Volume 4, Number 28, Page 4

Regional

Standards: A Trade Barrier?

PRODUCT STANDARDS, CONFORMITY ASSESSMENT AND SAFETY in the global marketplace

by Timothy Baker, Esq.

part 2 of 2

Recommendations

The OECD study recommends that measures be taken to adapt the standardization and conformity assessment systems to the needs of a fast-paced global marketplace and change the way the systems are applied in the context of product safety. The changes would lessen the opportunity for product standards and conformity assessment requirements to be utilized as protectionist devices, ensuring that the buyer enjoys the benefits of open and competitive markets and is not exposed to unreasonable risks of injury.

The study recommends that developers of standardization and conformity assessment systems recognize the need to adapt to advances in technology, manufacturing methods and product safety management, and take into account the extent and dynamics of open and free markets.

The OECD study urges that alternative and innovative ways to achieving product safety be considered. As a start, the study recommends that the standards drafting process be improved in terms of speed, efficiency and relevance to market conditions and consumer concerns. It also recommends that government product safety standards and requirements be flexible and broad-based.

Government standards should be prescribed in performance, rather than design, requirements because this will allow manufacturers maximum flexibility in product design and development, thereby permitting greater product innovation. Performance product safety standards are less likely to become technical barriers to trade and be utilized as anti-competitive devices.

Likewise, the study recommends increased use of international product standards based on performance requirements. However, if international standards cannot be developed, the OECD urges that equivalent product standards be accepted by government safety agencies.

Opening up markets to equivalent product standards would be an important step in eliminating their use as protectionist devices and can be done without increasing safety risks to the buyer. In the United States, safety officials are moving away from the practice of developing formal government safety standards and are increasingly relying on recall mechanisms to protect the consumer from unsafe products.

Outside the United States, safety officials have similar powers. The OECD survey found that member governments already have laws that make it illegal for manufacturers to sell unsafe products. Moreover, according to the survey, safety officials have product recall powers giving them the capability to remove any dangerous product that makes its way onto the market. The study notes, however, that in order for this regulatory authority to be effective, the market must be monitored to ensure that products conform to essential safety standards.

While the study recommends the establishment of broad-based safety requirements in mandatory government product standards, it urges the use of voluntary product standards developed in the private sector to determine how those safety requirements are satisfied. The OECD warns, however, that in moving toward a deregulatory approach and introducing flexibility in product safety regulation, governments should not allow the establishment of de facto regulation by the private sector. If governments are not careful, voluntary product standards can become technical barriers to trade and serve anti-competitive purposes. As a consequence, the study urges greater transparency at all levels in standards development.

The OECD study strongly urges that efforts be made to eliminate the causes of repeated product testing and multiple certification. The process should begin by subjecting the burdens of conformity assessment requirements to rigorous cost-benefit analysis. To ease regulatory burdens, the study recommends greater use of manufacturers’ self-declaration of conformity when consistent with the safety risks associated with the product.

When it is necessary to ensure uniformly high levels of product safety because of the risks to the user, third-party testing is often required. In such cases, mutual recognition of conformity assessment procedures and results may be the most efficient method of reducing costs and increasing consumer choice while ensuring uniformly high standards of product safety. Consequently, the study recommends that efforts be made to ensure that the results of such testing be mutually recognized. The study points out, however, that for mutual recognition to succeed, testing and certifying organizations must be monitored for competence.

The study also recommends examining the potential for trade barriers to result from the certifying organization practice of granting voluntary marks. It suggests that authorities may wish to examine the system of voluntary marks with respect to issues of restraint of trade and competition, especially when certifying organizations do not accept the results of equivalent foreign testing.

In its study and recommendations, the OECD confronts not only procedural issues but also fundamental issues that involve the functioning of product standards and conformity assessment requirements in the global marketplace. If implemented, the recommendations should render the standards and requirements less attractive devices for protecting domestic industries against tough global competition and less important to safety officials in their efforts to protect the consumer against safety risks. Thus, the recommendations will allow product standardization and conformity assessment systems to focus more directly on the functions they were originally intended to perform. By reducing their use for purposes other than technical, product standardization and conformity assessment systems can return to their former obscurity.

Timothy Baker, Esq., formerly with the OECD, is President of the National Law and Language Institute. The Institute conducts law, legal English and Spanish language programs in cooperation with the National Law Center for Inter-American Free Trade.