUP ON REGULATORY REFORM; STEFANO 
RODOTA, PRESIDENT, ITALIAN DATA PRIVACY COMMISSION AND CHAIR 
OF THE EU WORKING GROUP ON DATA PRIVACY; AND CLAUDIO 
TUCCIARELLI, DIRECTOR GENERAL, REFORMS MINISTRY AND ADVISOR 
TO THE PRIME MINISTER OF REGULATORY REFORM.  AN AFTERNOON 
SESSION WAS HOSTED BY CONFINDUSTRIA, ITALY'S LARGEST 
EMPLOYERS ASSOCIATION, WITH INVITED MEMBERS OF THE ITALIAN 
                       UNCLASSIFIED 
 
PAGE 03        ROME  05568  01 OF 02  151704Z 
BUSINESS COMMUNITY. 
 
¶3. DURING THE EMBASSY'S ROUNDTABLE, QUESTIONS FOR GRAHAM 
FOCUSED ON SEVERAL KEY ASPECTS: WHAT TYPE OF COST-BENEFIT 
ANALYSIS IS DONE?  WHAT IS THE BALANCE OF EXPERTISE IN OMB 
AMONG ECONOMISTS, TECHNICAL SPECIALISTS, SOCIAL POLICY 
EXPERTS?  WHAT IS THE METHODOLOGY USED? WHAT IS OMB'S 
(GRAHAM'S OFFICE) RELATIONSHIP WITH STATE AND LOCAL 
LEGISLATORS, AUTHORITIES AND REGULATORS? WHAT GUIDELINES ARE 
USED TO DETERMINE WHEN A REGULATION IS NEEDED? WHAT IS OMB'S 
RELATIONSHIP WITH INDEPENDENT REGULATORY AGENCIES, SUCH AS 
THE SEC AND THE FEDERAL RESERVE BANK? WHAT ARE THE PRIVACY 
CONSIDERATIONS?  WHAT REVIEW, IF ANY, DOES OMB CONDUCT OF 
LEGISLATION PASSED BY CONGRESS THAT IN EFFECT, ARE REGULATORY 
IN NATURE?  GRAHAM HIGHLIGHTED MANY ASPECTS OF U.S. POLICIES 
AND PROCEDURES: COST BENEFIT ANALYSES INCLUDE QUANTITATIVE 
ECONOMIC MEASUREMENTS AS WELL AS CONSIDERATION OF FAIRNESS 
AND EQUITY ISSUES; HIS 50-PERSON STAFF REPRESENTS ALL THE 
SOCIAL SCIENCES; GUIDELINES/METHODOLOGY ARE ON OMB'S WEBPAGE. 
HE NOTED THAT OMB HAS NO REGULATORY OVERSIGHT OVER THE SEC 
AND THE FED, AND CAN ONLY PROVIDE ADVISORY OPINIONS ON DRAFT 
LEGISLATION. 
 
¶4. OMB'S POLICY TO CONDUCT REGULATORY IMPACT STUDIES OF THE 
MOST IMPORTANT DRAFT REGULATIONS GENERATED THE GREATEST 
INTEREST. PALANZA OF THE CHAMBER OF DEPUTIES AND JUDICIAL 
ADVISOR FILIPPI SEEMED TO ACKNOWLEDGED THE DESIRABILITY, IF 
NOT NECESSITY, OF DOING SUCH STUDIES BEFORE REGULATIONS WERE 
ISSUED.  PALANZA ACKNOWLEDGED THE UTILITY OF THE OECD'S 
WORKING GROUP ON REGULATIONS AND REGULATORY REFORM, AND 
QUESTIONED WHETHER THE EU COULD ADOPT SIMILAR PROCESSES. 
                       UNCLASSIFIED 
 
PAGE 04        ROME  05568  01 OF 02  151704Z 
FILIPPI ALSO EXPRESSED INTEREST IN EX-POST-FACTO REVIEW OF 
REGULATIONS ONCE IMPLEMENTED. 
 
¶5.  THE EU'S PLAN FOR REGULATORY REFORM ALSO PROMPTED A 
GIVE-AND-TAKE DISCUSSION. GRAHAM RAISED THE QUESTIONS ABOUT 
WHOM IN THE COMMISSION WILL BE RESPONSIBLE FOR QUALITY 
CONTROL AND PEER REVIEW.  IN RESPONSE, GARGANI NOTED THAT 
EUROPE HAS NO STANDARD FOR REGULATORY IMPACT STUDIES; THERE'S 
NO UNIVERSAL TRADITION OF DOING SO.  HE EXPRESSED THAT AMONG 
HIS COMMITTEE MEMBERS, THERE'S SOME SKEPTICISM THAT SUCH 
STUDIES SHOULD BE DONE; HE SEEMED TO HEDGE HIS PERSONAL 
OPINION.  HE QUESTIONED HOW THE U.S. DEFINES EFFICIENCY AND 
FAIRNESS IN ITS COST-BENEFIT ANALYSES, WHICH GRAHAM HAD 
UNDERSCORED ARE PART OF THE U.S. REVIEW ALONG WITH A PURE 
QUANTITATIVE IMPACT ANALYSIS.  GARGANI ALSO NOTED, SUBTLETY, 
THAT COSTS AND EFFICIENCY ARE NOT ALWAYS THE DECIDING FACTORS 
BEHIND REGULATIONS, PARTICULARLY IN CASES OF LEGISLATION 
PASSED BY PARLIAMENTS THAT IN EFFECT, CREATE REGULATIONS. 
ACKNOWLEDGING THIS IS SOMETIMES THE CASE IN THE UNITED 
STATES, GRAHAM ARGUED, HOWEVER, THIS IS NOT A REASON TO 
IGNORE REGULATORY IMPACT ANALYSES. 
 
¶6. DESPITE THE DIFFERENCES IN OPINIONS AMONG THE ROUNDTABLE 
PARTICIPANTS, ALL WERE EAGER TO READ THE OFFICIAL U.S. 
COMMENTS ON THE COMMISSION'S REGULATORY REFORM ACTION PLAN. 
THEY EXPRESSED APPRECIATION OF ACTIVE U.S. ENGAGEMENT IN THIS 
ISSUE. 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTO3787 
 
PAGE 01        ROME  05568  02 OF 02  151704Z 
ACTION EUR-00 
 
INFO  LOG-00   NP-00    AGRE-00  AID-00   CEA-01   CIAE-00  COME-00 
      CTME-00  DODE-00  ITCE-00  DOTE-00  SRPP-00  DS-00    EAP-00 
      EB-00    EXME-00  E-00     FAAE-00  UTED-00  VC-00    FRB-00 
      H-01     TEDE-00  INR-00   ITC-01   L-00     VCE-00   AC-01 
      NSAE-00  NSCE-00  OES-00   OMB-01   DHS-00   OPIC-01  PA-00 
      PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00    SSO-00 
      SS-00    STR-00   TEST-00  TRSE-00  T-00     USIE-00  FMP-00 
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00 
      SAS-00     /008W 
                  ------------------09387A  151725Z /38 
R 151548Z NOV 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 6934 
INFO EU MEMBER STATES COLLECTIVE 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
USEU BRUSSELS 2957 
 
UNCLAS SECTION 02 OF 02 ROME 005568 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PREL ETRD ECON PREL ETRD IT EUN ITEFIN EUN
SUBJECT: BETTER REGULATION: OMB ADMINISTRATOR GRAHAM 
PROMPTS LIVELY DEBATE 
 
                       UNCLASSIFIED 
 
PAGE 02        ROME  05568  02 OF 02  151704Z 
¶7. IN CONTRAST TO THE LIVELY DEBATE OF THE ROUNDTABLE, THE 
SESSION HOSTED BY CONFINDUSTRIA DEMONSTRATED ITALIAN 
BUSINESSES' MINIMAL ENGAGEMENT IN THE ISSUE OF REGULATORY 
REFORM. WITH THE EXCEPTION OF THE REPRESENTATIVE FROM THE 
ITALIAN CHEMICAL MANUFACTURERS ASSOCIATION, THE PARTICIPANTS 
LISTENED TO GRAHAM WITH POLITE ATTENTION.  IN CONTRAST, THE 
CHEMICAL MANUFACTURING REPRESENTATIVE SPOKE PASSIONATELY AND 
INTELLIGENTLY ABOUT THE RISK OF DISENGAGEMENT, USING THE 
COMMISSION'S WHITE PAPER ON CHEMICAL PRODUCTS AS AN EXAMPLE. 
GRAHAM ALSO NOTED THE FLAWS IN THIS WHITE PAPER, AND 
QUESTIONED HOW THE COMMISSION COULD IMPOSE THE SAME TOXICITY 
TESTS FOR CHEMICALS THAT COULD PRESENT WIDESPREAD EXPOSURE 
RISK AND THOSE WITH MINIMAL EXPOSURE RISKS. THE CHEMICAL 
MANUFACTURERS' REPRESENTATIVE UNDERSCORED THE DESIRABILITY OF 
HAVING INPUT FROM THIRD PARTIES, INCLUDING THE UNITED STATES, 
ON REGULATORY REFORM ISSUES. IN RESPONSE TO GRAHAM'S INQUIRY 
ABOUT HOW ITALIAN BUSINESSES LOBBY ON ISSUES IN BRUSSELS, 
PANELISTS ACKNOWLEDGE THE DIFFICULTY IN BEING EFFECTIVE AND 
IN BEING "LISTENED TO", THEY REMARKED. 
 
¶8. COMMENT: POST BELIEVES ADMINISTRATOR GRAHAM'S VISIT COULD 
HELP GENERATE A MORE IN-DEPTH EXCHANGE WITH GOI OFFICIALS, 
ESPECIALLY THOSE WHO HAVE HANDS-ON INVOLVEMENT WITH 
REGULATORY REFORM, ON THE COMMISSION'S PLANS. WE APPRECIATE 
WASHINGTON AND USEU'S SUPPORT FOR THIS VISIT. 
SKODON 
 
                       UNCLASSIFIED 
 
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 2002ROME05568 - Classification: UNCLASSIFIED