Magazine article Occupational Hazards

Standards Go Abroad

Magazine article Occupational Hazards

Standards Go Abroad

Article excerpt

"Whoever controls the standard, controls the market." This modern Chinese proverb underscores why standards are a central part of World Trade Organization (WTO) rules and regulations, and why an increasing number of businesses are paying attention. As the Chinese have come to know, standards facilitate the growth of markets.

Product standards have been aspects of many trade agreements, but China's rise as a market for U.S. exports has forced renewed focus on the use of standards as technical barriers to trade. The particular issue of China's adoption of foreign standards or use of "home-grown" standards is uniting U.S. manufacturers across a vast number of industries and segments.

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Let's look at the role of standards in the WTO, China's efforts on standards development, the European Union's efforts on standards promotion, and what the U.S. government can do to help U.S. employers expand overseas.

World Trade Organization

The WTO, the international trading forum onto which the United States and 147 other nations have signed, includes a Technical Barriers to Trade (TBT) agreement stating that countries should not use technical standards as trade barriers; should adopt international standards whenever possible or practicable; and should work on harmonizing standards through international standards organizations. However, the TBT section allows countries to exercise their authority in the areas of health, safety and national security.

The Problem

Even with the WTO, countries use standards as trade barriers by setting standards unique to their domestic market. This increases the costs of exporting to the country because exporters must modify their products, including labeling and markings, to meet the special standards requirements of the target country. Unique standards are bureaucratic disincentives for exporters, who must learn about, understand and work through often complex specifications.

China

In an effort to promote an independent economy based on Chinese technologies, China plans to (1) develop mandatory domestic technical standards based on Chinese technology and intellectual property, rather than adopt existing industry or international technical standards, and (2) require license fees for non-Chinese technology.

Standards experts say China is likely to continue to try to promulgate unique, exclusionary standards for its domestic market, and hope that market forces and the size of its domestic market will cause its standards to be widely adopted. Experts also suspect the Chinese government will likely seek to increase its presence within international standards bodies, such as ISO, to position itself in a role that will allow it to set its standards as world standards.

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In Europe and Asia, the system of standards development is different from that in the United States. Although companies, associations and governments have a role in standards development in the United States, in Europe and Asia the governments are far more involved and provide government funding, resources and support to manage their domestic standards development processes, publish the standards, and support the country representation at international standards meetings. …

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