The case for unilateral recognition

Bilateral, plurilateral, and multilateral are words that New Zealand's civil service love. There is nothing that can't be improved by doing it in concert with others. 

Sometimes there's good reason for just doing stuff. 

New Zealand made the right decision when it unilaterally slashed all of its tariffs. It also progressed all the other trade agreements that helped make trade easier. But it didn't wait for those lengthy processes. Just cutting tariffs earlier was just fine. 

A couple of weeks ago in Newsroom, I made the case for doing the same thing with standards recognition. We already do it with automobiles. We don't need bilateral or any other agreements between New Zealand and other places to make sure that the cars we import are safe. Instead, there's a long list of standards that New Zealand considers to be good enough, whether the standard-setting countries like it or not. Pretty unlikely that they'd object though. 

New Zealand is part of FSANZ - a bilateral standards-setting body for food-labelling. NZ and the Australian States jointly set the product labelling rules. But it also means that imported foods that aren't labelled for the NZ-Oz market have to carry the stupid little stickers that add cost but no real value. 

Like it did with cars, New Zealand could unilaterally say that products labelled for the American, Canadian, Singaporean, UK, Irish, or EU markets (so long as the labelling includes English) is good enough for here too. We don't need bilateral, multilateral, plurilateral, or any other kind of -lateral agreements to do it. We could just do it. 

Sure, it would be even better if those countries all said that FSANZ labelling is good enough for their markets. But getting that agreement seems impossible for Canada, and probably hard for the rest. And much of the market-access benefit can be achieved through unilateral recognition. If NZ unilaterally said that products labelled to Canadian standards were good enough for NZ, then a NZ producer targeting the Canadian market could just label everything to the Canadian standard and sell that version here and there. 

First best would be everyone just agreeing that everyone has been stupidly precious about all of this, and that the labelling for any of these markets is good enough. Then nobody would have to set country-specific labelling runs. And if it were likely that NZ could have agreements with piles of countries to accept each others' labelling, then an NZ producer wouldn't have to decide which of those markets it was targeting. NZ labelling would be good enough for all of them. 

But bilingual labelling in Canada is best viewed as a religious commitment. 

MinReg this week put up an excellent report on the costs of this kind of labelling nonsense. It makes the case for, among other things, mutual recognition of international labelling standards with trusted jurisdictions. 

I don't disagree, conditional on those agreements being feasible to achieve in finite time and not precluding NZ acceptance of other country standards as well. 

But unilateral recognition should also be on the table. Having UK-labelled stuff on the shelves here would be just fine. And it'd make it easier for a UK-based supermarket to open stores here, if it wanted to.