Outside the European Union, probably the best-known broad mutual recognition scheme is the Trans-Tasman Mutual Recognition Agreement (TTMRA). New Zealand and Australia have a history of extensive regulatory cooperation, reflecting their deep cultural, economic, historical and political ties.
In 1983, the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) was signed which led to free trade in goods by 1990. Since then, New Zealand and Australia have signed protocols for liberalization of services and investment, and have moved towards deeper regulatory cooperation through processes of coordination, mutual recognition and harmonization (https://www.mfat.govt.nz/assets/FTAs-agreements-in-force/Australia/anzcer-cep-booklet.pdf)
The TTMRA was signed in 1996 between the Government of New Zealand and the Commonwealth, State and Territory Governments within Australia. The TTMRA advanced the strategic objective held by the New Zealand and Australian Governments of creating a “single trans-Tasman market for the sale of goods and the registration of occupations” (https://www.mfat.govt.nz/assets/FTAs-agreements-in-force/Australia/anzcer-cep-booklet.pdf).
While New Zealand and the various Australian jurisdictions have many similarities, the TTMRA reflects the fact that it is easier to take a mutual recognition approach than to develop uniform or harmonized regulations. Examples of these approaches include food standards which are uniform across the two countries and are administered by Food Standards Australia New Zealand.
Under the TTMRA, goods that can be lawfully sold in one jurisdiction can also be sold in the others without having to satisfy additional requirements. Similarly, people registered to practice an occupation in one jurisdiction may practice the equivalent occupation in another jurisdiction without further testing or examination.
The TTMRA advances trade and investment liberalization by lowering compliance costs for business and reducing technical barriers to trade. Businesses only have to manufacture to one standard for both the New Zealand and Australian markets, while employers and employees benefit from an open trans-Tasman employment market.
About 85 percent of goods traded between New Zealand and Australia are covered, with the remainder subject to (https://catalogue.nla.gov.au/Record/4560452) :
- Permanent exemptions: these apply to goods with respect to which jurisdictions want to maintain different standards and include therapeutic goods, risk-categorised foods, firearms and road vehicles;
- Temporary exemptions: these allow unilateral product bans for up to 12 months for health, safety or environmental reasons; or
- Special exemptions: these apply while jurisdictions work to resolve differences through harmonization, mutual recognition or a permanent exemption.
There are also exceptions for laws that fall outside the TTMRA’s scope (e.g. those relating to transportation or storage of goods), and exclusions for laws relating to the sovereign rights of nation states (e.g. customs controls, intellectual property and taxation).
The TTMRA covers occupations that have a requirement for registration, certification, licensing, approval, admission or other type of authorisation (collectively referred to as ‘registration’). A person registered to practice an occupation in one jurisdiction is entitled to practice an ‘equivalent’ occupation in another jurisdiction, after notifying the local occupation-registration authority. Occupations are ‘equivalent’ if the activities authorised to be carried out are substantially the same.
A broad range of occupations is covered, from those requiring extensive education (e.g. legal, dental) to those requiring less or no formal education (e.g. security, taxis). Only the medical profession is exempted (although in practice, other arrangements provide the same outcome as mutual recognition). There are also exceptions for certain laws relating to the manner of carrying on an occupation.
Specifics on Legal Services
Within the TTMRA, “equivalent occupation” (the reference phrase for occupations included) is defined in relevant domestic legislation and covers ‘activities authorised to be carried out under each registration [being] substantially the same’. Under the auspices of national legislation, the legal educational bodies of each Australian State party to the agreement and New Zealand, have published requirements for admission as lawyers. The New Zealand version of this is the Trans-Tasman Mutual Recognition Admission Regulations 2008 made under the Trans-Tasman Mutual Recognition Act 1997 (found here: http://www.nzcle.org.nz/Docs/Trans-Tasman_Mutual_Recognition.pdf).
To apply for registration, individuals must forward written details of their registration in their home jurisdiction to the registration board in the second jurisdiction and sign a consent form enabling the registration board to undertake reasonable investigations relating to their application.
The TTMRA approach
During negotiation of the TTMRA and its predecessor agreement, the Mutual Recognition Agreement (between the Australian Commonwealth, states and territories), the mutual recognition model adopted by the European Union was considered but rejected. As Wilkins explains (Australian Government Productivity Commission, 1995):
“…[We] were familiar with the application of the [mutual recognition] concept in the … European Union … that … involved an extensive bureaucratic administration and its effectiveness was dependent on the issuing of directives to ensure that minimum essential standards would apply. Those directives were subject to a variety of interpretations and required close monitoring and enforcement. We wanted a more straightforward, low maintenance approach …”
To this end, the TTMRA reflects a ‘light-handed’, decentralized model. Administration, monitoring and compliance are largely managed by regulators in each jurisdiction. This model is widely regarded as a success. A 2015 review of the TTMRA by the Australian Productivity Commission (the TTMRA is subject to joint review every five years) found that it is working well, although the benefits risk being eroded due to regulators not always implementing mutual recognition as required, weak oversight, and an increase in goods exemptions. Regarding occupations, some instances were reported of occupation registration bodies not implementing mutual recognition as intended because of a fear of “shopping and hopping” – the practice of registering in a jurisdiction with less stringent requirements in order to obtain registration in a more stringent jurisdiction. Overall, however, the Commission recommended only minor improvements to address these concerns.
Tracey Epps has over 16 years’ experience as an academic, advisor and negotiator; including seven years as a senior advisor in the Ministry of Foreign Affairs (MFAT) Trade Law Unit. Since early 2011, she was the Lead Legal Counsel for New Zealand’s negotiating team in the Trans-Pacific Partnership (TPP) negotiations. In this role, she provided advice on all aspects of the Agreement and also acted as Chair of the Legal and Institutional Working Group. In addition to her work on TPP, Tracey worked on all aspects of trade and investment law, including trade in goods and services, international disputes (the Australian apples dispute and various World Trade Organisation disputes in which New Zealand has been a third party) and most recently, the legal implications of Brexit for New Zealand’s exporters (full biography).