The CBC lists 6 things that we can expect to be in the new border agreement between Canada and the USA that is being announced today. Of those 6 items I support without hesitation 5 of them. The first on the list, however, gives me pause.
1. Better aligned regulations: Canada and the U.S. still have different regulations and standards on a lot of products, on everything from vehicles to food to consumer products. Those rules can slow trade or make it harder to make goods compatible, so much so that Harper and Obama set up a separate agreement on regulatory co-operation. Canada expects this agreement to lower costs to businesses and consumers.
As someone who is concerned with Canadian’s freedom to trade externally and internally you would think that I would be supportive of this. After all, as the above points out, different regulations slows down trade and often acts as a hidden obstruction, yet there is another consideration to take in account. That consideration is the danger of spreading bad regulation and hampering good policy making.
I’m not overly concerned with sovereignty when it comes to this issue. Agreeing to bilaterally align regulation is not a giving up of sovereignty. It is a decision that having similar or identical regulation is more important than whatever the benefits are of the regulation before alignment over the regulation after alignment. That is most certainly the choice of a sovereign state.
My problem with it is that we don’t really know before hand how much worst or better the aligned regulation will be. In an ideal world we would examine the regulations of both the United States and Canada then decide which is better and adopt that regulation. Government does not exist in an ideal world and the path to alignment is likely to be far bumpier. For one thing defining what exactly “better” means will depend greatly on who is negotiating and which interest groups are at the table.
The results may be terrible, it could be alright, hell it is just barely possible that the results will be better regulation all around. When mistakes are made, however, it will be difficult if not impossible to fix the mistake. Two government agencies from different nations would have to work together and coordination across borders is not simple or easy. If you want an example of how well it works just take a look at the European Union.
Also, since the regulation will be the same it would be difficult to figure out exactly why the policy was failing and what the potential solutions are. Usually government learns these things by comparing themselves to similar countries. Without a US-Canada comparison, policy learning as a near scientific approach would be greatly hampered.
Think of it this way: if you want to make good regulation you have the choice of either trying different things until something works (potentially highly destructive), or you can look at what other countries have done right or wrong and learn from them. The fewer examples you have to learn from the less likely it is that you will discover the best possible policy. This is not a trivial matter. It strikes at the very heart of our regulators ability (as limited as it already is) to be good governors.
I find it unlikely that streamlining trade just this little bit will be sufficient to make up for the risk of making regulation worst. I am almost certain that it isn’t worth the disadvantage of making policy learning more difficult.