Standards & Standardization: From a Trade Perspective

Alice PhamVientiane, 17 December 2013

Few Questions

• What are standards, technical regulations (TRs), etc?

• What is the role of standards?• What is the significance of standards when we

talk about trade?• Are standards trade-restricting or trade-

facilitating?• Various levels where standards and trade

converge?

What are standards?• Standards = document, established by consensus and approved by a

recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context (ISO)

• Compliance with standards is not mandatory• There are: International standards, harmonised standards, national

standards, regional standards, private standards, de facto standards, etc• There are also Product standards, process standards, labeling

requirements, etc

Example:• A government guideline saying that all eggs weighing 62 grams or more

are entitled to be labelled “Grade A” is a standard (provided that eggs weighing less may still be sold).

• A guideline defining what products can display a “recyclable symbol” is a standard (provided that products that do not bear the symbol may still be sold).

And technical regulations?• Technical regulations = Document which lays down product

characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method. (WTO TBT Agreements)

Example:• A law stating that only refrigerators that are one meter

high can be sold in State X is a technical regulation.• A law stating that all product packaging must be recyclable

is an example of a technical regulation.

The Role of Standards• Standardization involves considerable costs, but all in

all benefits consumers, businesses, governments and society at large

• Pros: – Standards provide a common language for producers and

exporters from different countries/along the global value chain to interact with and understand each other

• Cons:– When there are no internationally agreed standards,

producers and exporters can face costs imposed by foreign standards that may require them to pay for technical experts and adjust their production processes

In short

Why talking about standards vis-à-vis trade?Trade liberalization

Opening of markets traditionally equal to tariffs elimination and curtailment of traditional non-tariff barriers such as quotas

But

Disputes over domestic regulations affecting process and production methods through which goods are manufactured are becoming more frequent.

The WTO, for example, is increasingly considering disputes that reference either its SPS or TBT Agreement

Standards are increasingly included in Regional and Bilateral trade pacts

Standards and technical regulations are moving on to the centre of the trade policy discourse

Some WTO disputes• India, Malaysia, Pakistan & Thailand vs. the US (separate

request by the Philippines): a May 1996 US ban on imports of shrimp and shrimp products harvested in a manner harmful to several endangered species of sea turtles

• The US vs. Japan: 1997 requirements imposed by Japan to test & confirm the efficacy of quarantine treatment for each variety of eight agricultural products (apples, cherries, peaches, walnuts, apricots, pears, plums and quince) – a regulation that prohibits the importation of these products from the US

• Canada vs. the European Committee: a decree issued by the French government in 1996 which banned imports of asbestos and of products containing asbestos – accused of violating both the SPS & the TBT Agreement

Many other such cases – A common thread: meeting technical

regulations & standards and verifying such

regulations/standards are met – conformity assessment

Are standards trade-facilitating or trade-restricting?

There are Protectionist Standards and Standards that Facilitate and

Promote Trade

Trade-Facilitating Standards

Standards-Trade Convergence?

Multilateralism -

Main principles of the WTO TBT Agreement

• Non-discrimination• The prevention of unnecessary obstacles to international trade

– Legitimate objectives– Necessity– Reasonableness– Changed circumstances

• Harmonization• Use of international standards• Equivalence and Mutual recognition• Transparency• Derogations from Transparency in the event of urgent measures

BTAs & RTAs: MRAs & Harmonization• APEC: moving toward MRAs in regulated product

sectors and related alignment (harmonization) of mandatory and voluntary standards with international ones.APEC Subcommittee on Standards & Conformance

• ASEAN: Economic Community Goal by 2015 – Economic Integration through Establishment of single market & production base comprising 5 core elements (free flow of goods, services, investments, capital and skilled labour) Free flow of goods looks at: Elimination of Tariffs, Elimination of Non-Tariff Barriers , Rules of Origin (ROO), Trade Facilitation, Customs Integration, ASEAN Single Window & Standards & Technical Barriers to Trade

ASEAN Policy Guidelines on Standards and Conformance (2005) & ASEAN Consultative Committee on Standards & Conformance (ACCSQ)

MRAs vs. Harmonization

APEC ASEAN

Companies’ Active Participation in the Standardization Process at All Levels

Thank you for your attention!

Questions, Comments & Enquiries: ap@cuts.org