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Harmonized International Standards & Conformance Facilitate Global Trade

Occasionally when talking with U.S. business and industry leaders, I uncover a fallacy in thinking about international standardization: some believe that standards and conformance generally create barriers to trade. What they need to understand is that international standards are actually powerful business tools that can be used to facilitate trade and access new markets.

Harmonized standards can help companies boost efficiency, increase productivity, and take a greater share of the increasingly global market – at the core of every organization’s opportunities for growth. But you have to have the right knowledge – or, better yet, get actively engaged in the standards development process – to reap the greatest rewards.

When we talk about “harmonized international standards,” what we are really talking about are globally relevant standards developed in adherence to the principles of the World Trade Organization (WTO) Technical Barriers to Trade Agreement, which include openness, balance, consensus, and transparency.

The WTO puts substantial pressure on regulators in all WTO member states to use international standards as a basis for national technical regulations and to align requirements across borders wherever appropriate. And countries around the world are increasingly doing so, resulting in increased market opportunities for those companies whose products, processes, personnel, and services meet these requirements.

According to Pascal Lamy, WTO director general, 2005-2013, “…if regulatory agencies don’t trust the quality or safety of each other’s products, they may not allow trade to take place. International standardizing bodies…have an important role in building bridges.

In fact, it is the very reason that two key WTO Agreements explicitly urge regulators to base their measures on relevant international standards to avoid unnecessary barriers to trade. These Agreements go as far as to say that measures that are based on relevant international standards are assumed to be in compliance with WTO rules.”

Assuming these standards reflect your company’s needs and priorities, if you are aligned with the requirements you gain the benefits of reduced transaction costs and time to market. Which takes us to another, even more strategic aspect of this discussion: The importance of active U.S. industry participation in the development of globally relevant standards.

Who’s involved in international standardization?

To give you a bit of background, standards are written by hundreds of standards developing organizations (SDOs), consortia, industry groups, and government entities operating all over the world. And while the WTO principles set out the required characteristics of the standards developer’s processes in order to be considered globally relevant, they do not otherwise take preference for any particular developer over another.

Most people have heard of the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) –with voting member bodies from 117 and 59 countries, respectively – but it’s important to note that there are also many other SDOs both here in the U.S. and elsewhere that develop globally relevant standards.

The American National Standards Institute (ANSI) is the U.S. member body to ISO, and via our U.S. National Committee, to the IEC. We also participate actively as a U.S. representative to regional standards organizations and hold regular meetings and dialogue with national standards bodies, standards developers, trade officials, and regulators from around the globe.

One of ANSI’s key roles as U.S. member body is to accredit or approve U.S. Technical Advisory Groups (TAGs) to develop and transmit U.S. positions on ISO or IEC technical activities. These TAGs comprise volunteer experts willing to share their time and technical knowledge to ensure the U.S. is strongly and favorably represented at the tables where international standards are written and adopted.

Based on the engagement of these experts, for decades the U.S. has been one of the most active countries in international standardization. We participate in 90% of IEC and 80% of ISO committees and subcommittees. But there is a dangerous trend on the horizon: Increasingly, when a U.S. standardization expert retires or a program loses funding, we are unable to find a committed replacement and end up relinquishing the U.S. leadership position. Many other countries in Europe and other parts of the world are in the same boat, due to economic constraints.

At the same time, some nations such as China, Korea, India, and Brazil are becoming increasingly active and engaged. China, in particular, recognizes the value of active participation in the development of globally relevant standards, and they are putting their money and manpower where their mouth is. They are more than happy to take over vacated committee leadership positions, and their overall participation, influence, and market share are huge and growing.

It is critical that we, too, prioritize international standardization, and maintain strong, active participation by U.S. experts representing the technical positions that will result in beneficial positioning for U.S. products in the global market.

What are the direct benefits of participation?

Beyond strengthening overall U.S. competitiveness, companies that participate in international standards development can exert influence on the technical content that shapes international requirements.

  • They can align their products with changing markets, and facilitate acceptance across borders.
  • They can gain insiders’ knowledge and early access to information on emerging issues.
  • They can reduce redundancy, minimize errors, and shorten time to market.
  • They can decrease the economic risk of R&D activities.
  • And they can lower their costs by relying on previously standardized technologies.

Given the importance of international standards, you should make sure that the standards and compliance programs being developed around the world will affect your business positively. And the only way to do that is for your company to be actively engaged.

How can you get involved?

ANSI accredits, approves, or administers more than 200 U.S. TAGs to ISO and more than 150 to IEC, covering a broad array of technologies from IT systems to agricultural machinery to electronics, household appliances, and much, much more. Whatever your area of expertise, there is likely a U.S. TAG working on relevant standardization issues – and we are always seeking new participants to contribute their expertise and help strengthen U.S. representation.

ANSI also offers a number of resources to assist in trade facilitation and standardization harmonization internationally. The ANSI Manufacturer Member Roundtable in China is a forum forANSI full member companies to discuss challenges and strategies and provide perspectives on issues that affect their ability to do business in China.

And to help foster trade between the U.S. and a number of key, growing markets, the Institute’sStandardsPortal  provides freely available information on standards, conformance, market access, and trade-related issues for companies doing business in the U.S. and with China, India, and Korea.

We also invite you to get involved in one of ANSI’s collaboration activities, which work on timely standards and conformance topics of national importance such as electric vehicles, nanotechnologies, smart cities, energy efficiency, and homeland security.

Over the course of my career, I’ve seen that many people don’t understand what standards are and how they are developed.  And that’s a real shame, because standardization is an incredibly powerful tool.  But to gain the greatest advantage, you have to get informed, and – better yet – get involved.

I invite you to visit the website to read real case studies and watch CEO video testimonials documenting concrete benefits that standardization has provided to large and small U.S. companies. And if your organization is not already involved in standards development work, I urge you to reach out to ANSI to learn more.

To paraphrase American management theorist Peter Drucker, “the best way to predict the future is to have a hand in shaping it.”

Article written by Joe Bhatia, President & CEO, American National Standards Institute.

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